admin As entrepreneurs, we always get this advice that we need to know our numbers, right?
You come home at 9:00 at night after you’ve done a full day of work. You’ve been the marketing executive, the operations person— the last thing you want to do at night is start entering accounting transactions and reconciling your bank statements. It’s not as efficient with it because you don’t like it, you don’t want to do it, it’s the last thing you want to do.
I want to be clear, this advice isn’t suggesting you memorize your exact numbers. Yes, we should know some of these things, especially in a product-based business, but I want to talk about the three different dimensions where you should be focusing your attention if you’re looking to get to know your numbers a bit better and to start using them to your advantage.
It’s really not enough to just categorize your transactions in QuickBooks! A lot of folks assume that getting to know your numbers means getting QuickBooks, making sure you’re going in, allocating your transactions every month, maybe you’re reconciling your bank statement. Cool box checked, I’m done. Not quite, it doesn’t really mean that you have any ownership or mastery of what those things are telling you.
To make sense of the numbers in your QuickBooks, you need to have a good understanding of financial analysis and reporting. This may require hiring a professional accountant or bookkeeper who can help you interpret your financial data, identify trends and patterns, and make informed decisions based on your financial goals. While you can certainly learn these skills yourself, it can be time-consuming and challenging to master. By outsourcing this work to a professional, you can free up your time to focus on other aspects of your business while still having the peace of mind that your finances are being managed effectively.
Creating a cash flow plan for your money instead of letting accidental results happen to accidental success or accidental failure. Creating a budget creates less reactivity and more predictability in our businesses, so in the process of budgeting, you know, doing cash flow projections, which may sound scary, we are all too empowered to help build financial literacy.
Some of the things you will be available to do when you have monthly financial plan in place :
- Financial Analysis and Reporting: You need a solid grasp of financial analysis and reporting to extract meaningful insights from your QuickBooks data. This involves interpreting your financial data, identifying trends, and making informed decisions aligned with your business goals. While you could learn these skills yourself, hiring a professional accountant or bookkeeper is often more efficient. By outsourcing this work, you can free up time to focus on other aspects of your business while ensuring your finances are managed effectively.
- Ongoing Support and Guidance: A quarterly plan from your accountant may provide valuable insights, but sometimes you need more personalized and ongoing support. Life and business are unpredictable, and having someone by your side to navigate financial challenges can be invaluable. Whether it’s adjusting to changes in cash flow, making strategic decisions, or addressing unexpected expenses, having a financial expert in your corner can provide peace of mind and clarity.
- Signs You Need Help: Recognizing when you need financial assistance is crucial. If you find yourself constantly stressed about money, missing bill payments, procrastinating on financial tasks, or facing unexpected expenses without a plan, it may be time to seek professional guidance. These are all signs that you could benefit from a more comprehensive approach to financial management.
- How I Can Help: As a fractional CFO, I specialize in providing personalized support to help you navigate the complexities of business finance. From creating monthly financial plans to offering ongoing guidance and support, I’m here to ensure you feel confident and empowered in managing your finances. Whether you meet with your accountant once a year or have regular check-ins, I can provide the extra support and expertise you need to succeed.
Having a plan for where you want your money to go is also a very important piece because then we can start to create predictability in our business as entrepreneurs.
Now, I’m curious—are you currently receiving monthly financial plans from your bookkeeper and accountant, or do you rely on annual meetings to discuss financial matters?
If you need some help with this book a financial strategy call today!
