Finance meetings every month?? What would we talk about??March 28, 2010
I was having a frank conversation with a prospect the other day. He loved our business model, especially the concept of having someone take more than an accountant or bookkeeper’s interest in his business. He loved that there would be another person looking at his financials, his marketing activities, and his human resource management. He loved that he would have someone available so that he could just pick up the phone and ask a financial question.
His biggest concern, though, was that we require monthly meetings. “What on earth would we talk about every month?” I hope I didn’t offend him when I laughed.
What was so funny? He just filed bankruptcy on his last rather large business. And not to be outdone, it was a rather spectacular bankruptcy. Of course, it’s not funny that he had to file bankruptcy. I’m certain that for most, bankruptcy is a devastating financial and emotional experience. But it is funny that he didn’t see the correlation between that business’ downward spiral and how it might have looked different if he had hired us four years ago.
Businesses are closing down for a lot of reasons right now. The economy is certainly one of them, but it’s the rare business that can say 100% of the reason lies with the economy. If you have had a financial person watching your back, they’ve steered you to put aside reserves, to lay off employees, to trim the fat, to raise your prices, to market more, not less, and most importantly, to not leverage your business to the point of no return.
If you’re talking to your accountant once a year, or once a quarter, that’s not enough. They are seeing what is happening to your business, but they probably aren’t helping you make better decisions. Ask them what it would look like if they talked to you more frequently.
Bankruptcy is expensive; monthly financial meetings, priceless.