Financial intelligence is a requirement for business owners and luckily, it’s a skill that can be learned. As a business owner, you need to make sure you’re acquiring these skills to be able to really work on your business and grow your business.

Financial intelligence consists of understanding these four different areas:

• Basics of financial measurement, including the big three reports you need to run your business: the income statement, balance sheet, and statement of cash flows.
• Finance and accounting as two disciplines (both art and science!) that must come together and build an understanding of your business.
• The analysis of your numbers (including profitability, percentages, and other metrics) so you understand the story they’re telling you.
• The big picture, where you can zoom out, see relationships and patterns, and understand your business in the larger context of the economy, competitive landscape, laws, technology, and changing consumer needs and desires.

All four of these shape the environment of financial intelligence and when you understand them, you can make more insightful decisions towards the goals and targets of your strategic plan, leading your company forward successfully.

Owning your numbers means that your transactions are entered into your system in real time. It’s not taking a shoe box and giving it to your outside accountant to update your Quickbooks.

Why?

Because if you’re not getting anything in real time, you don’t have your basic reports available to you in a timely fashion. There’s no visibility to where you’re performing, because those numbers aren’t timely. You can’t really own your numbers because you can’t see them as frequently as you need to be able to make decisions in your business.

Remember, the foundational elements of financial intelligence require you to have those big three reports. In order to have those generated from your software, you need to have transactions going in on a daily basis.

It doesn’t matter whether you have someone do it internally or if you outsource, as long as it’s done in a timely fashion every day to get you the insight you need to take your business forward. Once a week isn’t good enough.

When you own your numbers, your company’s financial status is available to you on demand.

And remember: garbage in, garbage out. If your transactions are recorded incorrectly, your reports are going to be useless. If that’s something you’re struggling with, call TurboExecs – we help people uplevel their entire accounting function.

Honestly, the bottom line for owning your numbers is about being able to take control of your own destiny. Don’t leave that in someone else’s hands. Once you give away your power in that way, you’ve given away your ability to impact your numbers. So do yourself a favor within the realm of financial intelligence: take control of your destiny by owning your numbers.

What constitutes doing well (and not doing well) in your business?

There are a lot of numbers floating around your business, but how do you discern what’s good and what’s not? How do you know you’re headed in the right or wrong direction?

Part of owning your numbers is having your financial reports available to you on demand, and that translates right into understanding your numbers. If you have analytical horsepower within your financial function (something we offer at TurboExecs), you have a person who can give you the answers to your “why” questions about your numbers. They can explain why your numbers are so low or so high, why numbers have changed against trends and benchmarks, etc.

As the business owner, you just need to keep asking those questions. That’s how you drill down and understand what the drivers are for your performance and operations.

The numbers tell a story about your business. It’s up to you as the business owner to understand that story and change the trajectory of it as needed. You can do that when you’re able to look at the trends and the numbers versus various benchmarks.