Why finance and accounting are simple
Three beliefs that make accounting seem hard, and three principles that turn it into a clear management tool.
Let's start from the opposite end: why does accounting seem hard? Most often, three beliefs get in the way.
«Accounting eats up loads of time, and everything's already on fire»
It's exactly the lack of insight into your resources, opportunities and risks that leads to constant firefighting. Working with data is an investment in peace of mind: at first it seems to take time, but later it saves you from chaos.
«We know our numbers anyway — it changes nothing»
Knowing without acting is indeed pointless. But focusing only on actionable metrics takes 20% of the time and delivers 80% of the result. Just as Pareto bequeathed.
«There's no point in planning — everything changes every month»
A plan doesn't guarantee protection from change. It merely reflects what you believe about your business. And what you believe (and whether you believe at all) is an even more fundamental question.
How to keep it simple
- —Eat the elephant one bite at a time. Start with 1–3 metrics whose knowledge will simplify management decisions the most.
- —You can only improve what you can measure. Find an indicator whose change will actually make you act — and decide in advance at what values.
- —The goal defines the path. Start with a simple goal — and it's definitely not revenue or profit, but the «top» of the funnel: visits, calls, proposals sent.
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