4 Ways To Overcome Your Fear of Numbers08th June 2016
Your monthly management accounts land on your desk.
You know that you really should give it your full attention. But the thought of having to wade through those numbers makes your heart sink.
You put the document right at the top of your inbox, where you can’t possibly miss it.
“I’ll read it carefully this evening,” you promise yourself silently – just as you did last month, and the month before that. This time, though, you really mean it.
For a couple of days it sits on the pile, making you feel guilty every time you look in that direction.
Then, mercifully, it gradually gets covered up with newer documents. By the end of the week, it’s faded out of view. You’re off the hook…. For another month, at least.
If you ever feel that way about the numbers in your business, you’re not alone.
Time and time again I meet business owners who studiously avoid reading any of their financial reports.
When I ask about their accounts, they tell me, “I don’t handle those”.
They are often brilliant businesspeople. They’re “just not good with numbers”. The figures either hold no interest for them or seem tedious, especially if the business is growing nicely (as far as they can tell…..).
Often, they’re embarrassed and pressured because they don’t understand what the spreadsheet is telling them. It’s easier to leave it to others.
Sometimes it’s a fear of finding something that might worry them.
All of these are legitimate and understandable. The bottom line, though, is that ignoring your numbers is dangerous for your business.
A CEO who doesn’t know what’s in his or her accounts is like a captain who’s frightened of looking out of the window. There might be a great big iceberg just waiting to smash their ship to oblivion – which they could avoid, if only they saw it in time - but how would they ever know?
If that describes you, here are four things your bookkeeper, accountant or team can do to make your financial reports easier to digest:
1. Present them visually. If you can’t make head or tail of the numbers, ask your accounting team to present them as a graph, pie chart or whatever form is appropriate. Many people absorb information quicker this way.
2. Summarise. Ask for an executive summary of just a few key numbers, in a cover sheet. That way you get the information you really need without having to wade through figures that make your head spin. If you have any questions, you can always delve down into more detail.
3. Focus on what’s important. Think about three to four numbers that are problem areas for your business – and get special reports on those. Is cash an issue? Ask for regular updates on who owes you money. If margins are vital, make sure you have these.
4. Ask advice. You’ve hired your accountants for a reason. Mine their expertise. Ask them to explain the figures to you rather than just dumping them in your lap.
You don’t have to become a financial expert overnight (or at all….). But you must help yourself become familiar with at least the basic numbers in your business.
To do otherwise represents unacceptable risk. Ignorance can be bliss, but it can also be fatal.
And let’s be honest. Imagine that next month, your management accounts land on your desk. Instead of spending two days ducking the issue, you simply read a summary and get on with your day.
Wouldn’t that be a relief?
Garry Mumford is author of the free guide, The 5-Step Process To Get Your Customers to Pay on Time, Every Time. He is founder and Director of Insight Associates, which since 1992 has been providing owner managed businesses with the financial insight essential for development and growth.