Lost in (business) Translation

Quick Insight

Accounting is called the language of business. You must be able to read this language in your financial reports to interpret the implications for your operations and business model. Knowing this language allows you to translate your ideas into the financial analysis required to assess opportunities.

Accounting is called the language of business. You must be able to read this language in your financial reports to interpret the implications for your operations and business model.  You must also translate your ideas into the financial analysis required to assess opportunities. 

What does this look like practically? Understanding the numbers allows you to see challenges and opportunities. Shrinking cash balances could mean reduced efficiency or could be caused by something good like growth. Increased accounts receivable could mean more future cash or future hits to profits from write-offs. Rising cash levels could signal the opportunity to invest for company growth. 

Profitability analysis can show whether raising prices will increase profits or cause a big drop in revenue. Breakeven analysis gives you a better idea of whether new products or locations will make money.

Accounting is a way to understand your company's past and see its future. Lack of accounting knowledge leaves you deaf to the heartbeat of your company and blind to your company’s future.

I wish you the ability to clearly see your challenges and opportunities. I wish you well.

- Rob Stephens

Further Insight

CFO Perspective Resources

  • Video: How to Create a Cash Flow Projection - This video walks you step-by-step on how to create starting from an easy and free template. A cash flow projection can help you identify “cash leaks” that are draining your profits, spot periods of low cash flow before they become a crisis, and know when you have the cash to capture opportunities.
  • Course: Entrepreneurial Finance - Small Business Financial Management Basics - Get a financial overview of the entrepreneurial journey from startup to operational decisions to exit planning. You’ll hear from a business banker guest speaker who explains what lenders look at when deciding whether to make a loan to a small business.
  • Book: Conquering Cash Flow: The Complete Guide to Small Business Cash Flow Management - Learn how to manage your cash better so you can improve your cash flow, increase your profits, grow your business, and reduce your stress. Discover proven methods to conquer your cash flow.

Get all the CFO Perspective resources with a FAST (Finance and Strategy Toolkit) membership.

Get the tools, guidance, and support for superior business performance

Get all the CFO Perspective courses plus more in one package. FAST (Finance and Strategy Toolkit) is the membership program that gives you the resources for better strategic financial management. Get direct access to me as well tools for improved decisions that lead to superior business performance.

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