The Secret To Accounting Is Always Emotional
As entrepreneurs and business owners, there is a lot of push and pull in any given day. A lot of things are vying for our attention, Often the tasks that gets the attention is the one that shouts the loudest. Then it might be the one we like or the one we are good at, this often leaves accounting till last or until it is screaming at you.
I am forever trying to come up with better ways to break down accounting, make it more interesting or answer the age-old question everyone wants to know ‘what price should I charge?’
My answer can come off as being very ‘accountant-ish’ and doesn’t give the questioner the answer they are looking for, despite my ‘best practice’ and explanations. My answer never seems to ‘hit the right spot’ and I am left wondering why.
I want to look at this another way. If I were to break down accounting into 3 different sections:
- Knowledge – How accounting works in your business.
- Format – How accounting is presented
- Emotions – what are our beliefs about money
Most training for accounting centres around knowledge and format and this does work for some people. However, if you have negative internal beliefs about money from childhood this can often manifest itself in your business in later life – ignoring the emotional side of accounting can therefore be disastrous.
Let’s look at the analogy of the 3-legged stool.
If all 3 legs are equal and strong the stool is as sturdy as any other. However, once 1 leg becomes weaker than the other 2, the stool will become unsteady, eventually when you sit on it you will fall.
If you have negative emotions around money it will be impossible for you to tackle knowledge and format without addressing emotions.
When I have asked people, who are struggling with accounting, why they think that is, the most common answers have been:-
“I’m just not good with money.”
Says who? Your family, friend, or teacher? I say, Who Cares! Although some people may seem to have a natural gift for money and finances, the reality is that they probably took the time to study and understand the subject on their own accord. You also have this ability, but it must be exercised.
The danger in believing this is that you stop before you’ve even had a chance to start. With this belief, you’re likely to simply bury your head in the sand and wait until the very last minute to do anything about your accounts. Both expensive and non-value adding to your business.
“I can either make money or do what I love”
You don’t have to choose between making money or pursuing your passion. You can do both. Knowing what we are passionate about is worth pursuing, making money from it, is the dream
However, it does need to be set up like a business. The earlier you get your accounting set up the better it is for your business.
“You have to work (too) hard to get wealthy.”
You don’t get wealthy by working hard (only), you get wealthy by doing the right things. And it all starts with adopting the right mindset towards money.
Understanding how money flows in and out of your business provides you with control. This means understanding how you can creat real and lasting value for others and then offering it for a good price.
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