Why Accurate Financials Are so Important

Have you ever had one of those “Aha!” moments—when you suddenly understand something that had previously seemed mysterious or impossible? I’ve had more than enough of those, maybe more than I’d like to admit. But each “aha” means growth, right?

One of my most significant life moments of clarity (besides my faith) was finally understanding how crucial accurate accounting is for running a successful business. Let me share my story, and hopefully, you’ll see why having precise, trustworthy financials isn’t just helpful—it’s essential.

In my early adult years, I lived in a Colorado resort community, bustling in winter and quiet in summer. Winters were incredible—I spent seven unforgettable seasons driving two majestic Belgian draft horses, pulling sleighs filled with guests through the snow-covered Rocky Mountains. These gentle giants made even tough days good. But during summers, I found myself bored working for others. I dreamed of owning a business like my dad, so I jumped into entrepreneurship with excitement but little knowledge.

I poured my heart, sweat, and energy into my new business, eager to provide perfect customer results. But while I knew how to work hard, I had no clue how to price services, manage cash flow, or handle payroll. I even hired an employee without understanding the complexities of payroll taxes (long before the automation we have today). Predictably, my first business failed spectacularly, and it wasn’t pretty.

Still determined, I searched for more opportunities, but these ventures didn’t fare much better. Whether it was short sales (right before the housing market crash—timing is everything!) or other ventures with partners lacking organizational skills, each experience taught me valuable lessons, even if they were painful.

In early 2012, I got another big chance—running a franchise in northern Wisconsin. Excited and hopeful, I received excellent training and support but quickly faced my toughest challenge: I had to fire a long-standing manager whose negativity was holding back the business. It was a terrifying leap of faith but necessary for growth.

Things got more challenging before they got better. Equipment broke down, including a terrifying moment when a car fell off a lift (thankfully, nobody was hurt). We needed to invest desperately in new equipment to keep delivering on our promises.

Four years of relentless work brought our revenue to half a million dollars, which sounds fantastic—except our bank account was constantly empty. I couldn’t understand it. I believed the QuickBooks commercials claiming bookkeeping was as simple as baking pie—sync your accounts and go! Spoiler alert: they were wrong.

The idea that bookkeeping is simple is a dangerous myth. Managing your business finances isn’t easy, and interpreting what those numbers mean is even more complicated. When I read Warren Buffet’s book, “Snowball,” he explained the importance of reading a balance sheet and determining if a business was worth investing in. Similarly, accurate financial reports reveal your business’s direction, giving you insight into issues before they become problems.

Thankfully, I eventually met someone talented enough not to run away screaming “disaster” when they saw my messy books. Instead, this incredible person patiently sorted through years of mistakes and confusion to reveal the harsh but necessary truth about my business. That moment of clarity—the realization that everything I’d done was based on guesses and assumptions— changed everything.

Looking back, accurate accounting would have saved me many headaches. I joke that I could have written a book titled “Grease Monkeys” about the crazy adventures (and misadventures!) in the auto repair shop—a lot caused by ignorance about financial management.

Fast forward to 2019, my wife Amber and I excitedly began planning our next big venture—a brewery. With Amber by my side, the same talented person who had straightened out my bookkeeping mess (yes, we married!), we built our plans on solid financial foundations. We had budgets, projections, and clear insights. Then came March 2020 and the global pandemic, forcing us to pause—and ultimately abandon—our brewery plans. Thankfully, we hadn’t fully committed yet, dodging what would have been a less than favorable situation.

But the story has a happy ending. At the end of 2020, Amber and I poured our energy into growing our bookkeeping and accounting firm. We now help other entrepreneurs and give confidence in their numbers. It feels like the cherry on top of all the struggles endured.

The lesson I learned in life is clear: accounting is foundational to business success. Having a great idea, a strong team, marketing skills, and passion are critical. But without accurate financials, you’re just guessing. Numbers don’t lie (if they’re correct), and knowing your numbers means understanding your business.

Accurate financials allow you to have more powerful financial tools like budgeting effectively, tracking project performance, and making informed decisions as you grow your business. If I could start over, I would immediately invest in understanding accounting and finance. It’s not just valuable; it’s essential and foundational for all businesses.