The Big Reporting Mistake

What I find missing most often in wealth strategies is reporting. I find it amazing how so many people think they don't need reporting. Some think they will be so successful that they don't need a report to tell them that. Others think that reporting is just for their accountant to do their taxes. And, others think they aren't big enough to need reporting.

I heard from many of you asking if you really needed reporting, and my resounding answer to all of you is YES!

Whether you have 1 employee or 100, whether you have 1 rental property or 50, whether you invest in options, tax liens, or oil & gas, you need reporting!

- What is Reporting?

Simply put, reporting summarizes activity. When done correctly, reporting is a helpful and meaningful tool, which brings me to the big reporting mistake.

- The Big Reporting Mistake -

Have you ever been handed a balance sheet and income statement from your accountant and been told that this is your reporting?

When you look at these reports from your accountant, do you scratch your head and wonder what you are suppose to do with these reports?

Do you file these reports as quickly as possible, hoping to never see them again?

This is the system most business owners and investors use for their reporting and it is a big mistake!

The mistake is basing reporting solely on the balance sheet and income statement. While these reports can be helpful, particularly when it comes to tax planning and preparing tax returns, they are not the most helpful when it comes to providing business owners and investors with information that will help them grow their business and their wealth.

- Here is What Reporting Should Be -

Reporting should report the activity YOU want. There are no specific rules that must be followed - it is based on what you want to help you make decisions to grow your business and your wealth.

If you are a business owner, what information would you like to know?

Your most profitable product or service? How much each customer contributes to your bottom line? How many products or services you must sell to break even each month? Each week? Product sales by customer? Sales by employee? How much each employee contributes to your bottom line?

The list can go on and on. The key to reporting is getting the information about your business or investments that will help you make decisions to grow your business and your wealth.

- What Do You Want From Your Reporting?

Make your list! Make a list of all the items you want in your reporting. Make a list for each of your investments and businesses because you'll want different reporting for each type of investment and each business.

Be sure to include how frequently you want each item reported. Some items you may want to see once a month. Other items you may want to review on a weekly basis. And, there are some you will want to see every single day. For example, every morning I receive a report that tells me exactly how much cash was collected in each of my businesses.

The next step is to figure out how to get this information. In the meantime, really think about what you want from your reporting. It's the beginning of the year and a great time to get your reporting in place!