|
In
my narrow view, looking at debits and credits is as exciting as watching paint
dry. I can still remember the first week of my Accounting 101 class and my jumbled
thoughts after each class. What the heck is the teacher
talking about? Eventually, I got the process mastered and convinced myself that
a bookkeeping career would not be mine. The mechanics of recording business transactions
would have to be left to those who are gifted enough to be able to endure the
torture of accounting narcolepsy. I
learned how to read and analyze financial statements in spite of my dislike for
the rote details of accounting. However, after many discussions with business
owners, I am convinced that a majority avoid reading financial reports as often
as they avoid regular physical exercise. After all, if payroll is being met and
the checking account has money it, what else do you really need to know since
everything else about the business "feels good."
Custer
felt good about taking on the Cheyenne, Sioux and Blackfeet at the Little Big Horn, the captain of the
Titanic felt good about the ship's maiden voyage as he steamed away from the dock
and the day before the attack on Pearl Harbor,the American public
felt good about being neutral in WWII. I
believe strongly in using "gut feelings" in business but I believe just
as passionately about knowing the numbers. Living in a dream world without regularly
looking at your business's performance (that includes the business of your personal
household, too) can be an invitation for you to hear your own ship's hull striking
a mammoth iceberg. Understanding
your business's numbers doesn't mean that you have to
be the DNC (Designated Number Cruncher). That work is best left to those who excel at it. As a business
owner or manager, you have the responsibility to monitor the return that the business
provides on its investment. If the return on investment (ROI) is skinny, then
it's time to make some changes. Analysis
of your company's financial performance can be a simple as viewing a summary worksheet
weekly. Key performance indicators like accounts receivable, accounts payable
and cash on hand will make up part of the report. The management team can design
the report in fifteen minutes at the weekly management meeting. If you don't
have a regular weekly management meeting, you can start one of those, too. Your
personal financial picture will benefit from a regular review, too. Regular does
not mean once a year as your gather information for your tax preparer. Knowing
where the cash is going, how your investments are performing and where your are
likely to end up financially at year end will lead to the satisfaction of knowing
that you are in touch with your personal finances. Owning
and running a business is a challenging and rewarding pursuit. Doesn't that mean
that You Owe You a Return On Investment ? U.O.U.R.O.I I
work with small business owners with eight key strategies. Getting Control of
the Finances in your business is one of the key strategies. | 
