Why you can’t just outsource the ‘Money Stuff’

* Transcript created by AI – may contain errors or omissions from original podcast audio

Imagine handing your car keys to a stranger and saying, just drive me somewhere nice. That’s essentially what you are doing when you completely delegate your finances and have absolutely no idea what’s going on. I am all for outsourcing, but there is one area of your business you cannot outsource, financial responsibility.

Many people think that hiring a finance professional means they can check out entirely, but that is one of the most dangerous things you can do as a business owner. And in today’s episode, I’m gonna share with you why and what you can do about it.

Well, let’s start with the elephant in the room, shall we? You might hear me talking about how you just can’t outsource your money stuff to someone else. [00:01:00] You might be wondering, are you saying Clare, that I can’t hire a bookkeeper or an accountant? If you were hearing that you are confusing the task delegation with the responsibility delegation. So I absolutely think you can and should hire an accountant and/or a bookkeeper. You can delegate the task, but you can’t delegate the decision making and the responsibility around your number. And here’s the reason why. Because without basic financial literacy, you can’t actually evaluate if your hired help is doing a good job.

What I am saying is that you, yourself, as the CEO, as the business owner need to have good financial literacy, [00:02:00] you need to understand the basics of what’s going on so you can effectively assess whether they are indeed doing a good job or not. Let me share an example with you from back in my corporate days.

So we used to outsource our marketing to an external agency. And I was working in a really big company at the time. We were paying a massive retainer to this agency because they were very glossy, sold it in all of the things. Now, at the time, we were all a bit clueless about the things they were talking about, Facebook ads, Google ads, SEO. They would talk and you know, would kind of glaze over and think, “Yeah, that sounds like they know what they’re talking about.” Since coming into being a small business owner, and I’ve upskilled in a lot of these areas, I am mortified at some [00:03:00] of the poor advice that we were given and how much money we were spending on substandard results and work.

But because we didn’t have the the basics down pat, we had no idea whether we were being ripped off or not. Whether the agency knew what they were talking about or not, and this is exactly the same when it comes to your money. Your accountant might say something and you kind of glaze over and go, “Oh, it sounds like they know what they’re talking about.”

And you might be just tipping your hard earned money down the toilet because you don’t understand what is going on. So here’s the truth about your finance team. Absolutely there are great accountants out there and there are great bookkeepers out there, but accountants and finance professionals are humans.

Even the best accountants make [00:04:00] mistakes and sometimes very costly ones. The uncomfortable truth, that also comes along with this, is that some professionals take advantage of financially illiterate clients. And on my Instagram account, I actually shared a ton of examples where accountants have been charged with embezzlement and stealing from their clients, which was only even discovered because they changed accountants or because something else unfolded.

You might not even know if your finance team are doing the do on you if you don’t understand the basics. Your protection strategy is having enough knowledge to ask the right questions and to be able to spot the red flags. The bottom line is this, [00:05:00] it’s your money, it’s your business, it’s your future, and it’s actually your legal obligation.

Think about it. If you miss a tax bill, you can’t just say to the tax office, “Oops, sorry, we missed that one.” And then they’ll go, “Oh, that’s okay. No problems. We didn’t realize that your accountant hadn’t told you about it. Don’t worry about paying it.” It doesn’t work like that. If you have a legal obligation to pay money, that is your legal responsibility.

So what are the things that you need to know? How do you actually get a handle on your money stuff? The non-negotiables, in my opinion, are that you need to understand cash flow, profit, how to read your balance sheet, and your basic financial health indicators. Financial literacy gives you the [00:06:00] confidence

to have meaningful conversations with your finance team. Now, if you are listening to what I’ve been talking about so far and you are realizing it is time for you to step into your CEO pants to really understand the basics of what’s going on with your finances, I have a free challenge that’s coming up, which is called the Fix Your Finances Challenge.

It is still a little over a month before I’m actually delivering it, but I’m so excited. I wanna tell you about it now because I really believe it’s gonna be a game changer if you feel overwhelmed and clueless when it comes to your money and if you know you need to know more about it. If you want to earn more money, make more profit, and have financial confidence in your business. You can actually go and sign up early. The link is in the bio and then that way you’ll get all the reminders when the challenge is live. I’ll be teaching it live myself, so you’ll be able to join me inside and ask any of those curly questions that you do have [00:07:00] about getting across your numbers.

So what I wanna say is that when you are empowered with your money. You can hire finance professionals to execute on the financial strategy. It’s just that you are then providing direction, oversight, and they are providing the expertise and the execution because even with excellent help, you need to understand the basics to be able to make good decisions as a business owner and as a CEO.

If you do need a bit of help with those naughty numbers, the Fix Your Finances challenge is coming back for the first time in over 12 months. So go and click on the link in the show notes for today’s episode, and you’ll find out the details of when it’s going live. Thanks so much for listening to today’s episode.

I’ll be sharing more about the importance of knowing your numbers over the coming weeks, so make sure you stay tuned to [00:08:00] The Clare Wood Podcast.

* Transcript created by AI – may contain errors or omissions from original podcast audio