Accounting. Not my Jam.

I adore Kelsey McKinney, creator of and former host of the excellent and highly entertaining Normal Gossip podcast (https://lnkd.in/gwjRxr6G) and one of the Defector Media founders. I highly recommend listening (if you like gossip, which if you’re human, you like gossip) and reading Defector content (especially if you like sports). Anyways…

I’ve heard Kelsey discuss the challenges of starting a business, and admire her honesty when it comes to all things finance: “my accountant told me to review the P&L. I said, what is a P&L?” I am 100% paraphrasing here, it’s just to capture the sentiment: if you’re not an accountant or did not go to business school, how or why would you ever know about a P&L?

Let’s be clear. I am not an accountant. And, as the owner of my own research agency, I’ve had to get up to speed on all things accounting, not a passion or a topic I really cared to learn much about (unless the topic is part of a research study, and in that case, I'm 100% invested).

I now pay estimated quarterly taxes. I have a spreadsheet containing a mind boggling set of data and multiple sheets and more links than any I’ve managed in the past 15 years (with the exception of a few I used when I was a PM and tracking incredibly important details like MAU and click rates and churn and…thus I’m no longer a PM). I’ve learned the meaning of net 30, net 45 and net 60. I’ve created invoices, a key step to getting paid for work. It turns out the invoicing part, which should be easy peasy? That has really tripped me up.

I’ll leave out the nitty gritty details, but accounting departments do review invoices. And if you leave out key details, such as, oh, the total amount due or the associated line items, questions will come up.

How do I know? Why, this happened to me recently when I submitted an invoice for payment.

The invoice was approved, but a few weeks later, I received a very polite email from someone in finance saying “Hey, you left out some details. Please update and ensure your invoice matches the specifics of the PO.” (my words, not the official words). Thus began a series of extremely nice and patient back and forth messages. Real person or bot? I don’t know, I don’t care, the problem was resolved and importantly, I felt that someone was truly cheering for me and wanted to be successful in my quest to get paid.

Lesson 1: Use the approved invoice as a template for all invoices moving forward.

Lesson 2: If you’re thinking about starting your own business, hire an accountant.

Want to talk more about starting your own business? Reach out, let’s chat!

PS: PO = purchase order, just in case...