Accounting for Your Business

The most recent session of our Business Mastery Program went deeper into Accounting for your Business as part of Module 6 on Financial Management. Here is what we touched on from my notes during our session:

• Why you’re not meant to be an accountant – but what you ARE meant to be able to do
• What every business owner needs to ask their accountant
• How often you should be viewing your financial statements
• When your financial reports should be available to you – and how
• How “Managerial Accounting” will help your business
• Which financial “norms” vary by industry
• How to handle larger expenses that are out of budget
• What the point of a profit making business really is
• What the clear financial indicators are of poor management
• The incorrect financials in smaller businesses that most accountants don’t even notice
• The differences between cash based accounting and accrual based accounting
• How your 4 key financial documents in a business relate and impact each other
• Who should be doing the books in your business
• How to unburden yourself from payroll liability for mistakes or tax penalties
• Your Profit and Loss (P&L) statement, section by section
• How one business reduced their work force from 125 employees to 40, and saw an increase in production, quality, efficiency, and profitability
• What Cost of Goods Sold (CoGS) is – and is not – and how to categorize expenses correctly
• What depreciation is and where it shows up in your financials
• Which expenses you want to minimize
• What “Add backs” are, how to keep them from getting out of hand, and when you shouldn’t have them
• How to improve profits through cost reduction – and which costs you should never skimp on
• The wildly negative effects of discounting, simplified – and how discounting destroys your Net Profit and Total Owner Benefit
• Why the average sales person in America will offer a discount before even being asked
• How to get even more urgency than discounting – without discounting your prices
• When (and how) to increase prices – and when not to
• How inflation is costing you more – until you increase your prices

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