A LOT with Audra

Ep08
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Audra Dinell: [00:00:00] Hey, happy Monday. Welcome to A Lot With Audra. And today we're going to talk about a topic that I'm so excited about. It's more of a logistical business topic, but it's one that has just brought me so much joy, dare I say, having this information, gaining this knowledge, strengthening this skill. And it's one that's so important.

As entrepreneurs and one that I've been told is so important, but until it clicked for me, it just felt so overwhelming. I'm going to be honest. It felt like a lot, [00:01:00] but no longer. And I'm excited to bring what I have learned to you today for this conversation about how I increased my financial acumen in my business as a small business owner.

So I have to start by admitting two things. Number one, I put my pants on backwards today. I literally just figured it out as I use the restroom before this podcast, I put my pants on backwards today and I went all about my life and had meetings in public. So there's that.

Admission number two, Last year during tax season, I legit cried in my CPA's office. And I didn't cry because of anything being wrong per se. I cried because I [00:02:00] felt so desperate to know more about my business, to have solid answers to the questions I was being asked. And it felt really overwhelming and messy to me.

And I didn't have. The acumen that I wanted to have. Fast forward to this year and I'm going to go through the whole process of how this came to be over the last year. Because if you're anything like me, like I would listen to these podcasts as I was trying to learn and grow my business financial acumen.

And I'll fast forward to this year and this year my taxes already submitted. They're extremely organized. I hope I get a gold star from my accountant. It just is a different feeling. This year. And I think that's really what I was going for. When you've set a goal based on an issue, like I don't want to cry in my accountant's office anymore, unless it's tears of [00:03:00] joy.

And so I set this goal, if you will, of like, I want to increase my business financial acumen this year. Next year, I want to know my numbers. We have always been told in business, whether you own a business or help run a business, know your numbers, know your numbers. And I have tried so hard over the year to know my numbers.

If you're in sales, you've got to know your numbers. But this year for me running a small business was the year that it really clicked. So let me back up. When I started my business in 2020, the very first hire, the very first expense, I invested in was a bookkeeper. I knew right away this was not an area of strength for me and I knew I would need some support and I wanted it quick.

I didn't want things to start out messy. I wanted it to be as clean as possible. So, right as I was taking my first checks. I hired a bookkeeper and I loved that [00:04:00] bookkeeper. She is a wonderful person and I had so much fun with her and she helped me so much over the years in so many ways. She would sit and explain things to me.

She would rework things for me so that I could see them in a way I understood. And then I heard at one of our workshops for my business, a business owner who had been in business for 20 years. Six months after the workshop, she sold her business successfully. I heard her say that the numbers didn't really start clicking for her until she took over her books.

And I thought, no way, there's no way I could ever do that. Not only is it not my skill set, but it's not my highest use of my time. And so many people would agree with that, but hearing that from her planted something in me, she [00:05:00] talked about how once she was in her numbers daily and the one who was managing her backend, she started to understand her numbers and see which lever she could pull to do which things, you know, this ultimately led to her being able to sell her business after 20 years.

And so it planted a seed in me and it did take, at least 18 months for that seed to sprout into anything. But when I was sitting there last year in my accountant's office crying with overwhelm, I knew something had to change. So I've mentioned this on a previous episode, but one of the first things I did was interview several different people.

In this realm, being a person who my experience really was managing our personal family budget. That's my financial experience. I, I worked at a credit union in college. I started my career out in the insurance industry. [00:06:00] I did marketing for an accounting firm. So I feel like I had been around money people, but I had never been the one whose job was to focus on the finances.

And so my base was really just that, managing the personal finances for my family, I had a lot to learn and I didn't even know what I needed because this world was so overwhelming to me. I'd used QuickBooks from the beginning. My team had implemented a different card processing, payment processing system along the way for other reasons.

I, you know, filed my taxes every year, of course, but I had so much to learn. I didn't even know what I was looking for. So what did I do? I started interviewing. I started interviewing different types of financial professionals financial planners, CPAs, [00:07:00] Bookkeepers financial professionals that were in between a bookkeeper and a CPA.

I don't even still know, you know, the right term to call them. But the point is I just kept going back to the drawing board until I found something that fit. And I found that fit. I found the fit in a business owner who had been there, done that, that was teaching other business owners how to manage their finances.

And I said, you're speaking my language. You have experience. Let's do this. This is a first step. So I worked with this team and they are an amazing team. I'd love to have them on the podcast someday, but I worked with them. We started, I believe in April of last year, and I am still meeting with them this week, but we did kind of an eight week intensive training where I learned.

Everything that I needed to learn about my back end of my business finances. And it was a rough process. They made it easy, but really [00:08:00] just the emotions of really wanting to get something right and not knowing what you don't know and not even knowing what questions to ask and things not making sense.

I use this back in the marketing world, but I always feel excited at the beginning of a relationship or a project Such as this one and then somewhere in the middle The project is just this like big tangled ball of yarn Like we're excited to take on the sewing project And then we're handed this big tangled up ball of yarn and we're pulling it strings and we're pulling it threads And we're just trying to figure out The right next step, but it's hard in that messy middle Until you find the string that you can pull that starts to untangle the knot.

And that's what I feel like this team did with me. They sat with me. They helped me with my back end. They answered all my questions. They answered them [00:09:00] again. I took notes. They made notes. And we came up with this process and I wanted to share my team's monthly process with you because we have been using it now for a solid six months and we are on it, and it feels so good every single month.

So this is the nitty gritty details, right, of running a business. But this is, my true story of how I grew my financial acumen. So what my team does every month is we make sure by the fifth of the month, all of our transactions are categorized. We know the person that's responsible for that.

Then on the 10th of every month, we make sure that the last month is reconciled. What this includes is pulling our different bank accounts, our credit card, and making sure that everything is reconciled. As well as it can be for the month that we're looking at. And then we bring this information to a monthly finance meeting.

So we sit down as a team and the first [00:10:00] thing we do is manage any checks that we have. We secondly, talk about any discrepancies or unclear transactions. So we have a little category if the person on my team who is categorizing things doesn't know where something goes. She has a little category that she pops it in and then her and I get to go through that whole list that she has questions on and decide where things should be categorized. We ensure as a third step, all of our receipts are accounted for and properly documented for us. We have a Google folder that everything is in. And then we talk about any open invoices that we might need to check on. At that point, we start to pull the budget.

So every month to our finance meeting, I print off this. SOP, the standard operating process that has this list that I'm literally reading from right now so that I can tell you step by step what we do, that we created custom for our business with this team that we [00:11:00] worked with to increase our business financial acumen and learn how to do the books ourselves.

So part of what we'll do here is we'll pull our customized budget report that we created. We'll pull our P& L, we'll pull our balance sheet, and then we'll go through and we'll look at all of our net income, our net expenses. We'll compare the actuals that we have had year to date to the budget. We'll talk about anything that's upcoming, any upcoming expenses, and discuss any unpaid payments and their potential impact on our budget.

We'll also take this time to discuss different special budgets that we have, maybe like for an event or a special project if needed. So every single month, this is our process. We print off the documents, we get together, we have the 5th of the month where everything's categorized, the 10th where everything's reconciled.

We [00:12:00] do touch base on a yearly basis as well to plan for the next year. We didn't see a need in our business to have an extra meeting quarterly to talk about the books since we meet monthly. And then at the end, after we've done all that, we have any areas that we want to review, like are there any transactions where there were discrepancies how's cashflow looking for the month?

And we can always fall back on this team that we work with to answer questions. So going through this process, you know, starting in April, ending probably in June, I guess it was, where it was a lot of learning, a lot of overwhelm, the light clicking, and then our team being able to run with it, knowing that we have, this other team in our back pocket, if we have questions, and as we grow, It has been such a game changer.

It's taken me from crying in my accountant's office to the next and [00:13:00] final step I wanted to share with you, which was finding the right CPA for me. So I have used a couple of different CPAs over the years and enjoy all of them personally. But I needed to find the right fit for me. And for me, I cared about someone who was going to get excited about my numbers like I was.

I cared about someone who shared my vision for growth. I cared about someone who would explain the why to me. I'm a person who really wants to know the why I don't need to know all the details of the why, but I want to know the why, like, why are we doing it this way? I want to talk about if it makes sense.

I really needed someone who I could dialogue back and forth with so that they could help me change my perspective if needed or explain things to me in a way I can understand. Like, I'm not afraid to ask the same question in multiple ways. Different times, I'm not afraid to say, I know you just spent [00:14:00] several minutes explaining that to me, but I still don't understand.

Help me understand, say it in a different way. And so that's really the last piece is my books have always been pretty organized, but I took the plunge and started to put my hands in the books and you know, really what that did for me in addition to finding the right CPA. Who totally complimented me.

That was the coolest moment. I left the CPA's office and I was like, I found the right person. I found the right tax partner, the right business financial planner for me. And he complimented me on how well I knew my numbers. So I got to call my team and say, y'all, this worked. I got to call the team that I worked with to help me get there.

And I said, y'all, this worked. Thank you so much for just. wading through the deep end with me. I know there's always going to be something new to learn. [00:15:00] I never want to go into the world of finance. Like that's, that's not my thing, but like knowing my numbers has helped me feel so empowered.

That's really the word I would use to describe how I feel. I feel in control of my business finances there. It's not controlling me. It doesn't wake me up at night, you know, in the past when it has been vague and fuzzy. And I felt like I had to rely on someone else to tell me the answers. It would be a point of anxiety for me, right?

I'd wake up in the middle of the night with a random question. And now I feel like I've built this team of people. Who can support me, but I'm also on the bench. And before I think I was more on the sidelines, you know, just kind of like, all right, you're the pros. You do the thing. Just make sure I'm in compliance and I'm doing all the right things that I can pay everyone.[00:16:00]

And now, you know, I'm in the game too. I'm a part of that team and I've brought my team into that as well, right? So, we're pretty transparent about finances here in my small business. And I know one of the benefits of working with me is that transparency for these other women who are also entrepreneurs and running their own business.

But I've brought my team in, I've gotten in the game and I've found the right professionals to help me. So I know this is a different type of episode. It's definitely one that's very specific, but I just want to encourage you if you are like me, like I have been where it's like, man, you didn't go into business because the finances excited you, right?

You went into business because you had a great idea or you're passionate about your product or service or You have a heart for the people that you're serving. There's all of these wonderful reasons [00:17:00] why people generally go into business. And it's usually not to manage their own books, but this has just been a stepping stone for me, a little confidence piece as an entrepreneur that I don't know everything.

I need my team on my whole bench. I need my whole bench to help me out. But I feel confident that I have a foundation for the first time, and I can see when something's on or off. Like we've all heard those stories of you know, business owners kind of getting taken advantage of because they don't know enough to know when they are.

And I was definitely not in that kind of situation at all. But for me, it was really important to be able to, to do it myself. Now, will I always do it myself? I don't know the answer to that question, but I know it was important to me to have the acumen to be able to do it. And that has really made all the difference.

So I hope if you're a business owner and you're coming up on tax season and you're like I was last year crying in your [00:18:00] CPA's office, you don't have to do it alone. If you reach out to me, I'd love to share my resources. Like I said, I'd love to have the team on the podcast one day. That's not the only work they do.

So, I'd have to ask their permission first, but this is an important piece. And I had been told over the years how important it was to know your numbers. But until I actually started to really know my numbers, and for me, that meant having to be hands on, and for me, that meant having to find the right people for me to help me in the ways I needed.

It makes such a difference in the excitement I have for my business, the confidence I have as a business owner, the opportunities I see. When I read the book earlier this year, 80 20, that I'd mentioned, it was just like so clear to me what My 20 percent of business is that is bringing in 80 percent of my profits.[00:19:00]

And I don't think if I would be as sturdy as I am in my financial acumen right now, that I would have been able to see it so clearly, but it changed the way I operate in my day to day, knowing my 80 20. And again, I couldn't have seen my 80 20 without knowing my finances. So just a little encouragement.

If you're not there yet, keep working. This took me a good four and a half years to get to this place where I'm really excited and confident in my quarterly tax meetings that, you know, I have on the books are some of my favorite meetings. My meetings with my CPA now are some of my absolute favorite meetings.

I leave those meetings jazzed up and energized. And I feel like that's the way I want it to be. So hope this is encouraging. It is a lot in the details. Thank you for listening. Doing something like increasing your business financial acumen is a lot, but we can do it. We can do it with the right resources.

So I hope this podcast was interesting and helpful. If you're interested more in our [00:20:00] SOP or process, I'd be happy to share, just connect with me on Instagram, or you can find my email on our website, the thread wlc. com. And I will see you next week.