A big welcome to a new guest blogger: Glen Feechan is Chief Executive of Spreadsheets by Email and author of the Not Just Numbers blog). He is a Chartered Accountant by profession and provides spreadsheet solutions, large and small, to a worldwide client base. He’ll be providing some great Excel tips in future blogs, mixed in with a few experiences of his own. Here’s Glen’s first post.
Lessons I didn’t learn until I ran my own business
This is a tough one to swallow from a financial background. I am sure we've all at times thought that salesmen are so full of themselves, thinking that the whole business should revolve around them. They would always think that they are key to the business and we financial people are just overheads. Well, although I wouldn't go that far, there was a lot of truth in what they said.
No matter how fantastic our back-office systems and processes are, they are still a cost. By making them better, we can reduce that cost, but not eliminate it.
As accountants we should know better than anyone,
Profit = Sales - Costs
If we are being paid our wages, then costs must be positive and it doesn't matter how much we reduce costs, profits will be negative unless sales exceed them.
Like many of us from an accounting background, I followed my instincts and set up all of the back office processes straight away. Thereby creating overheads before sales and guaranteeing early losses.
Starting over I would do it differently. Believe me, it's a lot nicer problem to have sales flooding in and a need to set up processes to account for them, than to have overheads to pay and a need for sales to meet them.