Financial Accountability is Your Roadmap to Sustainable Business Growth
Action springs not from thought, but from a readiness for responsibility. – Dietrich Bonhoeffer
These words resonate deeply with the essence of financial accountability, a subject that often gets side-lined in the hustle of running a business.
But what if I told you that the art of being financially accountable can help steer you not just towards survival but to true business success?
This episode is all about dissecting the backbone of financial accountability and helping you understand how keeping a tight rein on your finances can set you on a clear, effective path to your goals.
We'll delve into why financial accountability matters so much and how you can cultivate it through practical steps and consistent reflection.
If you’ve ever found yourself wondering, "Am I doing enough to manage my business's finances responsibly?" then you’ve found the right episode.
Once you’ve listened, you'll find yourself better prepared to handle the monetary aspects of your business with confidence and precision.
You’ll walk away equipped with actionable tips and strategies that promote financial health and long-term sustainability. The knowledge I'm sharing here is tailored to not only reduce your financial stress but also enhance your decision-making process, ensuring you stay on track even when the unexpected happens.
Just like a diligent navigator, financial accountability keeps you on course and ready for the challenges ahead.
Remember, it’s not about achieving perfection; it’s about making progress.
And as always, Numbers Knowhow is here Helping you to Plan It, Do It, PROFIT.
Transcripts
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Action springs not from thought, but from a readiness for
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responsibility. Dietrich Bonhoeffer's words may not sound like
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your traditional financial advice, but they hold the key to
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today's topic, financial accountability. Now,
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financial accountability isn't just about keeping track of numbers.
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It's about staying on course, adjusting your course when
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necessary, and always aiming for that big goal.
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Your northern star, your end point, your destination. But
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before we get too far ahead, ask yourself this question. Do you
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hold yourself accountable for how you manage your business's finances?
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If you're unsure, or think I could do better, then stick around. I'll be
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sharing why this matters, how to stay accountable, and I'll be sharing practical
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tips to help you along the way.
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But why is financial accountability like a road trip? Well,
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imagine you're planning a road trip. Your destination, let's just say
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Cornwall, for a relaxing seaside break. Summertime,
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obviously. Would you just hop into the car and start driving?
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Of course not. You'd plan your route, check the fuel gauge
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and make sure you've packed the essentials. Running your business without
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financial accountability is like driving without a map.
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You might still end up somewhere, but it probably won't be where you want it
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to go. Worse still, you could run out of fuel for fuel.
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Think cash. Financially speaking, halfway through the journey.
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In business, your financial story plan is your map.
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It lays out the route, your northern star, your ultimate goal, your destination
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point. Whether it's reaching a profit milestone, launching a
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new product or achieving a healthier cash flow, your
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plan outlines how you will get there. Now, your
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financial story plan is also your accountability buddy. Now, here's
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the thing. When we are left our own devices is very
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easy to drift off course. That's why people hire
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personal trainers, to have someone keeping them accountable. And in
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business, your financial story plan acts as your personal trainer.
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It keeps you honest, it keeps you focused, and it keeps you aware of
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the progress that you're making. Now, this plan isn't just a one off
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task, it's a living. It's a breathing document. It
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includes your profit goals, your expected expenses,
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the resources you will need. And it's not just cash, by the way, the
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actions required to meet your targets. But just like a sat nav, it
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only works if you actually use it. You mustn't let your financial
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story gather dust in a drawer or on your computer. Refer
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to it, reference it on a regular basis and check if you're still heading
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in the right direction. Now, every plan needs you to
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monitor, adjust and reflect. Now, supposing what happens if
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you hit Unexpected traffic or a road closure? Do you give up
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on the trip? Of course not. You re route, and business
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is no different. Monitoring your finances allows you to
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adjust when the unexpected happens. Now, here's what you should be
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checking on a regular basis. Are your sales matching your forecasts? Are
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your expenses higher than your plan to be? Is your profit where it should
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be? What does your cash flow look like compared to where you thought
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you would be? Your digital accounting system, by the way, is
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your dashboard? Is your engine? Is your financial
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ecosystem showing you the reality of your business? Just like
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checking your car's speedometer and fuel gauge. And if you're not using a
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digital system yet, folks, then you're missing a trick. Now, for
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me, a financial story plan is like hitting the gym. Let's
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just switch gears for a moment. Think about your fitness goals. Say
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you want to run a 5K in under 30 minutes. You you'd set up a
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training plan. You track your progress, and you reflect on what's
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working. If you're not improving, you'd ask yourself, am I training enough?
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Is my diet supporting my efforts? Am I over training and risking
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injury? And the same principles apply to your financial
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accountability. If your profit margins aren't improving or your
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cash flow feels tight, ask yourself these questions. Are you
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overspending? Are your prices right for your market? Are there
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external factors that have impacted your plan? Are there things that you
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haven't implemented that you said you would do? By reflecting and
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adjusting, you get back on track. And financial accountability isn't
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about beating yourself up when things go wrong, and they will go wrong, but it's
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about learning and improving. There are emotional benefits
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also of accountability. Now there's a surprising benefit.
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Financial accountability does reduce anxiety.
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When you know where your business stands and where it's heading,
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you're less likely to feel overwhelmed. You're less likely to get caught
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out by surprises. It's empowering to see the numbers and say, I know
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what's going on and I can handle it. Even if you do hit a few
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bumps along the way, that's fine. It's okay. Remember,
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progress isn't a straightforward linear progression.
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Sometimes it's two steps forward, one step back. But as long
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as you keep moving towards your goal, you're winning.
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Let's look at some practical tips to stay financially accountable. And let's
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break this down into actionable steps. Number one, create
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your financial story plan. Start with your northern star, your destination
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point, and work backwards. Produce the activity plan
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to get you to that end point and break it down into milestones along
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the way. Small milestones are better than one large,
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humongous milestone. Number two, absolutely critical.
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Use a digital accounting system to take the heavy lifting out of the
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record keeping. It's going to help you track sales
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expenses, your cash flow, give you powerful insights.
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And if you link it up with something as powerful as budget wears, you're
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entering into a changed landscape. Number three,
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review your progress on a regular basis. I suggest at least
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once a month, but key metrics like cash flow might need
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weekly or sometimes daily attention. Number four,
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reflect on deviations, deviations from the plan which are
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either good or not so good. If something's
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off, figure out why is it external factors beyond
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your control, assumptions that you've made that haven't quite
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been correct, things that you haven't yet actioned.
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Number five, celebrate those milestones. Recognizing
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your progress as you go along keeps you motivated even if you're
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not yet at the finish line. Recognizing the achievement of those
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milestones really reinforces and gives you that motivation
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to continue. So what can we say in conclusion? Well, let's wrap this one
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up. Let's remember that financial accountability is about
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owning your journey. It's not about perfection. It's
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about progress. And your financial story plan is your
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guide. Your digital accounting system is your dashboard, and your regular
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reviews are the pit stops that keep you going. What do you think,
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folks? Are you ready to embrace financial accountability? Let me
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know your feedback and questions that could inspire a future
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episode. Until next time, keep your eyes on the road, hands on the
