Finally! An Accountant Explaining What the Numbers Really Mean | The UnNoticed Entrepreneur

Welcome to this episode of The Unnoticed Entrepreneur with me, your host, Jim James. And if you're an entrepreneur who has really struggled to find growth in the business and at the same time manage the financial aspects of that growth, if you've got a bit frustrated with your accountant who is always kind of chasing after you for receipts rather than helping you to plan the growth of the business, means you get this kind of stop and start with your cash flow and your growth, my guest today is going to be really valuable for you because he is the president of a company called Universal Accounting. His name is Roger Knecht. Roger, welcome to the show.

It's a pleasure to be here, Jim. Thank you for the opportunity.

Well, don't take this the wrong way, but I don't often have long conversations with accountants. And, you know, that's probably part of the problem that they kind of turn up at the end of the month and ask for some books. or ask for some receipts, they give me back numbers I don't understand, and I feel as though I'm kind of a little bit on my own, but with them filing for me once a year with a lot of stress. Roger, how should a relationship between an entrepreneur and their accounting partner be structured? What should we look like, look like when we have these conversations, and what should we expect from a company Well, let me answer it this way.

I've been speaking to business owners for perhaps basically, well, 2 decades at least, trying to understand what it is that they expect from the accounting profession. And in that same time, I've also been speaking with the accounting professionals, trying to understand how they best describe the services they provide. And I've learned very quickly that they do not understand one another, and nor do they communicate well with one another. And here's what I mean by that. Unfortunately, the business owner, as they're very successful offering the product that they do, they don't understand what it is that the accountant or service that they do. They excel there, but when it comes to understanding what's involved with bookkeeping, accounting, tax, all those types of things are somewhat of an enigma. They basically trust that the profession's going to take care of them. So the very first thing that most accounting entrepreneurs do is they outsource the accounting, and in doing so, trust that they're going to keep them compliant, trust that they're going to take care of them from a tax perspective so that they can focus on the business. And the challenge simply becomes that the business owner is too busy trusting, in my opinion, of what's happening at the accounting level. And the accountant is not clear enough as to what information they have within their possession that can honestly improve the business, empowering the business owner to literally make more informed business decisions if they just simply understood what they were looking at. So just to understand this, I'm going to end very quickly by saying this: the proper role of the accounting professional is to be an interpreter, a translator, someone who takes the language of accounting the language of business and helps the business owner understand what the business is trying to communicate back to that business owner. So that's our role. The accounting profession needs to be much better as a translator, an interpreter, than we are.

Roger, that's a wonderful way of looking at it because often the accountants are almost like the sweeper-uppers, aren't they? And yet we need them by our side because ironically enough, we're in business to make money. And yet we outsource the guardianship of the very thing we're trying to create to someone we don't communicate with very often or very well. Roger, you are helping business owners to find a path to profit, which ultimately is what we're all doing. Can you just help us to understand, as a strategic accountant as opposed to a bookkeeper, what are some of the lessons that you share in part to people like me that are not accountants but need to understand how accounting impacts our business?

The first thing that I'd want to do is help the business owner, the entrepreneur, realize that the business is trying to communicate to the business owner what is going on in the company. And this is what I mean. Imagine the business is an individual. It's a living entity. It's something that's thriving Apart from the business owner. And as it exists, it's trying to communicate to the business owner, I like that. Do that more. This is working. Versus, stop that. This is frustrating me. This doesn't feel good. The business is trying to communicate to the owner those goods and those bads. However, what happens is the business owner doesn't hear it. It doesn't— the business owner doesn't understand this communication. So, it's understood that Accounting is the language of business, but if you don't have the Rosetta Stone to understand what's being said by the company to the owner, you start to kind of distance yourself from that communication. You stop listening. You you try to run the business by trying to basically do the things on a day-to-day basis. And what I'm trying to say is that the accounting professional who's recording all that information, who's actually helping the business be compliant, can literally come in as a trusted advisor and inform the business owner of things that they ought to be aware of as it relates. relates to the business, so that they can make more informed business decisions, more intelligent business decisions, accelerating the success of the company. And so as the business owner leans into the accounting profession for that help and advice, I think that they'll find that the accounting is more of an asset than a liability when running the company. It's not just a necessary evil because I'm in business, I have to have this. No, you'll lean into it realizing, I'm learning more about my own business, the relationship I have with my own company, because of this individual who's helping me through the accounting hear my company.

Rogier, and you, you use the term Rosetta Stone, which I've never heard an accountant express the book, the books as being a Rosetta Stone, that they're really giving you the opportunity to have an insight into the function of the business. Because as entrepreneurs, we're so busy thinking about, you know, customers and surveys and maybe social media. and maybe sort of a social proof that we completely ignore what you've identified there, which is the numbers don't lie. The numbers are really telling us how the business is actually performing. What would be some of the ways that you could give us some guidance? I know we don't have long of your time today, but it's wonderful to have you just for now to share with us. You've got a book called Your Strategic Accountant, which Anyone looking on YouTube can see this and we'll have a link to this in the show notes. It's at universalbusinessbuilders.com. Roger Knecht, can you just tell us as the author of this book, what do you mean by your strategic account and what are some of the things that we would learn from you when we look at this book?

Well, one of the things that I hope the business owner learns is that the business does communicate to the business owner and we as business owners should be listening. What I want to do is help the business owner understand what the different roles are that exist in the accounting profession to achieve that. For example, there is a distinct role called a bookkeeper that differs from that of an accountant. Bookkeepers and accountants, 2 different roles. But for the business owner, they might be a synonymous type thing, something that they think they're paying for. When I'm paying for bookkeeping services, I thought I'm getting accounting services. Well, that, that may not be the case. The same would be for tax planning and tax preparation. When you're paying for tax preparation, The filing of the returns, being compliant in the sense that you've filed in a timely manner, that's great, but that doesn't mean you've received any tax planning or advice. And what we need is more of that advice to be more strategic in our decisions to mitigate some of the tax liabilities that we have. Well, I need to go to a tax planner, an advisor for that role, not just the tax preparer. And then the third happens to be at the CFO and advisory level. The role of a CFO is distinctly different than that of an accountant or bookkeeper, let's say. They are involved in the organization and how the company is functioning as it relates to cash flow, where capital is coming from, relationships with the investors. All these things are at the CFO level. It's not what the bookkeeper is involved in. And as a business owner, when I know and understand what each of those roles are and how to leverage them to the success of the business, I can actually work with an individual or individuals that as a team can help me be a more effective, more profitable business owner. That's huge. And that's where you lean into the accounting profession and have certain expectations that allow you to be more profitable.

Really, really useful because as you said, they're often almost synonymous, aren't they? We view them as all one and the same, but actually they're playing very, very different roles. Can I put you on the spot, Roger? With 25 years of running this business of universal accounting, is there one mistake that you see entrepreneurs making repeatedly that you'd like to just shout out and say, please, Don't make this mistake from an accounting point of view. I have to ask you that because, you know, getting some advice from someone with your level of seniority would be wonderful. And then we're going to talk about your 9 principles to make the business profitable.

I'm going to definitely answer that by saying cash flow. That is the biggest thing that I see business owners oftentimes struggling with as it relates to, I'm selling, people want what my product or service is, I have transactions, but why don't I have money in the bank? They look at the balance sheet, they look at the P&L, So here's my income statement. It says that I was profitable last month, but at the end of the day, I don't have money in the bank. Why don't I have money in the bank? And that misunderstanding of what cash is and where it comes from and how you use it, that's hugely important to the success of any business. And so too often I've seen companies that are selling, they have customers, the customers are happy, but they go bankrupt. And it's not because they don't have a good product, and it's not because they don't have sales and transactions happening. It's because they've misunderstood how to manage the cash. And so the accountant can really help in that process, especially the CFO. The CFO is intended to actually address that issue of cash flow, how it relates to accounts receivables, accounts payable, the gap that exists between that where you're acting as a bank and floating the money. There's a lot going on here, and the business owner with that great idea of how to market the company and product, with that great product and service they're offering, They don't sometimes have the skills or understanding of how to manage cash flow.

Roger, there's a huge, huge topic in there, and we don't have enough time to get all of your wisdom, but we'll put a link to Roger's contact details at the end of the show. Roger, you've actually though written a book, and you've got a book on your website. It's called In the Black: 9 Principles to Make Your Business Profitable. We could go a whole show on this, but perhaps you could give us top line a few of them. And I'm going to share for anyone that wants to look at the YouTube channel, you can see the book. But if not, Roger is going to just give you some top line principles here so that you can understand what he means and how he helps his clients. Roger, just explain what you mean about these 9 principles.

So it's based upon a model called the Universal Business Model. And it's made up of 3 things: marketing, accounting, and production. And it's essentially saying that every business Regardless of how old they are or size, is made up of these 3 very important components. Marketing is the effort to go out and acquire the clients you deserve. Marketing and selling your services or products. Accounting is basically watching the numbers, understanding the numbers, and using those to intelligently run the business as it relates to, for example, cash flow. Production is the work, the efficiency in which you're doing it to do the work profitably, delivering that product in a way that you can overdeliver, wow your customers, and so forth. So, those components as they come together is where you find profit. Well, these 9 principles that you and I are discussing right now happen to make up essentially what the business owner needs to be aware of in the short-term, midterm, and long-term. Short-term is to say, as a company, I need to be focusing on the following things in the next, say, 30 to 60 days, basically a quarter. If I can focus on that, I'm going to be doing very, very well. The next is the midterm. Midterm is quarter to semiannual. The 3 to 6 month period of time. If I can focus on these things within the business, I'm going to do well. And then the long term happens to be the 1 to 3 year goals that the company has. Now, when I say short term, midterm, long term, short term is at the employee level, the day-to-day, what's happening in the company as it relates to the customer, as it relates to the operations of the business. Midterm happens to be the management level of the company. Management suggesting, how do we take what we have, make it better? How do we improve processes? Put in place processes, use systems. The long term is the one thing that the owner cannot delegate. It's something that they have to provide and bring on a regular basis. It's the vision, the direction of the business. It's the long term opportunities that the company is needing to consider. And when you as a company have these nine principles laid into your operational procedures, everyone's kind of aware of what they're doing as it relates to the short term, midterm, long term goals. It allows the company to really evolve in a positive. It moves the company in a direction that the company is now improving and doing better as it relates to its services, its products, more importantly, its profitability. And that's what we're trying to focus on with the 9 principles.

And what I love about that, Roger, as well, is that you've really got visually, and also how you've articulated it, that marketing and accounting and production really are interlinked. That there's not a gap between one and the other. They're not disparate entities. They really are integrated. And that's too often what we're not doing when we outsource accounting or bookkeeping. And we're not seeing the cash flow as fundamental to the success of the marketing and the production and that these things all move in concert really, right? That's part of the key.

Well, when you're running a business, it can be very overwhelming. As a business owner, you're seeing everything from start to finish. You're experiencing the process from the customer's point of view, from the employee's point of view. There's a lot happening here. And what the Universal Business Model is meant to do is take all those things that are in our minds that we're trying to work on and organize them. And once we're organizing them as to, okay, these things that I'm interested in addressing now are related to marketing and selling, getting clients, growing the business. This is related to production, where I'm going to be working on the efficiency of how we do the work. Work here and produce a consistent, profitable product or service. Those things are, are very important. But I'm able to take all this clutter in my mind and organize it into these 3 areas and then prioritize it. Okay, as it relates to marketing and sales, what's the thing I can work on today, right now, that'll make the biggest difference? And because I'm able to prioritize it, I'm able to now feel as if I'm in control. I'm not feeling as if I'm being pulled to and fro. I'm rather in my business and I'm deliberately managing it. I'm working on it. And that's what I'm very pleased to say the Universal Business Model does for so many of the people that adhere to it and follow it is it helps us feel as if we're actually running our own companies.

And Roger, we've got actually a free download to that book and your own book, which we're going to give links to at the end of the show. So thank you for that. That's wonderful. Now, you've also, though, been running Universal Accounting for over 20 years, and you've managed to build the brand as well. Switching gears a little bit from what you do to how you do it, Roger, how have you managed to build the brand of Universal Accounting in— well, you're in a place called America Fork, which is just south of Salt Lake City, but I'm assuming you've probably got clients from all over the country.

Yes, we're an international business. We do have a very strong foothold here in the United States. The way I would answer your question is this. For the longest time, we considered branding the business as a company, as as Universal Accounting, and it was really quickly apparent in social media that you just cannot leverage something that is this branded logo. It has to be personable. It has to be someone that you can approach. It has to be someone that you can identify with. And for the longest time, I was reluctant to actually be the ambassador of Universal Accounting, to put myself out there. And once I did decide, okay, ego away. Let's go ahead and dive into this. I also started to experience, okay, people now are able to relate with me and identify with me and hear me. And so I was able to get out of my own way and really become, as I should, the president of the company. And in doing so, we've been able to, in the last number of years, really take and find a place within social media and have a presence online. And it's been a wonderful journey simply because I'm now at a point where people that are my customers are able to relate with me, see me, identify with me. And that's very important.

Roger, and you, you may have been shy at the beginning, but, you know, anyone that looks at, at the videos and the photos will realize that Roger doesn't need to. He has a little bit of Roger Moore, uh, the sort of Sean Connery thing going on there. Sorry, Sean Connery, not Roger Moore. You've got some of the James Bond Sean Connery look there with the beard. Um, Roger, You've managed to get a Facebook group going with over 37,000 followers, and you've got YouTube as well. I'm just looking at my screen here with 5,800 followers. How have you managed to build that? Because again, accounting traditionally isn't considered to be particularly social or particularly sexy, but you've managed to get really a huge following. How have you managed to do that?

It's based on a principle that I think everyone can adhere to, which is you need to be able to communicate to your customer base information. You need to be freely giving of things that can help those that are interested in following you and learning from you. And in order to do so, you have to be very clear as to what they should be knowing as it relates to their business or their need, and also how they can address that. So the what and the why becomes very important. Why this is something your customers need to consider, why they should act now. But really, at the end of the day, the how is what they pay for. So just to be clear, what and why is what I freely give to my audience. I try to just educate them, freely give them information to help them be better than what they currently are now. I, I'm answering the why it matters, and then I'll throw in periodically some of the hows. But at the end of the day, the how is what they're going to pay for. So with that business mindset, I find that it resonates very well with the audience, and they're able to see that there's value in following me, listening to me, because they're learning what and why things matter. And at the end of the day, get some free how-tos, and they're edified. They want to stay engaged, and that's very important.

I love that. I love that you're showing them the what and the why but not the how, Roger, which is, which is what they pay you for. Roger, looks like a textbook case. in building a brand. And congratulations on what you've done and also appreciate how you've taken that role on. Is there something that you could share as a lesson that hasn't gone quite as planned when you've been building the brand for Universal Accounting?

Oh, well, there's a lot of lessons learned, whether they're the legal ones, the personal ones. One of the things that I will share, and it's Probably different than what many people would actually expect, is that there's no success that can compensate for failure in the home. Of all the things that I try to do and all the things that are sexy and draw me into the business and consume my time, I do want to actually be ever conscious of my family. I want to be aware that I'm doing this for them. And if I neglect them, my family is always going to be here. The company won't. Eventually I'll retire. I'll have my family and I want to be able to Lean back on them and have a family that I'm bonded to and have relationships with. So, at the end of the day, I definitely want to say I am a workaholic. I'm drawn to the business. I love what I do. I'm edified because of the successes I have and challenges when they appear. I'm eager to embrace them. But at the end of the day, I need to remind myself that I've got to get back to family. Family is is where it's.

Roger, that's that's. And really heartwarming as well. And you've built Universal Accounting, so you're plainly a successful family man, but also an entrepreneur. If there's a tip that you'd like to give, other obviously than the importance of family, from a professional point of view, what would you say to us Roger Connect?

Mindset. One of the big mindset things that I would really want to share is that of abundance and gratitude. Abundance is to say that you do not have to believe that in business to succeed you have to take from someone else. Your success does not mean that someone had to fail. Your success in getting a client doesn't mean that somebody else is suffering at a lack. And so one of the things that I really want to emphasize is that there's plenty to go around. And as it relates to many of the industries I'm working with, there's plenty of customers for the competition to have and you to have and us to all be happy. Now I'm Not suggesting you be second. Be the premier in your business. But don't presume that you have to be so cutthroat and, and go with a scarcity mindset that if they're succeeding, I'm failing. The second thing is gratitude. There's so much to be grateful for today. And I feel if you're in that positive mindset of gratitude, you're able to find the blessings in your life personally and professionally. And I think you're just going to then gravitate all these things that are positive to you. And so, uh, definitely want to emphasize those 2 points of abundance and gratitude.

Well, I'm grateful to you for sharing. It's kind of a textbook, and I love how you've managed to build the company brand of Universal Accounting but recognize that a logo itself isn't enough. There needs to be a brand ambassador, which you've stepped into the role of doing and done brilliantly. You've kindly got downloads for people. Would you like to share where people can go to get those? If you just express those, and I will also share screen, and we'll put these, of course, in the show notes.

Jim, I appreciate it. Yeah, for all of your listeners, anyone that would like to, I have available at universalaccounting.com, in the navigation you'll see free resources. There happens to be a variety of things, workbooks, ebooks, classes, and such that you can take advantage of to help you personally and professionally. These are resources meant to actually help you work on your business. Many of them are geared specifically to the accounting profession, but I want you to understand the majority are agnostic to industry or profession. You can go there and find numerous things that would be of great worth and value to you as you're running your business as an entrepreneur. So, I invite you to definitely go there and take advantage of those free resources.

And Roger, looking at those, those are also geography independent. They're not jurisdiction dependent either. They're sort of about running a business and and how you can view your financial partner, really, which is what you are, bringing your Rosetta Stone, as you called it, so that the accounts are giving you insight into your business rather than trying to keep, sort of keep up with the business. They're helping you to really stay in tune and in time with the business. Roger Kinnear, it's really, really wonderful. Thank you so much for joining us from Utah today with that knowledge. Where can people find you if they want to reach out?

Love connecting with individuals on LinkedIn. I'd be happy to not only connect there, but you can message me and be happy to have a communication, a dialogue there. That's easily where I prefer to make those connections, just simply because it's a convenient way of connecting and remaining connected.

He pronounces his surname Knecht, but actually it's spelled K-N-E-C-H-T. So if you're looking for Roger, that's how you get it. K-N-E-C-H-T. Of course, it's in the show notes. Roger, thank you for coming on the show and sharing your abundance with us. Also some really practical tips and a change in mindset about how we view the people that look after our finances, but also in terms of abundance and focusing on family, because there's no point in creating abundance in the family if there is poverty in the relationships at home. Thank you so much for coming on the show today.

You know, it was a pleasure, Jim. Thank you. And always remember this, if it's about accounting, it is universal.

It is. It's universal accounting indeed. Thank you, Roger. So thank you for joining Roger and I having a chat about numbers. And I have to confess, I don't often talk to my accountant because they're online and actually they don't really seem to want to talk to me. So it's really refreshing To have Roger on the show and find that really there are people who view numbers and the role of the financial advisor as being critical to the success of the company, not just critical to the success of their accounting practice. So thank you to Roger for giving us a mindset change there as well. If you've enjoyed this show, do please review it on your player and share it with a fellow unnoticed entrepreneur because We know that we don't leave anyone behind. And until we meet again, I just encourage you to keep on communicating. Thanks. Bye-bye. Roger's giving you all a wave. You want to say bye-bye, Roger?

Bye-bye. It's been a wonderful opportunity. Thanks, Jim.

Thank you for listening.