For months now, I have been assisting a client in cleaning up their financial statements. They had a bookkeeper who just did not do a very good job and to our luck she quit! They now have a bookkeeper who, although is inexperienced, has a great attitude and is willing to learn. The previous financial statements were full of issues and errors that even we were unaware of until we were really able to dig into them. We are working on getting the standards set so that we can also determine the accuracy of the costing model. A few years ago we were able to develop a model that was perfect for this client. We were able to show him that many of the customers he previously perceived to be his winners were in fact not the case. By making his losers more profitable we made his whole business more profitable. Unfortunately, the previous bookkeeper had allowed our success go to the way side even though we had warned the client there was only so much we could do. The exciting thing now is that the numbers are coming together and are more accurate than ever.
Have you ever heard that old saying “can’t see the forest for the trees? Well, I think that rings true here. For a few years, this company had accounts that were classified incorrectly with expenses and income applied to the wrong accounts. Nevertheless, we felt the bottom line was materially accurate. Now however, since everything is being measured precisely, the client is recognizing the former misclassifications and we are even cleaning those up. Not that anything will ever be perfect, but it can be pretty close. It is exciting to realize how far you have come and how meticulous one can be when fixing a system.
When the bookkeeper quit and left my client stranded, I assured him we would not let him down. Not only have we gotten him through this troubled period, we have made his numbers better and given him better tools to make future decisions. For another cliché every cloud has a silver lining!
The morale of the story is still the same, do not wait. If your numbers are not correct, now is the time to make them correct. And, if they are accurate, make sure they are the best they can be. You cannot make good decisions if you do not have a good tool. You shouldn’t use a butter knife to cut a 2×4 so why do you use subpar numbers to make big business decisions?