I graduated at the top of my class with a degree in Business Administration. I took Accounting 101 and 102 and got “A”s in both. My professors drilled this into my head: “Find a good accountant.”
Alas. That was a disastrously incomplete lesson.
What I wish I’d learned sooner: My money is my responsibility. If it’s my money, it’s my job to manage it. I can’t delegate financial stewardship to my accountant or anyone else. I tried for years to neglect my responsibility and dump everything on my accountant. And I dug myself a deep hole of debt. Ugh.
A good accountant could help you understand your asset from your elbow. A good accountant can help you clean up your financials and get them rocking’ right. Together, you can develop systems and procedures for making sure the money and the numbers are current and accurate and clear to you. So, that you can make better, faster, more profitable decisions. Not your accountant. Because it’s not his or her money.
What else I wish I’d learned sooner: The financials are not that hard to understand. It may be that no one ever taught you how to read them. In my case, at school, I understood a bit of the theory, but later, in my business, my financials were a mess. In school, the case study financial reports were assumed to be accurate. That, amigos, is a very costly assumption when it comes to your financials. Your stewardship requires that you make sure that they are right. Your job is to dig in and drill down and get to KFP – a Known Financial Position.
Once I got over my drama about not wanting to learn the basics, I discovered that financial reports are not that complicated. The words are weird. You need a glossary. It helps to have a good accountant to teach you accounting basics. You might also attend a financial webinar or two. (Stay tuned! I have great products launching later this year.) You can learn this! I’m happy to report that if a distractible, creative, no-attention-span person like me can learn how to read and use financial reports, then there is hope for you. 🙂
What I ultimately learned: It’s not too late if you start now. You can improve your situation. You can make better financial decisions. Like my husband Hotrod likes to say, “When you’re digging a hole, you can stop digging.” You can let go of your whining and frustrations. You could meet with you accountant and say, “It’s time for me to learn this. I don’t understand the Balance Sheet. I don’t get why I am always so short on cash. Will you help me make sure these reports are current and accurate? Will you help me understand what I am looking at?”
And if your accountant says, “Yes! I’m so glad you asked. It’s your money and you should know what you have, what you owe and what you own. You should know the score. Let’s get started,” well…you may have found yourself a good accountant. That’s not all you’ll need, but it’s a good start.
xo$, Ellen
PS…The attached picture is of John, accounting whiz at Zoom Drain in Philly, digging into the numbers with Jason, one of the owners Zoom Drain on Long Island. This is how it’s supposed to work. 🙂 Thanks, fellows! xo$
