I have heard three horror stories this week of business owners being told late in the day, the extent of their personal and business financial liabilities. One owed HMRC almost six figures – an eye watering amount which could be business critical. The other a personal liability that was due within the week and she didn’t have the means to pay it.
When questioned, they didn’t see or speak to their accountant more than once a year and cannot remember the last time they looked at their finance reports.
Now it is easy to say “A business owner should know!” but the reality is that they don’t know what they don’t know and often abdicate financial responsibility to their accountant. Those that know me well will know that I have an issue with this and feel that some accountants should be stepping up and doing better. I will leave this debate for another Snippet, but i’m unsure I could get it into 60 seconds.
When I work 1-2-1 with a client, we dig deep on the numbers and often, some of the early discussions are around the detail and frequency of the financial reporting that needs to be introduced.
Once this is in place, part of our monthly mentoring session is to review the numbers and the story that they tell so we can see how the business is performing now and is predicted to perform.
It is impossible for any business owner to make an informed investment decision on hiring a team, ramping up marketing, improving processes or even taking more drawings without knowing the numbers.
I have been with two clients specifically this week who have had record months in November. It is no coincidence that their understanding of the numbers has enabled them to invest in profitable growth and build businesses that have the ability to deliver record revenue, profit and cash results.
I met with my accountant this week, Debbie of Not Just Numbers who is indispensable to me and my businesses. Every month she talks me through my previous month and year to date results v budget. She talks me through my personal and business liabilities. She assists me in updating my financial forecast for the next 12 months. All in a language I understand.
I have crystal clear clarity on my numbers every month and consider it one of the best investments I have made in almost 13 years of business.
If you buy your accountancy support on price, it will potentially cost you a hell of a lot more in the long run. You won’t know your numbers, you will struggle to invest wisely and you could end up with a liability that you didn’t expect.
Choose wisely.
If you have any horror stories or even good ones, I’d love to hear them.
Running a business is tough and without the right plan, the right support and the right focus, it’s easy to become trapped. When you get to this stage, you often feel overwhelmed, stuck or uncertain as a business owner. Discover which one of four areas of your business is trapping you and how you can achieve the freedom to choose where, when and how you work. Take our Business Trap Diagnosis test here: tendo-uk.com/diagnosis
