S2 E11: Knowing your Numbers with Craig Alexander Rattray

Join me in discussion with Craig Alexander Rattray to tackle more of the financial side of our CRASH acronym: Partial Transcript: Craig: I think to start, we need to take a step back and understand that most people who are running businesses, and whether that's construction or some other sector, they're running that because they understand that sector. they know how to build houses, or they know how to provide a particular type of service, because that's what they've been taught in. But they've never been taught about finance, accounts, banking, cash flow, any of these things. And what happens is that as the business grows, they then move into managerial roles that they've perhaps not been trained for either. And that makes it very challenging. And there's no classic. You don't know what you don't know. So people, set up in business, they bring on a couple of employees, they grow, they bring on a couple more. And all that happens there is that the working capital stretches more and more, so that whilst you are turning over more and probably generating more profit, your cash position is becoming worse. And for many business owners, they're the worst paid person in the company, because you need to pay the employees first, then you need to pay the suppliers. And as you're growing, if you've not filed accounts, you won't get the level of credit limits you need from suppliers. So cash is always tight. So what I start by doing is understanding where is the business just now, because in most cases, they don't have up to date financial information either. So you need to know where you are. Dave: I see a lot of accountancy companies, as very much generalists and more worrying, the companies who don't use cloud software. So how can they possibly help their clients be fully up to date in real time? And, more and more are moving, whether they're using Xero, QuickBooks, Sage, any of these wonderful tools. But it's amazing how many occasion practices do not do that. So that must frustrate you as well, coming from your background, is it not? Craig: It does, but it's often used as an excuse. Dave if I look back to being 1999, when I did my first role in industry, now, this was long before cloud accounting software. I still managed to put in place systems and procedures where we did everything every day. I had to report to my divisional head office in Houston, Texas, within three days with flash figures for the whole month and five day full reporting packs. So I had to put in place the people, the systems and procedures to allow us to do that. So if I could do that 20 years ago, plus then there's no excuse for people doing that now, because it's so much easier now. You've got all the apps that can take the information, all the receipts can go in, your bank feeds talked to Xero and QuickBooks and all these other systems as well. So there really is no excuse for not being up to date. Find Craig on Linkedin here: https://www.linkedin.com/in/craig-alexander-rattray/ and his websites: https://knowyournumbers.biz/ http://craigalexanderrattray.com/ As ever, please get in touch on [email protected]