You don’t need to be a math whiz to master your biz numbers. Here’s why.
How many times have you heard yourself say “I’m just not good with numbers” Or I suck at math? Or I just can’t figure this out. If the answer is, “Too many times to count”. I am here to reassure you that you’re not alone. I have a confession, I myself am no grand master of arithmetic. And yet I am a Certified Bookkeeper, and I love my work. At first, it was really intimidating because as a dyslexic my brain just works differently. My thought processes take different paths. I have had to learn different and new ways to master concepts and often this is a slow process. Yet I persevered and learned and slowly mastered. As with most paths to mastery you pick up a few tools along the way.
One of the greatest insights came once I realized that bookkeeping (mastering your biz numbers) fundamentally is a process of organization. Creating a systematic approach to organizing your finances, your receipts and your income, is the core
It’s is a process, and any process can be learned, applied and reproduced.
Step 1: Record. Make a commitment to attend to your bookkeeping, ideally weekly, (at the least monthly). Keep everything, invoices, receipts, bills, and statements. The receipts become transactions in your accounting software. The funds used to operate your business should remain as separate as possible from your personal funds.
Step 2: Review. Correct any errors (they do happen), check to ensure the amounts are exact and each transaction is posted to the proper account. Review your credit card and bank statement for any bank errors or fraudulent charges. The sooner you find and report a mistake the more likely you are to be reimbursed for the error.
Step 3: Reconcile. Match the transactions to the bank and credit card statements. Now you are ready to prepare your financial reports such as your Income Statement and Balance Sheet.
Step 4: Repeat.
The second most significant insight…is that once you get organized, you can let the accounting software do the heavy lifting. That’s right…let the accounting software
Luca Pacioli - Father of Bookkeeping
Your primary responsibility as the business owner is now to be fastidious about documentation and recordkeeping. After you enter the transactions into your software, the program can then handle all the calculations and balancing.
The only math that requires your attention is if your INCOME is higher than your EXPENSES. If you can achieve this, you have created PROFIT, the holy grail of entrepreneurship.
Profit = Income – Expense
[bctt tweet=”Profit is how you support yourself and is how you bring your vision to fruition.”]
If you want to know if your business is profitable, you first need to be organized. It’s 3 steps, completed weekly, and you can learn and apply them.
So what might stop you? Take a moment to reflect on this. What do you notice? Write down any possible blocks that arise. Now ask yourself how you can overcome these objections. Post your insights in the comments.