Today we are talking all about financial literacy with Dondrea Owens. Dondrea Owens is a Certified Public Accountant (CPA) that is dedicated to helping small business owners understand their numbers so that they can grow their profit and their confidence when it comes to their business finances.

 

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Meet Dondrea Owens

Dondrea Owens is a Certified Public Accountant (CPA) who helps small business owners understand their numbers so that they can grow their profit, up-level their life, and keep more money while doing it.

 

What are some steps business owners can take to start tracking their business finances?

Dondrea says that the first step in tackling your business finances is also the number one rule: keeping business transactions separate from your personal transactions. She advises business owners to open a separate personal banking account that is just for business transactions. Dondrea states that this is the easiest way to track business finances because you are able to avoid filtering through personal transactions, saving you and your accountant precious time.

Following this step, Dondrea suggests finding financial professionals to either bring in from the beginning, or to keep in your back pocket until you have scaled enough to outsource your business finances. When looking to bring in any sort of financial professional, Dondrea says you need to ask yourself, “Who are my finance people? What do they do? And when do I need them?” 

She says that answering these valuable questions will help you understand the specific role, benefit, and need that each financial professional fills in your business. 

 

What are some of the ways entrepreneurs can evaluate when it’s time to invest in an accountant and how can they figure out who should be responsible for their business finances?

Dondrea tells our audience that as soon as you see your business is profitable, you should connect with an account and an attorney. She reiterates this point by saying that these are two people that you always need to have in your back pocket. Whether you need them now or in the future, you always need to know who those people will be for you.

She goes on to list some of the specific finance professionals that you will want to have managing your accounts. 

First, a bookkeeper. This person takes care of the day-to-day finances such as recording and sorting transactions, reconciliations, etc. They specialize in preparing reports that give you an overview of your finances on a monthly basis. 

Next, Dondrea says you will want to have an accountant on hand. The accountant comes through to look at the bookkeeper report to make sure it all adds up. They will ensure the report is detailed enough that you can make informed decisions from it, but not too detailed that it just lists all of your transactions like a bank account.

After the accountant, the CFO, comes in to suggest overall strategy for the business to the CEO. The CFO reviews the reports from both the bookkeeper and accountant to suggest possible budget changes, growth plans, and cost initiatives that are specific to your business.

Dondrea also highlights the fact that the CFO works closely with the CEO. The CEO provides the vision and goals for the business, and the CFO along with the other financial professionals work together to give data and suggestions about how to make the numbers match the vision.

She also stresses the importance of having a reliable CPA in your entourage. Dondrea clarifies that this is someone who would not necessarily work with you as consistently as the other professionals, but would be there to represent you if the IRS audits your business or another similar situation arises. She reasserts that no other financial professional has the designation or authority to do that. 

To top it all off, Dondrea says that having these types of certified professionals in your corner gives you reassurance that they know where to look and what to look for when monitoring for financial obstacles that could potentially threaten your business. 

 

What does being financially responsible look like for you and your clients? 

Dondrea answered this question by saying that the first step is always clarity. She asked the audience, “Do you know what your numbers are? Do you know what is happening with your finances before you look at the bank balance? Do you know what happened to get it there?”

Dondrea says knowing what your cash in-flows and out-flows look like is invaluable and necessary. 

She continued by saying that once she and her team have a good understanding of your cash flows, they look at your revenue to determine if you’re maximizing it. She lists that they dive into the money you are investing into your time, your team members time, your pricing, etc. because all of these elements factor into the gross pool of money that comes into your business. 

From there, Dondrea and her team are looking at expenses, “What are you paying contractors? What are you paying your team? What are you spending on advertising and marketing?” Etc. She says their goal for this step is to see where you are being efficient with your spending and what areas could be streamlined. 

Once they know the answers to these questions, then they are able to make any necessary adjustments to ensure you are reaching maximum profitability for where your business currently stands.  

She reiterates the importance of these steps by highlighting that knowing this baseline is crucial if you want to accurately determine what future growth looks like. 

Dondrea summarizes by saying that the goal of her team is to give business owners confidence. She states that when entrepreneurs know exactly what they are able to spend (on client onboarding, bonuses, launches, etc.) and still be profitable, it allows them to make informed decisions in all areas of their businesses.

Business owners should have the data that gives them the ability to be proactive about making financial decisions; not reactive. 

 

What are some of the ways business owners can measure their finances and evaluate them to help them make decisions in their business? And what are some of the ways entrepreneurs can measure their growth?

Dondrea answered this question with a simple but powerful statement: growth isn’t always financial. 

Growth depends on what your objective is. She points out that one thing she hears frequently is that business owners want to grow over 6 figures. Dondrea follows up this request with this question, “What does that look like in terms of your time and capacity?” She says that she then looks at what the client would need to do in order to achieve this in terms of client volume, product shipment, etc. 

Following this, she points out that if expenses and revenue are going up at the same rate, profit is not going up. It’s important to understand whether or not you have the capacity to actually increase profit and not just revenue and expenses simultaneously.

She concludes that having these honest conversations about whether or not a goal will work financially at the present moment, will help you realize what your business can do and scale accordingly.

Dondrea then took some time to highlight the importance of recognizing patterns within your business. She points out that your business is going to fluctuate every month; the key is understanding these patterns and not taking the numbers for each month at an individual face value. 

She stresses that you must understand the flow of your business and work from that; not from each month individually. Viewing all the months together collectively with relevant data will help you find, predict and work cohesively with the patterns of your business.

 

Dondrea concludes by re-emphasizing the goals of her business: to give business owners the tools they need to confidently make data-driven financial decisions for their businesses. Dondrea and her team want entrepreneurs to have the knowledge they need to be prepared for financial obstacles and decisions and respond proactively. 

If you’re ready to start mastering financial literacy in your business, connect with Dondrea by checking out the links below!

 

LINKS MENTIONED

Check Out The Creative’s CFO Website!

 

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Book A Consultation With Dondrea Here!

 

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Mastering Financial Literacy With Dondrea Owens

December 7, 2022

financial

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