Loving Your Numbers – Discover the Secrets
Take A Journey with me to Loving Your Numbers?
Before we begin on the journey to Loving Your Numbers, let me tell you I love numbers, numbers tell stories, great stories and nightmares. Understanding your numbers story and what it is telling you about your business is a key factor to success and growth, so that’s my business, that’s my passion. Let me also take a moment to introduce you to the tools I love to unlock these numbers stories for not only my business but also for my clients.
MYOB, my favourite accounting system either in the cloud or on the desktop, ask anyone and they will tell you that I love MYOB, even to the point that my 50th birthday cake was emblazoned with the MYOB logo, but this software, out of the box (cloud these days) meets the needs of around 80% of my clients with no need to investigate other add ons or solutions. My other favourite tool is my Microsoft Surface Pro 4. Recently Microsoft approached me to become a Microsoft Small Business Brand Ambassador, a task I happily accepted and Im very excited about.
Im proud to support these two outstanding and innovative companies with my business and also showcase the benefits of these brands to my small business clients. So with these two key tools (shown in the image above) in my arsenal it provides me with the ability to be mobile, to take the numbers story anywhere, anytime and provide valuable assistance to my small business clients either onsite or using other remote tools. These are the engines that drive my business. Over the coming weeks I will be using these tools in many of my posts to highlight how we unlock the secrets to loving your numbers. So let’s continue with today’s post…
Thank goodness that financial year is finished!
The end of the financial year is over and everyone breathes a sigh of relief. You and your bookkeeper have worked hard to ensure everything is ready and now your accountant has all your bookkeeping and financial data and is weaving their magic to provide you with your nicely bound financial reports for the last 12 months.
Ask yourself these top 4 questions
- How many previous years nicely bound reports are sitting in your files somewhere never thought of again?
- How many times have you wished you could just look at those reports and understand exactly what they mean?
- How often do you feel intimidated to ask questions of your financial advisors?
- Do you feel baffled by balance sheets, or confused by cash flow statements?
Then read on….
Over the next 6 weeks I will hopefully explain to you the basics of finance for small business owners, help you become familiar with the terminology, be able to read this years’ beautifully bound reports with some confidence and understand what it all means and therefore make some very informed decisions about your business and your plans and directions for the next 12 months.
What are financial statements?
Financial statements are the language of business.
Financial statements come from your accounting system. These statements contain important information about your business’ operating results and financial position. This information is important for effective management and financial control and as a small business owner you have to be able to interpret this information yourself.
The relationship between certain items of financial data are used to identify where your business is strong and, more importantly, where there are opportunities for improvement. Balances in the various accounts are tracked and summarised in the financial statements. Using, understanding, and interpreting these statements will help you make much better business decisions.
How a Bookkeeper helps you unlocks hidden secrets
To become fluent in financial control and management takes a great deal of training and experience, that’s where establishing a working relationship with a great bookkeeper can be a wise investment in your business. Not only can they assist you with setting up and customising an accounting system to suit your particular needs and perform the bookkeeping process (how day-to-day transactions are recorded), their training, skills and experience take into account the complexities of GST interpretation, payroll management, inventory control and the many other financial tasks that assist you to ensure the health of your business.
A good bookkeeper can work with you to set goals and key indicators of performance in your financials and monitor these, on a more regular basis than just the once a year glance, to ensure that the decisions you make are based on sound, accurate and up to date information. A great bookkeeper ensures you remain compliant with all the complex legislation, will inform you of changes and updates and ensure that you keep hitting the never ending of calendar of due dates for all things financial.
In closing, I hope you will journey with me through the next few weeks as we unlock the secrets of loving your numbers. Over the coming weeks
- we will be exploring the chart of accounts (the engine that drives your accounting system)
- we will examine and unlock the mysteries of the key financial statements, the balance sheet, the profit and loss statement and the cashflow statement
- we will then delve into the key cashflow areas of sales and purchases and how these drive your cashflow on a daily basis
- finally, we will look at benchmarking and some simple financial ratios that can provide you with key indicators or the health of your business.
So until then, take some time to Love Your Numbers