Forums: Discussions for entrepreneurs and small business.

To what degree do entrepreneurs struggle with understanding and managing financial and accounting related issues?

To a large degree.

I find a lot of my clients do struggle in this area.

 

Some of it is a mental block on the subject; thinking this is just to complex to ever understand.

 

Part of the problem is that SOME accountants don’t see their role to education their clients.  That is unfortunate.  I have more business that comes in from helping someone set-up their system and then teaching them how to run it without me -- leading to more complex needs latter on vs. taking on a small client and running the accounting for them.  And many of these clients are not just starting out, but include those who find that their accountant is really just providing data entry services.

 

In fact, I feel so strongly about this, I started My Fiscal Office with a core principle that states “We teach you not to depend on us.  Most accountants will provide you with timely and accurate financial information.  At My Fiscal Office, we will coach you to interpret and act on your financial information.”

 

Just today, I am doing two webinars (for another company) on how to produce timely and accurate financial statements AND how to interpret financial statements.

 

My advice is to find an accountant who will explain accounting in English, who is willing to teach you the story behind the numbers and, most importantly, will not put their ability to generate fees from you now ahead of what is in the best interest of your business.

I think to some degree it depends on the individual and their prior finance and successful entrepreneurial background.

On the other hand, finance and accounting when starting up can be very difficult to plan, and can also be difficult during early, post-start up years.

So yes, as craig said, to a large degree. But those with enough experience in the area probably have a decent handle on finance and accounting.



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Motivation for Entrepreneurs
Entre-Propel.com

Completely agree. Creating and developing are two big tasks business owners should concentrate on. And while a business owner doesn`t need to be a master accountant, they should absolutely have a good understanding of finance and accounting in order to make more informed decisions.


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Motivation for Entrepreneurs
Entre-Propel.com

All entrepreneurs should have a good understanding of the finance side of their business. It`s actually quite easy to understand if explained in simple English. However, many entrepreneurs get confused by accounting speak.

Agreed, with accounting & finance for sure, typically other areas as well.  I`ve found startups usually are great at one thing (web dev, sales, marketing) and suck at everything else.  As said above, thus the need for virtual CFO, although also the reason for a well rounded management team.  Also investors typically won`t entertain companies unless they do have a well rounded mgmt team with experience. 

Entrepreneurs aside, MOST people struggle with accounting, try explaining accounting in the corporate world. 



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Rogue CFO
Virtual CFO helping launch startups.
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