In business, it’s only natural to be looking out for that magical new idea or that new way of doing things – anything that will transform your business and it’s bottom line.
However, searching for a “quick fix” or a “get rich fast” solution can often mean we miss the fact that small, less glamorous, yet achievable, improvements within your business can have a dramatic effect.
In Parts 1 and 2 of this series we covered the first four of six critically important reasons why in business you must have an effective, and efficient, accounting and reporting system and how, believe it or not, it can be the difference between achieving the success you dream of, and doing nothing more than surviving (if that).
Those critically important reasons are –
1. It’s the minimum price of entry (to real business success)
2. If it’s hard, you are doing something wrong (when it comes to your tax and reporting obligations)
3. It’s not just for the taxman
4. You’re flying blind without it
Now on to critically important reasons five and six –
5. What gets measured, gets managed
Chances are you will have heard this maxim before, and if so, you may consider it a cliché. However, ideas become clichés for a reason, because they ring so true for so many – and in our experience, there is nothing truer than ‘what gets measured, gets managed!’
In order to effectively manage your finances, it’s essential that you’re measuring them. And to do so, you need a system that provides you with accurate, timely, complete data. Consider the following two examples we use to guide our own business:
- A principle we stand by is that we pay ourselves first. Therefore, we decide how much we want to earn, and accordingly we set budgets, targets and goals that if achieved provide us with our desired outcome. We then measure, monitor and manage our figures and performance on a consistent and regular basis so that we can stick to our commitment to ourselves. And it works.
- A further item we measure is our “new” business each month and how that compares to the targets we had set ourselves. Our performance against this specific metric is measured in a way that is visual to all team members, and the result is that they are motivated to assist in managing it. This is demonstrated by the enthusiasm with which our receptionist will announce to the team that a new lead has inquired about our services, or when a prospect commits to becoming a client. Because what gets measured, gets managed!
You are the vision behind your business, and you are the only one who can take it to the next level.
6. Your time is too valuable
As a business owner, your time, and your energy, are your most valuable resources, and if you’re still managing your own accounting, we promise you that you’re wasting them both.
While we recognise that business owners are often required to wear many different hats, accounting is one of the first things they should delegate, because quite simply their time is far better spent elsewhere.
Take myself as the Founder and Director here at CapitalQ. I don’t go anywhere near the accounting for CapitalQ or for any of my other businesses… And I’m an accountant! What I do however, is hang out for and then carefully monitor and act upon the reports my accounting systems produce every month. See the difference?
You are the vision behind your business, and you are the only one who can take it to the next level. Therefore, you should ONLY be focusing on, and investing your highly valuable time on, the high pay off items in your business. These are the activities that have a high impact and provide leverage, and ultimately the things that make your business bigger and better.
Think about why you started your business in the first place, and if you haven’t achieved these things, ask yourself if you’re utilising your time and your energy in the most effective and profitable way.
Remember, working hard is not the answer if you are working on the wrong things!
To recap, the six critically important reasons why in business you must have an effective, and efficient, accounting and reporting system and how, believe it or not, it can be the difference between achieving the success you dream of, and doing nothing more than surviving (if that) are –
- It’s the minimum price of entry (to real business success)
- If it’s hard, you are doing something wrong (when it comes to your tax and reporting obligations)
- It’s not just for the taxman
- You’re flying blind without it
- What gets measured, gets managed
- Your time is too valuable(to waste on anything other than high pay-off tasks)
If you missed the previous posts in this series, you can access them below –