To view Session 1 click here
To view Session 2 click here
The F word
Before Friday's session on accounting, finance was just another F word to me.
I nearly ventured into the murky waters of accounting in my first year of high school, but when I went to collect my textbooks - the French one looked far more interesting.
In the last 5 weeks I've enjoyed every one of the sessions but somehow my aversion to accounting made me wish I had some plausible excuse for missing this session.
In the first 5 minutes of the session I was glad I'd made the effort to drag myself out of bed. I have 3 children, all under 5 years old, so staying in bed was never a real option anyway... but a girl can dream can't she?
Hats off to Adam Franklin, who, in the space of 8 hours managed to demystify accounting for a room full of wide eyed entrepreneurs. If the Accounting Comes Alive - Color Accounting system had been around way back in my school days I would have skipped French. I think. Ok I can manage accounting for a day, but I'm not a masochist. French would probably still have won.
Before we got started Adam asked us to introduce ourselves, state what we knew or thought of accounting, and say what our favorite drinks were. I learnt two things during this exercise. First, most of us are either confused by, petrified of or downright hated accounting. Second a lot of people lied about their favorite drinks! In a class of 20 people (some of whom I have already seen knock back beers) there were an unbelievable number (no really, I don't believe it at all) of health nuts - with water being their favorite drink. Psssh. I think we all need to learn a bit more about being more real instead of adjusting who we are to suit the audience. Its part of being consistent with your values and principles. I'm not saying there's anything wrong with liking water, but if it isn't your favorite drink - and you actually like Black Label then stick your neck out there and take a risk! Be comfortable enough with who you are to be willing to stand out.
Back to finance... The Color Accounting system is a stroke of sheer genius. As a creative, my brain thinks in pictures and descriptive language - not technical jargon.
Understanding The Balance Sheet, Income Statement and transactions made easy
The system helps you take baby steps toward understanding some complicated concepts in a fun way.
The first thing we learnt was that most of us had some sort of baggage when it came to accounting. Misconceptions and misinformation we had picked up along the way. All of our baggage had to be left at the door.
Over the course of the day we absorbed so much information that we thought our heads would burst. There were a lot of confused faces at first, but as the day progressed there were more and more "aha" moments, and less worried frowns.
I can now say with confidence that I understand the basics of how to prepare, read and interpret balance sheets and income statements.
My biggest learning from the day is that as a business owner you need to have a good understanding of the language of finance. It's not good enough to leave it up to your bookkeeper to prepare, read and interpret those statements. He or she doesn't understand the business as well as you do, and may not spot problem areas before its too late. If you know how to read your company's financials it empowers you to act swiftly when correction is needed. It also has influence on determining the strategy your company needs to implement.
The next step for me is to prepare my company's balance sheet and income statement. I'm still feeling a little daunted, but overall I feel that the knowledge gained during this intensive 1 day course has empowered me to take on a task that seemed impossible before.
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