In my first year of business, I would judge the success or failure by what was in my bank account.
Account go up = Good.
Account go down = Bad.
I should also mention my emotions were heavily tied to this also.
Account go up = best guy to be around.
Account go down = I wouldn’t want to be near this guy.
Anyhow, after 9 months of doing this, it became pretty clear this was a dumb way to do things.
Every time an annual expense came up, it would lower my bank account, and I would act as if my business is failing.
It got to the point in which I would delay paying for things just to keep the account up.
It also meant I severely under-invested in my business to keep my bank account at a certain level…
Which is incredibly dumb.
I resisted hiring people unless absolutely crucial and would often just work more hours to make up for it.
This left me working big hours doing tasks I could outsource cheaply.
It’s no wonder I wasn’t making much money, and my business wasn’t growing.
I thought the role of a bookkeeper was to give my accountant what he needs, so I don’t get into trouble with the ATO…
Basically, keep me “compliant” with tax, GST and super.
I didn’t bother to read the reports… as that was for the accountant.
I just thought my accountant needed them for something.
I started searching online for how other business owners were dealing with this.
Was everyone else a wreck managing things by their bank account?
I came across a video by Keith Cunningham.
Within 2 minutes, it hit me like a kick to the face.
Running a business by a single bank account is possibly the dumbest way to run a business.
It would be like driving a car without a dashboard.
Do I need fuel? No idea
Am I going too fast? No idea
Is the engine light on? No idea
I had no idea what was actually happening in my business.
I wouldn’t drive a car without a dashboard.
So, why on earth would I run a business without one?
The financial reports my bookkeeper had been sending me WERE that dashboard!
Yes… I had the dashboard and I was paying someone for it but I didn’t learn how to read it or use it. (facepalm)
After that, I went on a rampage to master reading and using my financial reports.
This is a skill that pays me immense dividends today.
I want to encourage you to become strong in reading and using your financial reports.
It’s a critical skill for a Business and Investing.
To go further, I made a podcast topic with Matt Williams (our resident bookkeeper).
“Bookkeeping for compliance VS Bookkeeping to drive results.”
We go deeper into the topic and highlight how you can work better with a bookkeeper.
All information we share is NOT financial or investment advice and is purely intended for entertainment and educational purposes only. Always seek professional advice before acting on any financial decision.
00:00 Welcome to Business and Investing
01:05 Learn about Matt Williams of Platinum Financial Services
02:15 What bookkeeping for compliance means
04:03 The advantage of working closely with your bookkeeper
08:50 Common mistakes people do about their finances
12:19 How bookkeepers work best with their clients
20:26 Changing up your financial metrics to utilise growth
22:52 How to improve at reading and analysing financial reports
27:06 Getting the most out of your bookkeeper’s services
If you enjoyed this episode, be sure to subscribe, tune in and share this podcast!
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ABOUT THE GUEST:
Matt Williams is part of Platinum Financial Services which focuses on providing business owners with the best bookkeeping service across their business, investments and personal income, which allows you to concentrate on more significant aspects of your business.
They completely reconcile all of your financials and help you understand your numbers so you can make the right decision for your business based on evidence, not opinions.
To connect with Matt and his experienced team of bookkeepers, head over to: https://businessandinvesting.com/partners/platinum-financial-services/
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