On Thursday I spoke at NRG on issues people have with their business finances.
I can imagine many of you would rather have your eyes poked out with hot tongs than come to such a talk. However, there is no getting away from the fact that we are all in business to make money.
Only a very few people have the privilege of doing a job for money which they love so much that they would do it full time – even if they were not paid for it!
This means that whether your business is making money, or not, is a key to how successful it is – irrespective of your wider goals.
And yet many business people I meet are ignorant of how well they are doing financially. They look at their financial statements once a year (often several months after the year the statements relate to is finished) and admit that they don’t really understand what their accountant has produced for them.
Worse – they stick their head in the sand by ‘filing’ bank statements away in a drawer to ‘deal with’ later, and are reluctant to ask their customers for the money owed to them, because they are embarrassed to do so. This means they are likely to have problems with cash flow and incur high bank charges – aren’t we all fed up with paying bankers!?
If you are serious about business you have to be serious about money and that means taking responsibility for your business finances. This does not mean you have to be an accountant but it does mean you need to have financial information available to you on a timely enough basis that you can use it to make informed decisions.