Edmonton Business Consultant | Real Entrepreneurs Schedule Financial Statement Review
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People who don’t put a time and date on when they’re actually going to do it. Just never do it. Yeah, I can see why with the two, I can be you ever because it’s not. Hi, thanks for tuning in for another episode of ask Sperl CPA today is the Edmonton business consultant. We’re talking about how real entrepreneurs scheduled their financial statement review. Again, as the business consultant, we’re talking about how real entrepreneurs schedule their financial statement review. I have may here with me today. Um, may, have you seen some of the, the monthly financial statement meetings so far? Yes. Yeah. And have you noticed the trend? No. The successful ones are buying you. They always show up and, oh yeah. Some people are always putting out fires all the time. You can tell who is really committed to improving their business to not only like looking at the numbers, but also finding out how to improve those numbers as they go. So yeah, that really makes them different from others. Cool. Yeah, for sure.
Quote that we have here today. It’s a Jim Collins quote, you know, author of six books, business books, including, you know, one of my favorites, good to great. And he says, you must maintain unwavering faith that you can and will prevail in the end regardless of the difficulties. And at the same time had the discipline to confront the most brutal facts of your current reality, whatever they may be. Um, you know, financial statements. Sometimes people don’t want to look at them because they know it doesn’t look good. Um, and the statistic that we have are 50% of all Canadian businesses, they’ll go out of business in the first five years and 29% of these failed businesses will list running out of cash is one of the primary reasons for their failure making running out of cash. The second most common reason for business failure and the story that we see time and time again is business owners. They just don’t realize how high they should rank and reviewing their financial statements in terms of all the other normal responsibilities that they have as a business owner. So, mate, what are the questions that you think these business owners should be asking? They should ask, but should rookie entrepreneurs with you their financials every two weeks with payroll?
Yeah, I think so. When you’re first starting out, rookie entrepreneurs, you know, they can’t delegate this task. They need to be reviewing your financials every two weeks. Uh, and, and why I do it every two weeks recommend every two weeks is that’s when they run payroll. There’s no point of looking at it midweek before the payroll. Let’s say, you know, once we pay the staff, what do we have leftover, what are the numbers look like after we pay the staff? Let’s not look at it. You know, mid week after we’ve collected, you know, after one week you collected a bunch of receivables and things are looking good. Once all that money goes out, hopefully we have enough to cover payroll. Um, but once all that money goes out, what does the financial state, you know, situation look like? Um, I think that’s the time period that most, you know, early stage entrepreneurs, they really should be, you know, reviewing their financial statements every two weeks when they run that payroll. Uh, you know, in get a new kind of state of affairs at that time and should experience entrepreneurs reviewed their financials monthly. Please give us a call now if you need the top Edmonton Business Consultant today!
Yeah. So even if you got this under control, a lot of experienced entrepreneurs, they have someone in their office who can review the, you know, the financial situation on a biweekly basis. You know, make sure the the payroll is correct, make sure all the payables are going out the right way and make sure that people who are getting paid are supposed to be getting paid at the correct amounts and make sure the people that we are paying deserve to be paid because they’ve completed their contracts are done the hours that they said they have. Um, but even if you have that in place, experienced entrepreneurs, they still need to be rude, their financial statements monthly because this is the report card. This tells us how we’re doing. This tells us, you know, are the decisions that we’re making, are they effective? Are they ineffective? What changes should I be making next month? You know, what little tweaks should I be making next month? Um, it doesn’t matter. I, I think if you’ve been doing it for a year or 10 years and you need to be reviewing your financial statements, is the owner monthly? Will the financial statement review get done? If it’s not scheduled, as a Edmonton Business Consultant today!
my experience is this never gets done. If it is not schedule, almost like anything else in life or in business. If you don’t, you know what gets scheduled gets done. And people who don’t put a time and date on when they’re actually going to do it, just never do it. So financial statement review is, is no different. It’s not I’m going to do it when I have a chance one day. Um, you know, it’s simply not going to get done. And not only what Nakita you gotta think there’s a certain time when it makes more sense to review the financial statements, right? Like it makes sense to read the financial statements with the payroll because that determines, you know, how you’re doing uptodate that time or it makes sense to review your financial statements after the previous month has been locked off or completed and all the reconciliations for the prior month are closed off. It makes sense to review it at that time. Um, so I thought that it just won’t get done, but there’s at some points where the financial statements, depending on the workflow of the accounting system, you know, they, they might not, you know, they might be a little bit out of date or not quite ready yet. So she, you should have a schedule when things get done and when you review them, do unsuccessful entrepreneurs break these appointments to chase new deals? Yeah. Here it is. They think, oh, I gotta chase the new deal. This is the right thing to do. The customer’s always right there. I got to go and find that deal. Um, that’s the thing, you know, it’s one of the common things that they’re probably, uh, falsely, if they just developed that whole internal hierarchy and they think that that ranks higher, that they should chase the new deal before they review their financial statements. Um, that would be probably one of the, you know, the common characteristics of unsuccessful entrepreneurs is they, is they, uh, you know, break that appointment to review their financial statements to chase a new deal. Please give us a call now at 780-665-4949 as soon as you can! Also please check out spurrell.ca to get the best services ever single time!
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So does this almost always result in unsustainable margins? Yeah. So the same entrepreneur was chasing new deal, doesn’t realize because they didn’t review their financials, the new deal that they were chasing, you know, was unsustainable. The margin, the amount of profit they were going to make on it, they shouldn’t have done the job to begin with because they’re gonna lose money off that job. And this is not sustainable. But so they can’t even, you know, go to that customer or potential customer and give them a price of what they should be doing because they don’t know how they did on the last jobs yet. Um, they don’t know where they are at all. So it doesn’t really make any sense to chase that new job when you’re not even in a position that you can price it yet. Um, but they just think that, oh, I obviously more work is better than no more work. But that’s not always the case. You know, there’s a lot of jobs and a lot of projects and a lot of businesses that, you know, we do that put us further back. They don’t move us further ahead and you know, and actually makes it more difficult. Call now if you wan top Edmonton Business Consultant today!
Hmm. Do unsuccessful entrepreneurs break these appointments for burning fires? Yeah. So it’s always, you only didn’t want to chase new customers or they have a burning fire. Something happened on a job site. Something happened at the production plant. We had a big HR issue. Um, you know, there’s always a burning fire and they’re always going to, you know, uh, break their financial statement, review appointment to put out that burning fire. It’s just like common characteristic we see between, you know, if we’re, if we’re looking at people, you know, it doesn’t work out for them. Unsuccessful entrepreneurs, they always have that burning fire that somehow they’ve just ranked it higher, um, in their belief system than reviewing the financial statements, which is, um, you know, oddly enough, it’s a misnomer really. They need your do those financial statements. And why does reviewing the numbers first help you address the burning fires? So, yeah. Yeah. So you want to address the burning fire, you know, it’s, you know, really important. But at the same time, what options do I have to address the burning fire, let’s say if it’s an HR issue and everyone is, you know, the, you need more people or you need to buy a new piece of equipment or a quick piece of equipment breaks down and you don’t know what to do with it. Well, in order to make that decision and actually address it, wouldn’t it be beneficial to know how much cash you have at your disposal? Um, so they go and review that, you know, that broken piece of equipment or you know, our costs overrun on a job site, but they don’t know if that’s a, you know, a catastrophe or they don’t know if that’s something that they have the funds available to rectify that problem easily. So it doesn’t really make sense to address the burning fires without looking at the financials, which really tell you, you know, what options we have at our disposal to solve that issue. Contact us now if you are ready for the best Edmonton Business Consultant!
And when owners come to discuss burning fires, do you look at the numbers first? Yeah. So even when they come to us, a lot of times they want to come to us and you know, they have their monthly meeting and our job is we have to focus them. They’re really intent on talking about this issue and what’s adding staff, laying staff off, buying equipment, selling equipment, refinancing, buying a building, you know, these big burning fire issues. And you know, we, we have to say that we want to solve that and I want to solve it, but let’s look at the numbers first because we’re all going to just make better decisions once we look at those numbers. So even the, the numbers, they seem disconnected like reviewing this income statement and balance sheet. How does this help me with my HR issue? Well, this is basically the guidelines of what you have at your disposal to solve that HR issue. Do entrepreneurs who mess financial statements with you appointments fail often? They do. They do. It’s like the common characteristic. We see it over and over again and you know, it’s, it’s not that our feelings are hurt so much that they missed an appointment. I mean, a lot of times be old people miss an appointment, a five o’clock appointment with me. It means I’m going home early that day. Um, you know, it’s, it’s, it’s not a big deal to us. We’re in the big deal to us. We know that behavior over time, they’re just not going to make the same decisions because they’re usually missing those appointments to chase new work and they’re not quite certain on how much they’re making on the existing work or to put out fires and they don’t actually know what resources they have at their disposal to solve those issues effectively. And we just see over and over again that the people who miss the appointments, they schedule that time to review the financial information and they don’t attend those appointments.
They just fail at an extraordinarily high rate compared to the ones that show up. How far will successful entrepreneurs go to ensure they review the financials? Yeah, so the successful entrepreneurs have probably, a lot of them have gone to like the other extreme. Like they just, they will not miss that financial statement review meeting if their life depends on it. They will call you, um, from a bulk in the middle of the ocean because they, and log in online to see the numbers because they want to see it. Um, they’ll call you from the hospital, they’ll call you from vacation. They’ll come in when they’re sick. Um, you know, the, the literally come in and, you know, telling a crazy story about how the job site is falling down and, you know, fire started on the job site or a piece of equipment just crashed into each other.
But they’re reviewing their numbers because they know they actually can’t even solve the problem or make decisions until they review the numbers. So they go to incredible lengths we found to do attend these meetings. And yet you have the other meetings and it sounds logical. It’s like, I can’t come because there was a literal fire happened on the job site. Um, and, but this successful entrepreneur and be like, yeah, there was a fire. We call the fire depart. Let’s see what our numbers are. It feels weird, but they need to know because that’s what’s going to help them make the decision, uh, to get them out of that jam. Uh, it’s, it’s not, you know, it, we’re, rather than the unsuccessful entrepreneurs think, thinks it’s just delaying, um, you know, the, uh, decision, the successful entrepreneur knows that that’s actually going to help them make a better decision so they actually truly solve the problem. Um, so I think that’s what we have here today. Thanks so much for joining us. Check out these guys for the top Edmonton Business Consultant! As always, hit the likened subscribe button so we can continue to deliver you tips on how to beat the odds at business. And as always, you know, we look forward to any comments that you have so we can respond back. And, uh, usually an interview your input for future videos. Thanks very much and please make a stop over to spurrell.ca or give us a call now at 780-665-4949 as soon as you can!