Re-Engineering Your Financials to Tell a Story
The Virtual CFO
February 19, 2023
The Mind 🧠 of a CFO
Read time: 1:59 minutes
Welcome to The Mind of a CFO newsletter. The newsletter is designed to help entrepreneurs grow in business 📈, mind 🧠, body 💪, and spirit🧘.
Each quarter we will give our CFO's take on a topic to grow your business profitably.
In addition, each month, we will provide you with two to three things we are listening to 👂, reading📚, or watching 👀 that we believe will help grow an entrepreneur.
CFO’s Take - Re-Engineering Your Financials to Tell a Story
We are going to tell you a secret about your financials. Most of them are designed only for the purpose of creating a tax return. Don’t believe us? Look at the default accounts in popular accounting software programs, like QuickBooks. Only one sales account, one cost of goods sold account, and a dozen or so expense accounts!
How many entrepreneurs only have one product or service they sell? None that we know. Eureka, a tax return only has one line for sales, one line for cost of goods sold, and thirteen lines for expenses.
Think about it; tax preparers are crunched for time. So why would they spend time coaching their clients to create financials that don’t line up with the number one product they sell? Therefore, you probably need to ditch your current financials and re-engineer your financials to tell a story about your company. So, let’s dive into the information your financials should tell you
Five questions you should consider when re-designing your financials:
What services or products are most profitable?
What are your recurring revenues and expenses?
What metrics are you trying to measure?
Who are my top customers and vendors?
Is the overall business profitable?
Click here to continue reading.
Issue Sponsor 😎
FinDaily.io is a financial dashboard tool without the need to remember your login. Instead, a financial digest of your company is delivered to your inbox daily on autopilot. Try a 30-day free trial by clicking the link or image below.
Brain 🧠 Food
📈📚 Most partnerships start with equal ownership because that is the easy route. However, we have rarely seen an equal partnership in the real world. And the equal partnership typically leads to what one entrepreneur coined as a "partner death trap" because one partner usually feels like they are doing more. Avoid the partner death trap by using this recipe for Founders’ pie. Click here to read more.
🧠 🧘 👂 Fan of Stranger Things?! Check out this mind-blowing podcast that includes some real-world examples from Stranger Things. It is hard to put this podcast into words. All we will say is that if anyone we know goes missing, we will be calling a remote viewer after calling the police. Click here to listen.
What did you think of this month's issue?
🔥🔥🔥Fire
🔥Meh
Thanks for reading, The Virtual CFO!
P.S. There are 2 ways to work with us to grow your business profitably.