Have You Delegated Too Much of Your Business Finances?

If you’ve ever found yourself wondering, "Have I actually delegated too much of my business finances?" you’re not alone. Many business owners, particularly women who manage the delicate balance of family and professional life, grapple with this question. It’s completely natural to feel this way, and I want you to know that your concerns are valid and shared by many.

Delegating tasks is a hallmark of effective leadership. It shows that you trust your team and recognise the importance of focusing on your zone of genius. 

But there’s a crucial distinction between delegation and abdication. 

  • Delegation means you’re still in the loop, making informed decisions based on the insights your team provides. 
  • Abdication, on the other hand, leaves you in the dark, disconnected from the very heartbeat of your business – its finances.

When you’ve entrusted your accountant and bookkeeper with your financial data, it’s easy to step back and let them take the reins. However, if you start feeling uneasy or disconnected from the financial health of your business, it’s a sign that you need to get more involved. This doesn’t mean taking back every financial task; rather, it means understanding and overseeing the key financial aspects that influence your business decisions.

Here’s the thing: your instincts are crucial. If you sense that the information you’re getting isn’t painting the full picture, then it’s time to dive in a bit deeper. This doesn’t mean you’ve failed at delegation; rather, it means you’re taking proactive steps to ensure your business thrives.

Still kind of wincing at the idea of taking on the ‘work’ you struggled to offload in the first place? Let me share a story about my dad that beautifully illustrates the power of getting back to basics and taking control of your life.

Image courtesy of Unsplash: https://unsplash.com/photos/cooked-dish-on-gray-bowl--YHSwy6uqvk

Reclaiming Control: A Personal Story of Transformation

My dad was diagnosed with diabetes well over 10 years ago. Like many people in his situation, he was prescribed medication and told to accept this as his new normal. My dad, who has always loved the experience of sharing a meal and the joy that good food brings, felt disheartened. He didn’t think to explore radical changes in his lifestyle or diet; after all, the doctor’s advice seemed final.

Then, just last year my dad remarried a wonderful Lebanese woman whose love language was also food, but in a way that provided for, nourished, and nurtured her loved ones. She began to cook him an array of traditional, wholesome meals from scratch. It wasn’t long before we all noticed a significant change, and his symptoms started to disappear. After being loved to bits through good food my dad is no longer having diabetes injections at 86 years young - his endocrinologist was amazed! He’s happier, healthier, and has more vitality than ever. 

Note: This isn’t about giving medical advice – it’s about illustrating the profound impact of taking control and making informed, deliberate changes on the most basic, fundamental level. 

This story resonates with many of us who have been told to simply accept things as unchangeable, despite our discomfort and lack of control. It’s a powerful reminder that we can often reclaim our power and make transformative changes, even in situations that seem out of our hands.

Image courtesy of Unsplash: https://unsplash.com/photos/woman-holding-white-mug-while-standing-nMffL1zjbw4

How You Can Reclaim Control

Just like my dad’s journey to better health through understanding and changing his relationship with food, you can transform your relationship with your business finances. By getting back to basics, understanding the core aspects of your financial health, and being actively involved, you can regain control and steer your business towards a more prosperous future.

The big thing to keep in mind: It’s not about taking on every financial task yourself. Instead, it’s about understanding the key aspects that drive your business. Here are three crucial areas where reclaiming control can make a significant difference:

1. Reading Your Reports

Start by familiarising yourself with your balance sheet. This document provides a snapshot of your business’s financial position at a given time. Question anything that doesn’t feel right, especially if you may have had years of poorly organised transactions. Don’t hesitate to dig deep – it’s your right and responsibility to understand this incredibly important 1000ft view of your business. Once you’re comfortable with your balance sheet, move on to your Profit and Loss (P&L) statement. This will give you a clear picture of your revenues, costs, and how profitable your business truly is.

2. Understanding Your BAS

Your Business Activity Statement (BAS) is a crucial document that summarises your business’s tax obligations. It’s not just about pressing "lodge" to satisfy the ATO; it’s about understanding your business activity. The ATO wants to know about your business activity, so why shouldn’t you? Take the time to review your BAS before lodging it, being intentionally mindful of the actual GST collected and paid. This process not only keeps you compliant but also keeps you connected.

3. Reflecting on Your Financial Data

Regularly contemplating business with your financial data is essential. Your bookkeeper may be excellent at allocating and organising data, but that’s not the same as reflecting and analysing it. 

Organising your data into meaningful labels via your Chart of Accounts, is critical. This article I wrote about this will give you more detail here. Remember, bookkeepers can make mistakes, and their best guesses often err on the side of caution. It’s your job to ensure these mistakes don’t go undetected for too long.

Regularly reviewing and analysing your financial reports allows you to catch these errors and make informed decisions. Reflect on the data, understand the trends, and use this information to drive your business forward.

Image courtesy of Unsplash: https://unsplash.com/photos/woman-sitting-on-grey-cliff-d1eaoAabeXs

Your journey starts here. 

By getting more involved in reviewing your financial reports, understanding your profit and loss statements, and scrutinising how your data is managed, you empower yourself. This knowledge not only boosts your confidence but also allows you to have more meaningful conversations with your financial team. You can ask the right questions, challenge assumptions, and ensure the financial strategies align with your business goals.

In my experience, when business owners, particularly women, take this step, they often have those 'aha!' moments where everything starts to click. They move from feeling uncertain to being confident decision-makers.

So, should you take some tasks back? Possibly, but more importantly, you should take back the oversight and understanding. Your role isn’t to replace your accountant or bookkeeper but to enhance the collaboration with them. By doing this, you’ll not only get a clearer picture of your business but also steer it towards greater success with confidence and clarity.

If you’re ready to take the next step and truly understand your business’s financial health, I invite you to book a Financial Power Hour with me. In this one-on-one session, we’ll dive into your financial data, address any concerns, and develop strategies tailored to your business’s unique needs. This is your opportunity to regain control and start making better business decisions.

Click here to schedule your Financial Power Hour. You’ll be amazed at how much ground we can cover in a single hour! Let’s work together to transform your financial uncertainty into clarity and confidence. Your business deserves the best, and it starts with understanding your numbers.

Disclaimer: These are yuck and boring but unfortunately a legal requirement for professionals in my industry. So just a reminder, the information contained here is general in nature and you should seek financial and business advice tailored to your own personal circumstances. Which, by no small coincidence, I can help you out with. Head over to my website and book a free 15 minute chat with me: https://betterbusinessdecisions.com.au/ 

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