June 15, 2024

Looking After the Money in Your Business – The Role of People Who Are Doing Your Numbers

5 min read

If you want to create a business that works for you, you need to know how to get the right people in your financial area – because they are the people, or person, that’s most going to assist you to make more money!
Now I’m going to start by being very controversial here as one of my pet hates is business owners using the lowest trained person in their business to do their figures. This is usually a very lovely administrative person or the receptionist. Although this person may be the loveliest people in the world, they are not specialists in money. Your Money!
It sounds like a contradiction when I spend a lot of time talking about dumming down the systems in your business so you can hire anyone to run them. And that’s true. But, your financial affairs are THE most important thing in your business. Because without it, you don’t have a business. So treat it with the respect it deserves. If I said to you to get your butcher to do your books, but give them an operations manual to help them, you would think I’m crazy. Yet many business owners are quite happy to hand their books over to an untrained person, who is usually also the lowest paid person in the organization, to provide them with the most important information on their business.
You may argue that it’s only data entry – but have you not heard the saying “rubbish in, rubbish out”? It can cost you thousands of dollars and many hours of angst if this person gets it wrong. Pay attention! If you walk away with nothing else during our time together, it must be this. Do not use anyone other than a trained professional to look after your money.
Believe me, $1 saved now will cost you $100 down the track when you’re trying to fix it. Not only that, but it can take up a lot of headspace and time that you could be spending marketing your business.
If you don’t require someone full time, then there are many options available to you, including outsourcing to someone like a bookkeeping specialist, if you only need someone on a part time basis.
No matter whether this person is internal or external, that is an employee or a contractor, it’s imperative that you provide this person with the training to ensure that they are consistently entering and processing your financial information. You need to train them in your financial systems. There are a couple of reasons for this:
1) Firstly, it means that you have an understanding of the financial aspects of your business. I can honestly say that I’ve done every job in a business – that’s way I can spot a discrepancy at 100 paces. And without that in-depth know-how you’re flying by the seat of your pants – which is dangerous.
2) Secondly, it means that you know what information you should be asking to ensure that you keep your finger on the financial pulse of your business.
3) Thirdly, you will then know if something is not right. You’ll know IN ADVANCE if you’re not going to make a profit so you can make some adjustments to ensure that you do make profit. It also allows you to keep track of your money – rather than relying completely on someone else to make sure that its all covered off, then finding out when its too late that it’s not.
So don’t learn this the hard way like one of my clients did. And I’ll share with you his story so you can see that it doesn’t always just happen to someone else. This is the story of a client I worked with a couple of years ago who was as keen as you were to abdicate his responsibility around financials – so that he could focus on a more exciting area of his business – sales and marketing.
My client had a successful business where he employed a girl to do his books – he was very excited because she was a bit of a girl Friday. She could manage reception, book clients in, handle all the administrative side of the business, then to top it all off, she could also do the books in his business. She was so good that she had a complete handle on all the finances. In fact, she was so trusted that she also became a signatory on the bank account. That just mad it so much easier, because that way she didn’t have to bother him to sign the cheques. She just did it all.
Then one day, she didn’t come to work and no-one could get hold of her. After a morning, he was puzzled, after all she had never not rung in before. At the end of the day, he was concerned that she had been involved in an accident or something equally awful had happened to her. At the end of the second day, he was starting to panic. At the end of the third day, he was sitting at the desk in his office looking at the safe, when his heart stopped and he suddenly found it hard to breathe. No, he thought, she couldn’t have flitted off somewhere. He opened up the safe and found no money or cheque books – not even the old ones. He then started up the computer and found that the hard disk had been wiped.
There were no financial records anywhere. In a panic he searched invoice files – they were all empty. He then went to the toilet and vomited. When he picked himself up off the floor, he went to his desk and rang the police.
Two months later, his business folded. About a year later, the police had found the ex-employee and filed charges where were eventually pleaded down and she served a suspended twelve month sentence for stealing. Without the necessary business records, it was near impossible to determine how much she had actually stolen. But this business owner had lost nearly everything. Not because he didn’t have a great business – he did. But because he abdicated his authority as a business owner and thought someone else would save him.
Now, if you think I’m trying to scare you – you’re right! Because although this will not will happen to everyone, and generally speaking most people are honest, even at a level where everyone is honest and doing the right things, what happens if your financial controller or book-keeper leaves your business and you have to then find out where things are at financially.
So, in summary, you need to determine who the best person is in your business to take care of your finances. And as outlined in some of our HR audio programs on how to build a team of extraordinary people, you need to clearly outline and define the roles and responsibilities of this person, as well as their key performance indicators, or KPIs – even if they’re external to your business.

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