Allen Bostrom – Universal Accounting

So many business owners consider their tax preparer as their accountant. This reveals two facts about their management style:

1. They are operating their business in the dark. When the 2002 US speed skating coach was asked how his team improved so much since the previous Winter Olympics he said, “I just coach them by the numbers.” He watched the stop watch to decide if they were doing well, or not. If their times were high, then he would adjust their training schedule to get them back in line to qualify. If the business owner isn’t watching the financials at least once per month, it would be similar to a team going to the Olympics with their fingers crossed.
2. Their decisions are based more on emotion, than on facts. I describe the Wisdom Pyramid in my book, In the Black. This model demonstrates how data turns to information, which then becomes knowledge and finally culminates in wisdom. A well run business is regularly climbing the pyramid in every aspect of their business. If the data is only generated once a year, at most the business owner can climb that pyramid is once a year. Every manager in our company, on the other hand, is climbing that pyramid at least once per week, if not more often.

Allen Bostrom
Universal Accounting Center