Better Business Decisions says there are 3 Ways to Reclaim Your Power in Your Business Numbers

Updated: Sep 8

The business world is full of bad advice.

We’re taught to delegate, optimise, outsource and expand at breakneck speed to hit that next financial milestone. But in doing so, we leave piles of incomplete knowledge, loose ends and unchecked data in our wake.

Inevitably, the mess we’re leaving behind us eventually catches up - usually as a painful reality reflected in our finances. It’s at this time my business advisory clients find their way to me with:

  • A business that is a chaotic mess they can barely comprehend,

  • Financial data that’s completely disconnected from reality and

  • An army of subordinates, sub contractors and advisors, who the owner thought were there to clean up after them as they rushed ahead into the future.

If your business feels like it’s run wild and you’re not sure where to begin damage control, let me take you back to where I believe the problem begins.

It’s about the time we start delegating, hiring and outsourcing before we fully appreciate the tasks we’re handing off.

And THAT is what makes it bad advice.

We’re told too soon to make critical tasks other people’s problem in our effort to stay floating blissfully in our zone of genius.

Now brace yourself for some tough advice from Liz: you don’t get to delegate (the action) important parts of your business until you understand them well enough to check the work of your delegate (the person). Otherwise, you place yourself at the mercy of their knowledge, rather than operating from the power of your own. And nowhere in your business is this more true than in your numbers.

Now that we’ve found the heart of the problem, let’s begin on the road to recovery - here are the 3 key parts of your business finances you need to understand in order to take back your power and regain control. Only then can you delegate from a place of clarity, and effectively manage those you have made responsible for these tasks.

1. Your Chart of Accounts

This isn’t some vague part of your accounting software that is more for your accountant’s benefit than yours. This is in fact ground zero for understanding your numbers whilst also getting a clear picture of your business’ reality.

Your chart of accounts is essentially the list of categories into which all aspects of your figures can be organised. It’s everything you spend money on, all your revenue streams, everything in your business that holds value. It is how you measure your business in a clear snapshot, and can be as detailed or as broad as you see fit.

Where the disconnect usually occurs is when we subscribe to accounting software - Xero, MYOB, Quickbooks - which comes with ‘out of the box’ account names designed to be a list of generic examples. We then try to allocate income and expenses to these generic categories, rather than renaming them as it relates to our unique business. This reverse engineering of categories is where our reporting starts to get vague; the data is fast becoming disconnected from reality.

Think of it like this: in Xero, there is a standard account called 400 - Advertising, described as “Expenses incurred for advertising while trying to increase sales.” So any advertising expense would be allocated here - Google Ads Payments, Facebook Ads, radio, print, partnerships, etc.

But can you know at a glance which type of advertising is costing the most? How do you know which is the most effective? How can you compare these expenses against your marketing reports to justify how much you spend, and on what platform?

You can only manage what you measure. Try instead creating accounts in Xero for each type of advertising you invest in. Then, when you analyse the platforms sending traffic to your website, suddenly you have clear data that shows you which platform is earning its keep in your business.

Now imagine applying tailored categories to all areas of your income and expenses. A world of critical data could be at your fingertips.