Do you dread getting on the scales?
Most of us do! The dread may be due to the fact that we don’t like the number that comes up or we don’t understand why it is what it is or what to do about it. We may be trying to lose weight, but the scale is not cooperating, even when we have done our personal best to eat the right food, get rest, and exercise.
As a practicing accountant in private companies, I have found that when I first arrive at a company, the business owners sometimes mirror how I feel about getting on the scales when we review the financial results. Although they may give the talk or appearance that they would like to meet to discuss the financials, when it comes right down to it, they just can’t find the time. What I have come to realize is that while owners may have a passion for the business and spend countless hours to make it run successfully, many still do not understand the financial outcome from their day-to-day operations.
What to do? Well, I have found success in transitioning an owner from avoidance to asking when we can review the numbers by practicing the following:
- Customize info for the owner’s learning style. Determine if they prefer to listen, read, or view pictures such as a chart or some combination. I know it may sound crazy, but it matters! We each have different preferences for communication and individual learning styles—the way we take in information and how we process it.
- Explain cost relationships. Help the owner to understand cost relationships – variable, fixed, mixed cost, and break-even analysis. Knowledge of these relationships and the ability to do “what-ifs” can be so powerfully informative.
- Simplify, simplify, simplify. I can’t say enough about making it simple and efficient. Owners need their financial people to be able to boil the numbers down and explain results in as few words and charts as possible. Less can be more!
- Build trust and credibility. The owner needs to be able to count on you to reliably provide accurate, timely, and unbiased information.
There is a joy in sharing the numbers in a meaningful way that can empower an owner or manager in a manner they have never experienced before. And, as the owners and managers begin to understand and appreciate the numbers more and more in the business, there will be less avoidance of the financials and increasingly much better and quicker decision-making in the day-to-day operations and strategy choices.