“I’m drowning in bookkeeping data but have absolutely no good financial information about my business!”
Sound familiar? Maybe you’re getting monthly financial reports but nothing comes together to draw a picture for you of what’s really happening inside your business. You’re not alone!
So many business owners are in this same spot: in businesses from 5-figures to 9-figures; they can (and do!) share this frustration.
You get a sheet full of numbers, but there is no context to them; nothing at all that ties them to your vision and understanding of your business. So, on a good day, you open a drawer, shove the financial reports it in, and say, “I’ll get back to that later.”
Now that solves an immediate frustration, but when you slam that drawer, the need to understand your numbers doesn’t leave you alone. You know you need to understand them. But you also know that it makes absolutely no sense for you to spend, as an entrepreneur, hours unraveling the garbage you are currently receiving.
So, instead, it turns into this gray fog that hangs over everything you do day in and day out. It’s a constant nagging worry. It’s the same for people with very low checking account balances, and those with large and growing checking account balances: I don’t know what to expect, so I just keep wondering if the other shoe is going to drop and tomorrow, everything’s going to crash land and I’ll be on the unemployment line or filing bankruptcy.
And that’s how it stays with you – UNTIL we turn that pile of data into meaningful information! Information. How? Well, the way to make finance and accounting become meaningful information is for you to stand up and say,
“Hey! I’m the business owner! And here’s what matters to me in my business. Here’s how I think about my business. Here’s what I want to know about my business; and here’s how I want to see it.”
You want to know:
- Is my business profitable?
- Am I making money (cash)?
- Do I have cash in the bank?
- What’s going to happen to my cash if I keep doing what I’m doing?
- What’s going to happen to my cash if I start doing things differently?
Your questions are that simple and basic. I know – because I run a business as well – and my questions are that simple and basic.
Unfortunately, what’s happened is that most of our bookkeeping systems have been set up solely for our tax accountants! Things are set up perfectly for filing taxes; but NOT for giving you, the owner, important information about your business operations and outlook.
But there is such an easy fix to this – and it involves only a fifteen-minute call with your bookkeeper. That’s it – it’s time to just TELL your bookkeeper how you think about your business in three specific areas:
- What stuff comes into your business (your talent and purchases)
- What do you do with that stuff (your “production” or special sauce)
- Where does it go when you’re done with it (your products)
If you tell your bookkeeper how you think about your business, you will be amazed the tools they have at their disposal even in the most cost-effective accounting systems to be able to seemingly all of a sudden create reports that make sense to you.
Here is your call to action: Ask for what you want so your financials can go to work for you instead of the other way around! Don’t pay a fortune and then shove those pages in a drawer anymore.