At the time of writing this, I’m nearly a published author after writing my book in a week.
That’s not a typo. One week.
Now if you’ve been playing along at home for a while now, you’ll know this about me:
BUT what this process has inadvertently given me – the week I just spent on the book and all the decisions that led into it – is a framework that would be perfect for YOU.
You, the business owner who has been meaning to get their financial data in order. But there’s always more immediate fires to put out, other priorities slotting themselves into your job-Jenga list. As a result, you take feelings of anxiety and dread into every meeting you have with your bookkeeper or accountant.
Ever have those projects that seem to perpetually live in that ‘someday’ pile? The ones that you tinker away with like a hobby, even though the finished product could really move the needle in your business?
That was my book.
Now I’m a big believer in the notion of things landing in their own good time. I can see how there were parts of what I wanted to write about that needed to evolve before this book could become a reality. I don’t regret it taking this long to come to fruition.
But your financial data is not a memoir.
It’s not a passion project that will be nice to have one day. Every day your data remains a disaster – or at least, not being organised in a way that gives you instant answers – is a day of missed opportunities and increasing vulnerability.
If these are all hitting you in the feels, it’s not because you’re uniquely disorganised. Or rubbish at maths, numbers or whatever skillset you think you lack (that you don’t necessarily need to succeed). There are tons of entrepreneurs out there just like you – I should know, I work with many of them.
Which brings me to what writing my book taught me, that I in turn want to share with you. This is so you can:
Finally feel like the data serves YOU in making prosperous decisions in your business.
Here’s the kicker: I didn’t figure this out alone.
You may have heard the term ‘container’ recently – it seems to be a trending buzzword in the coaching and mentoring space these days. For good reason.
Many are realising that a container is a great way to set specific goals within a specific period of time, giving you a clear process and metrics for success.
For my book I worked with Inspirational Book Writers, an organisation that guides aspiring authors through their week-long intensive writing program (as well as the editing, publishing and distribution thereafter). The week was highly supportive and collaborative, with scheduled team check-ins and well-structured milestones.
Side note: if a book has been on your mind for a while, I highly recommend this process – you can check it out using my affiliate link here.
I knew I needed to get out my own way for this to work. That meant getting away from the usual distractions of my home and office. I treated myself to a beautiful environment, a local farmhouse brought to me through the serendipity of my dad falling in love and getting married in January - the place arrived, then the process arrived.
So how can this help you with getting your financial house in order?
You probably have a lot of ‘sorting out’ to do before you can dip in and out of your data with ease. Creating time to take your time in getting your head around it can be a great start. It could be as simple as blocking out your calendar for the day and going to a temporary office space. Not at home or at work, but an environment that can be a momentary clean slate for you.
Or (if you have the budget) book yourself a weekend away; go somewhere close enough to be an easy trip, one that offers you the chance to take regular breaks, get outside and stretch your legs.
Wherever it is, it would be great if it could be:
You might be thinking: that seems a little excessive for a Xero tidy up. But let’s remember the alternatives that may have failed you this far:
Making an event of it could be the exact approach you’ve been missing.
Another pitfall of writing my book unsupervised was my tendency to include everything and the kitchen sink. What this container gave me was the discipline to only say what was needed. Working with someone on the IBW team who was there to ask the question of necessity was a fantastic layer of accountability (more about accountability partners in Step 3).
Similarly, I know firsthand how easy it is to fall down the rabbit hole when sorting out financial data – especially if it’s been left unattended for a while.
To that end, there are 3 things I would recommend you focus on in your own container:
Your Chart of Accounts is the fancy name accountants give to the list of categories that everything you earn, spend, own and owe falls into. Often when business owners bring accounting software into their business (Xero, MYOB, Quickbooks, etc.) they begin working with the default ‘out of the box’ categories without first creating custom accounts (read: labels).
This sets them up for a dangerous pattern of shoehorning their financial data into the categories available, resulting in an attitude of ‘close enough’ and reporting that always feels off.
Take marketing expenditure as an example.
You may be putting all your advertising into the ‘marketing’ pile: Facebook Ads, Google Ads, local print, signage, letterbox drops, email marketing, etc. This is a common one when we view our financial data management as being for the ATO first, us second. After all, isn’t it easier if all our deductibles are the one spot?
But what if we want to use our software to analyse and compare our return on investment?
How can we measure and compare the outlay vs income of these channels to see which ones we should keep (and which we should reconsider) if they’re all lumped in together?
See what I mean about opportunities and vulnerabilities?
You can only manage what you can measure, so use this philosophy as you create separate labels within each of the broad categories in your business. Within what you earn, spend, own and owe, what would you like to be able to measure?
Don’t freak out: you don’t then have to overhaul EVERY SINGLE TRANSACTION in your business. What we’re creating here is a framework for your future reporting. All you need to do is add the new ‘containers’ to your chart.
This would be the perfect task to hand over to your bookkeeper, who likely knows all the shortcuts and can move through the software faster than you. Give them the labels, a description of each where needed and the chance to reach out to you if they need to clarify.
Trust me: a savvy bookkeeper is going to see this as a fantastic way to make their life easier too.
Next, you’ll want to have a look at your Balance Sheet, followed by your Profit & Loss Statement. The question here is simple: what doesn’t feel right here in the labels and the dollar values?
This is another ‘trust me’ moment: I can’t tell you the number of times I’ve sat with a client to look over their data and almost immediately they exclaim ‘that can’t be right!’
Owner’s intuition is powerful and is often discredited by accountants. But just because they don’t see it as an important factor doesn’t stop it from being arguably the most important factor in understanding the finances inside your business.
Your software should allow you to click into the labels shown, so dive in and get curious. Have a notepad or a Word / Google document open and make notes as you go. This isn’t about solving all the world’s problems, but rather placing little flags that require clarity.
Also, don’t hold back thinking you’re missing something obvious. I’ve said before that your financial data could be full of junk and inaccuracies. If something feels out of place, there’s a good chance it is. And the place it’s most likely to make itself known is right there in your Balance Sheet.
As entrepreneurs, it’s very easy to get stuck in our own heads.
There is great freedom in self-employment, with the only guardrails being the ones of our own creation. BUT in place of someone else setting the rules can be our own barriers of insecurity, procrastination, overwhelm and confusion.
Which is why we need to actively seek out others with complementary skill sets and viewpoints to ours, people we can work alongside to keep moving forward.
I’m hugely grateful to the IBW team for creating a container of progress, accountability and support that I could never have achieved on my own. Ironically, it mirrors what I do for my business clients in achieving the level of financial confidence and literacy they need to grow prosperous businesses.
We work together to make the disorganised more clear; we get curious and dig deep before putting systems in place to ensure long term ease of access. From then on, the business owner has the information they need to make critical decisions in a way that is elegantly simple.
You may have a financially savvy someone in your space who would make the perfect accountability buddy for you. Or you can always jump on a free call with me to see if we’re a good fit.
But either way, don’t force yourself to face this alone.
From there, it’s time to book a follow-up appointment with your accountant. You might want to send your list of questions ahead of you to make the most of your time together. But DO NOT leave that meeting until you’re satisfied with your own level of understanding.
If you feel ‘stuck’ in this conversation, try the 5 Whys: a valid communication tool where basically you get to ask ‘why?’ until you understand the principles behind what’s being recommended and done on your behalf. Try it and see for yourself what bubbles to the top!
Regardless of how you proceed from here, this is what I want you to know:
All you need to do is start. Book that day. Block out that time. Create space. Get curious. And find someone to walk the path with you. Want to book that call to see what’s possible?: https://lizjarvis.youcanbook.me/
|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 30 minute chat with me: https://betterbusinessdecisions.com.au/