We hear it all the time from business owners, really it translates to; I don’t understand much about accounting. On the one hand, it is an understandable statement. Business owners get into business because they have a passion for their product or service, not because they took business and accounting classes in school. No one needs an accounting degree to be successful at getting a business up and running.

Easy excuse

But on the other hand, this is really an easy excuse that people use to let themselves off the hook when it comes to understanding their business. We’re all capable of understanding at least some fundamentals, and there are some good reasons to make the effort.

* Information: The right financial reporting can provide valuable insight to help business owners make informed decisions. Equipped with specific data driven facts, business owners can learn to steer the business to smarter growth, more efficient processes and stronger profit margins.
* Solutions: A business will naturally become more complex as it grows, adding products/services, people, space, locations, and equipment. Additionally, there are unexpected ups and downs over time. As complexity grows, and ups and downs occur, profitability and cash flow can suffer if there is no genuine understanding of the finances.
* Communication: Numbers are the language of finance. A firm grasp of the numbers makes for a much smoother conversation with lenders and helps to provide those lenders with a sense of confidence in the business owners ability to continue to run the company profitably.

There is hope

The good news is, a business owner does not require an accounting degree, nor do they have to become an expert in numbers, but here are a few ideas:

* Bring in qualified educated help. It’s tempting to find a cheap work around when a business is on a tight budget, but when it comes to accounting, you often get what you pay for. Hire someone with an accounting degree.
* A good accountant should be able to help explain the basics and answer questions. Spend time asking questions and learning about some best practices to keep informed.
* Part time or fractional help is always a great way to supplement the knowledge and expertise of the full-time team, and at a fraction of the cost.

For more information about Integrated Consulting CFO services, please reach out to Cathy.sedacca@integrated-consulting.net.