When I first started my company, I knew I could add-up. I had an economics degree, an MBA in which I graduated top of my class in Accounting and statistics and I had worked in the financial markets for 10 years. I could definitely add-up, so surely I could do my own accounts? It was at the end of the first month that I realized that I needed to reconsider my views.
I could add-up, more precisely Excel and Sage (the accounting system), could add-up, and here is the catch, only if I put in exactly the right data. Now, like a lot of sales and marketing people, I am a social being and I also need the creativity and energy associated with concepts. Detail is something I can do but is not part of my DNA. It’s not playing to my strength. I knew I could reach a total but then when I checked the figures, they would invariably add-up differently. Then the third time I checked, if I was lucky they would come back to the same number as one of the first two totals. In short, I am not a born book-keeper.
I also asked myself this question, ‘Should I add-up? Is keeping the books really the best use of my time from the point of view of the company’s strategy?’ The answer was clearly ‘No.’ I have been in sales and marketing all my life. Having worked in financial services I understand figures very well and can interpret them often better than purely financial people, but compiling them requires a very different mindset.
So after a month of being in business, I decided to bring in a business partner with a skill-set that compensated for my weakness. Book-keeping and operation detail are critical to the success of any business but especially one intent on scaling. Small mistakes in a small simple business may have small consequences, but their probability and impact expand dramatically as the business grows.
Too many start-ups or growth companies outsource their books to a third party for whom it is ‘just a job’. This maybe because the founder is uninterested in figures, doesn’t understand finance or is too busy being creative but you do so at your peril. It might be manageable whilst you are a small but if you have a growth agenda, you have to get this right from the beginning. A small mistake is the same as a big mistake. It is one wrong piece of data entry, whether it is 6 pence or 6,000 pounds. One slip of a computer key can create a real problem. It might be boring but you cannot take it for granted.