The perils of leaving your numbers to someone else
For the past 10 years I’ve been independently helping businesses make better decisions by providing unbiased and objective analysis of their numbers.
Some of these businesses I have worked with directly in detail and others just in passing, some have been tiny and some have turned over millions, but all too often I have found business owners abdicating responsibility for their numbers and losing touch with what’s happening.
The consequences are heart-breaking and range from misguided decision-making to serious fraud. As the business owner, you have no choice but to pick up the pieces.
So let’s make sure these things don’t happen to you. I beg you to “Do yourself a favour” and start to “engage” with your numbers. Here’s an insight into how…
A fitness regime
Have a business fitness regime that includes weekly, monthly, quarterly check-ins with your reports and/or numbers people.
Print your results so you can draw on them and compare with the next round. It might be that your gut instincts have got you to where you are, but the aim is to let the numbers guide you to where you “want” to be.
Make sure the numbers align with what you expect is happening in the business. Is it performing how it should? Ask questions, get curious, and investigate.
A little healthy skepticism
You are the business owner which means the buck ultimately lies with you, so occasionally a little healthy skepticism might be required when it comes to the numbers you are presented.
- Beware the team that tells you (or the bank) what you want to hear.
- Beware the beautiful spreadsheets that you feel powerless to question .
- Beware of templated strategy and management theories undermining the things that really matter i.e. Relationships with customers, suppliers and employees.
Know the tech limitations
Prior to DIY database accounting, accounting systems were elegantly simple. There were routines and reports in proven formats that had to be run at month-end to save hard drive space. These reports were at our fingertips and could be physically retrieved, reviewed and compared at any time.
Now in the information age they are all there “inside the screen” sliced, diced and delivered in whatever format you ask. The first question though is, ‘Do you know what to ask for?’.
This flexibility has undermined the confidence of many a business owner, but it shouldn’t.
Discuss and hold to account
Discuss your results with external mentors and explore possibilities.
Most of all be strong and determined or your “lizard brain”. Your primal doubts will keep telling you that you’ll never understand it.
The truth is:
- You can understand it.
- You can hold accountants and bookkeepers accountable.
Feel empowered to call the shots. Interrogate the numbers of your business. They tell the story of your past, present and future and the numbers team supporting them rarely have the wisdom to know what they should measure.
Want help to make Better Business Decisions
With over 30 years experience spent deep in the trenches of tax accounting and small business, Liz Jarvis is far from your average chartered accountant.
As the founder of Better Business Decisions, she is a passionate advocate for small and medium business, who educates and empowers operators to understand the story their business numbers tell.