You're an entrepreneur, not an accountant. You hate (read: loathe) dealing with the numbers side of your business. You probably aren’t getting the info you need to run your business and, if you’re honest, you don’t actually know what you need – you just know you’re not getting it.
It’s a vicious cycle, and you’ve picked up a legit case of balance-sheet anxiety.
The problem lies with the way in which most entrepreneurs, particularly emerging entrepreneurs, think about accounting. They don’t have the complete picture. They think it means the basic hygiene of accounting – the day-to-day bookkeeping, payroll, expenses, filings, monthly reports, etc., etc.
Of course, that’s an important part of it. It’s critical if you’re ever looking for financing, undergoing a Canada Revenue Agency audit or looking to sell. Your financial record-keeping is like the bathroom in a restaurant. If the bathroom is a mess, it makes people wonder what the kitchen looks like. It’s the same thing with outsiders (bankers, investors, buyers) looking at your books. If they are a mess, they may not want to eat what you make in your kitchen.
But accounting hygiene isn’t really why you have an accounting department or bookkeeper.
Sure, it is their responsibility, but it isn’t their core purpose. Way more important are the financial insights, the numbers that fundamentally drive your business. It’s up to your accountant to deliver that information to you in a language you understand – not in pages of financial statements and reports that you’re not going to look at anyway. It is not your job to interpret the financials. Yes, you can take one thing off your to-do list.
But there is one thing to put at the top of your list. You need to know what good financial insight looks like when it’s done properly. This is tough because there is so little of it for emerging businesses. Essentially, it’s a deep dive into trends, ratios and benchmarks data (the crap you don’t want to do) delivered to you in practical, understandable language. It’s a dashboard that allows you to understand your financial position in a 30-second glance and to give you confidence to pull the right financial levers within your business.
It’s time to demand more of your internal accounting team. Don’t let them get away with handling just the hygiene. Demand they raise their game and deliver financial insights so you can focus on driving results in the business, not getting caught up playing accountant. •
Spencer Sheinin is the founder and CEO of Shift Financial Insights, a business that provides simple accounting solutions and financial insights for emerging businesses, especially when a bookkeeper isn’t cutting it.