company have a formally trained financial analyst? Of course not.
But all the Fortune 1000 do as
part of their Corporate Strategist team! Do you wonder why they
companies have is their CPA to ask questions regarding their
numbers. But CPAs don't know.
CPAs are not formally trained
They make their money by
having the government make our tax rules overly complicated.
They spend their time pouring over these overly complicated tax rules
that keep us in the dark and dependent on them.
won't structure your financials so that you can understand their simplicity.
Even if they knew how which is
doubtful (I've never met one yet in all these years), they
won't. They need to keep you in the dark regarding your
financial structure so that they can make money out of you.
the net result is that when I walk into a business in trouble they
can't read their accounting reports!
It makes no sense to
That's because their
accounting and financial reporting are not structured properly! And
this is just the beginning of being in financial control!
example of the mess CPAs make.
I remember a client of mine
that, at $400,000/year Gross Sales, was profitable but at
$1,000,000/year Gross Sales was going bankrupt. As usual I ask
for his financial reports. And then I asked him if he
understood it and to explain it to me. At this point he (and
all business owners) got angry and embarrassed and asked me to
explain it to him. I told him that he was right. Even I
can't understand it and I have a Master's Degree in Finance!
wrong with this picture?
Well we went to the CPA that
prepared all of his financials and I angrily asked him why he was
giving my client a bunch of nothing! The CPA, shocked by the
intensity of my anger (hey, my client was going to lose his home!)
blurted out that he had patterned the Income Statement after the Tax Return.
God. I finally figured out why all the accounting reports
structured by a CPA are useless!
I finally found out why all of
the clients I had been visiting for years had unreadable
financials. Their CPAs were making it easy for themselves to
have a low paid clerk fill out the Tax Return by making the Income
Statement look almost like the Tax Return. That way the low
paid clerk only had to move the accounting categories into the same
categories in the Tax Return! They had no problem having their
business client not be able to understand the financial
reporting! Actually, that's a good thing for a CPA since he can
maintain control over his client!
never found a good CPA able or willing to help their client.
In any case since CPAs haven't
the slightest clue how to sell or create a sales process, all their
advise has to do with 'creating deductions' and deductions never made
anyone rich. So much for CPAs.
one is to get the accounting reporting to the point where the
business owner or his child can read it! It needs to make sense!
importantly you need custom metrics in your business.
GAUGES are the custom metrics in your business.
Of course we have the standard
reports from you accounting which we need to fix so they're readable.
beyond that you need measures that show you what the company is
If you were in manufacturing,
you might need some kind of measure of your future orders versus your
current sales. You certainly need measures of sales to phone
calls for each of your phone sales people if you were
telemarketing. And it goes on and on.
we can keep this to 5 measures so that we don't get blinded by excess data.
These are the measures that,
if they meet the budgeted expectations, your company will be just
fine. They are called the decision
because if these numbers vary beyond a certain pre-determined range,
we need to make the decision to see what is wrong in the company.
companies are different in this regard.
In a race car you always have
GAUGES and different cars have different GAUGES. Sure, they
have the standard speedometer and tachometer but beyond that it all
depends. Some need turbo temperature GAUGES and others do not
since they don't have a turbo.
Similarly each business needs
create these CUSTOM GAUGES for you and teach you how to use them
because without them you are flying in the dark!