[00:00] You can buy another app, join another program, add another system to your business, but if the financial foundations underneath aren't in place, more strategy can create more noise instead of more clarity. So I've had lots of conversations recently about women being sold the advanced layer before their basics are actually working in their business.
[00:24] They're spending large amounts of money trying to grow, automate or fix their business, but the information underneath those decisions really isn't complete. It's not current and it's not being reviewed.
[00:38] So then they wonder why they're still feeling stressed and overwhelmed by numbers or their money. And so I want to be really clear, this isn't about blaming women for not knowing what nobody has really actually taught them properly. So this is about building things in the right order.
[00:54] So welcome to the Erin Davis show. I am Erin Davis. I am a business money coach. I am also an accountant. I help women understand what's happening with their business money, and they Can make sense of money, make informed decisions without the shame, the panic, or the financial jargon.
[01:12] So this episode I'm gonna talk you through four financial foundations I believe every business owner needs before she adds another tool, adds another strategy, or another layer of complexity. And the and if this is exactly what you need help with putting in place, uh I have a new course that's releasing very soon.
[01:32] It's called the Business Money Foundations. We actually start next week, Tuesday, the 27th of October. It is a really practical six week program where we build these financial together, these financial foundations together one step at a time, and I'll tell you how to join at the end of the episode.
[01:51] But before we get started, or as we get started, uh I just want you to know that investing in your business is absolutely the way to go. This is not about adding more to your plate, but rather making sure that your um business.
[02:10] foundations are set so that you can scale so that you can grow and so I'm having lots of conversations at the moment with women who are you know they're really excited about their business and and maybe their business is working really well they've got money coming in money going out clients they've got lots on their plate they're busy um but they are finding that they're just overwhelmed with this financial part of their business and so this isn't about finding an advanced solution um it's really about looking at the financial foundations that are underneath what is going on and I am finding that they're not complete.
[02:54] These financial foundations are really such important pieces to the puzzle and I am seeing women get all excited about starting a business maybe they've been in business for a little while and Things are just getting added on.
[03:11] They're doing things very reactively. They're just doing things as they need to, but that sense of overwhelm, that sense of stress is really quite full on, and it is causing that underlying pressure, the underlying overwhelm, the underlying just heaviness that it is all just too much.
[03:35] And I know that we all have so much going on in our daily lives. You know, we're we're running businesses, we're running a household, we're running families, kids, partners, whatever that looks like. There's a lot of responsibility that falls onto our shoulders, and when you add this on there as well, the financial foundations are absolutely crucial to take that pressure off.
[03:58] And I am seeing that we are being sold new platforms, new funnels, new coaches, automations, AI, pricing strategies, sales systems. You know, there are so many different tools out there that.
[04:13] When you are looking at them, they all sound amazing. They all sound like they are the thing that is going to solve all the problems in the business. And you know, these are very useful, but they can't compensate for these missing or unreliable financial foundations.
[04:34] This promise that they give you that they're going to make business easier, it's going to make sales happen, it's going to automate everything. You know, if you are not understanding the foundations, you're not seeing what the foundations should be, uh, then just adding more layers onto it just adds to the pressure.
[04:58] And information about money can feel really scattered, it can feel out of date. If you are not keeping things up to date, then How can you be making decisions about your business, about the future of your business if you don't have the correct information to actually make those good decisions.
[05:20] It's about what can the business afford, where should your attention go, what needs your attention, and these things when you are buying ad hoc solutions because it's very much shiny object syndrome, looking at well, oh that looks good, or they're doing that, or you see all of these things on socials about everybody doing everything, and you know the temptation is there, and I have experienced it thinking, oh, there must be a missing piece, I must be missing something.
[05:49] So if I just get this, then that'll solve all my problems. The thing is though, that we need to make sure that what we are buying is actually the solution that we need, and so this is not about uh saying no to any solution at all, but it's about Being selective because these tools can be super expensive.
[06:14] There are lots of moving parts and they add a lot of pressure. And especially if you are adding them into the business in the wrong order. So you don't need to feel ashamed that you haven't built the financial foundations yet, but you do need to stop expecting that the next shiny object will do the job of the financial foundations.
[06:38] And before the end of this episode, or by the end of this episode, I'm going to give you four simple Um I items. It's a four-part check that you can use before you make any business, any purchase in your business going forward.
[06:54] And this is this is such an important piece because I am seeing so many women who are just ad hoc adding things in. And so the financial information is often treated as the afterthought instead of the core piece to running your business.
[07:15] I am seeing transactions being recorded late, they're across mixed accounts, uh, or it's left for somebody else to figure out, and that figuring it out at tax time means it's too late.
[07:31] You're not getting the information on a timely basis, so you can make decisions. We have software available to us, but there is no consistent process for keeping that information current.
[07:45] We're paying for software that doesn't automatically create useful records. The reports generated are incomplete, or you know, they're poorly organized and they can create false confidence for women and more confusion.
[08:03] And I think this is why the first foundation is not. Actually having fancy dashboards, having uh all the bells and whistles, it is actually about reliably recording all of your business transactions.
[08:21] Now this may seem pretty basic, but I am seeing so many women who are not looking at the rec record keeping as an important part of their business. They have piles of paperwork, they have receipts all over the place.
[08:36] You may have them shoved in the bottom of your handbag, or your inbox is just an overflow of receipts and mess, and there's no structure coming in there. And the way I create my structure within my inbox, I have a folder called receipts, and I have a sub folder for each year.
[08:56] And I've been doing this for a number of years now. So 22, 23, 24, 25, 26, and now one for 27. So any receipts that I get emailed to me. get automatically filed into the 2027 sub folder so that I know if I am looking for a receipt for my business I just go to that 27 folder because it's the the financial years for me 2027 and that means 30 June 2027 I will find the receipts in there it's easy when you do it straight away so as soon as a receipt comes in it gets emailed I automatically put it to that folder in my inbox there are ways that you can automatically send that straight through to say something like Xero where the receipt is filed with the transaction but the thing is that recording properly knowing where your receipts are being able to access them access them and Allocate them correctly within your software is such a huge piece because you can't generate any reports.
[10:11] You can't look at anything if you are not collating your receipts properly. So you can have a tool to support you, but you actually need the money system before that to make sure that you are organized.
[10:26] You need to make sure that you are recording things correctly, you're organizing it, you're making sure that everything has a system and a process. And I know that systems and processes can feel really boring and overwhelming for a lot of us, and especially when we're busy, we've got so many other things to do that this part of it just gets left by the wayside, and you know, we'll come back to it later, or when we're not so busy.
[10:54] But the reality is that we're always busy, right? We always have things to do and always have things on the go, and so we are always going to be busy. And so the tool that you use is just a support system.
[11:09] It is not your whole money system. We also need to have we need to make sure that once we have things organized, we are reconciling timely.
[11:26] We are doing it all the time. I do my reconciliations look every single day. It takes me five, ten minutes. I don't have a heap of transactions coming through my business. So it doesn't take me very long. But at minimum, you should be doing it at least once a week.
[11:42] I know what's coming and going in my bank account. I know where it's being allocated. I quickly report, but I can do that because I know that everything in my file is reconciled, it is up to date.
[11:56] I know that my bank rec is okay. I'm not just leaving to be automated and forgetting about it. I see so many um autocoding. Errors people are just letting AI do everything and they're not understanding it, or they have a mess and a system that just looks like a dog's breakfast.
[12:18] That how could you possibly know what is going on in your business if you don't have these things set up? And I get so frustrated with seeing smart women, capable women running businesses who don't have these financial foundations in place.
[12:37] These are really basic things that we need to get sorted. We need to understand them so that you can show up in your business and not worry about the money, not stress about it. You actually know what is coming and going.
[12:51] And so we can produce reports, but the next part of that is actually understanding the business. So if you don't have good records, if you don't reconcile often, if you don't uh keep on top of that, you can't possibly run a report.
[13:07] But then let's just assume you've done all of those things and then you run a report. You actually then need to understand what those reports are telling you. What does a profit and loss tell you? What is your bank account balance tell you?
[13:22] What reports do you need to know or run to see what future payments are coming or going? What do you need to look into further? What needs your action? And this is about creating a rhythm.
[13:38] So regular reconciliations. Once a month I do a deep dive and have a review of what happened last month. I make sure that all of my invoices are in, all of my expenses are in, but then I actually compare it to last month, the same period last year.
[13:55] I future cast and look at well what are my expenses coming out in the next month? What does my income look like in the next month? That's where we can start to do some projections and start to be on top of these things that.
[14:13] We can then start to make some informed business decisions. So rather than just getting attracted by the shiny object syndrome, or this thing or fix this, or you need to be doing this in your business, you need to have all of these things. We spend so much on marketing, on AI, on sales, all of those things.
[14:33] But if we don't actually have our financial foundations set up and sorted, it doesn't matter what fancy system your new fancy coach is going to provide, it's all gonna fall over.
[14:48] We need to build strong financial foundations because if you grow and scale by implementing their shiny new things, and all of a sudden you find yourself with an abundance of clients and abundance of money, you are gonna find yourself in a world of pain because you might be able to wing it for a while.
[15:08] But you're gonna get caught out with tax. You're going to get caught out with, oh, I've suddenly got all of this money in my account, I'll do this, this, and this, but forget about these other things that you need to do. And so we need to know what's coming up, we need to see recurring patterns, we need to see what costs are there.
[15:27] And this is not something that you need to obsess over every single day. When you have a beautiful rhythm and a flow happening, you know that the system is working, and this is what I teach in my business foundations business money foundations course.
[15:44] It is about setting up the foundations so that they can run and you just know when you need to review. And so this constant rhythm reduces that last minute scramble. It reduces the oh, I don't know what to do, I'll just, yeah, it all looks good, I'll just do it.
[16:03] You actually have some planning, you have some idea about what you need to be doing first, what that needs to look like, and you can make those decisions with confidence rather than on a whim hoping and praying that it is all going to work out okay.
[16:21] And so so far we have um the information being recorded and we have a rhythm for reviewing it. The next part is where many business women actually become unnecessarily complicated.
[16:34] And so this is where we start to um think about all of those shiny object syndromes happening. We create overlapping apps or duplicating information, we've got clunky processes, and we need to start with the job that actually needs to be done.
[16:57] So choose the simplest tool that supports you. We don't need to overcomplicate things. We need to ask a few questions when we're looking at the tools or different programs or different solutions out there, there are a few things that you need to ask yourself.
[17:15] What exactly will this tool do for me? What information needs to go into it? Because if you put rubbish in, you're gonna get rubbish out. That's really important. We need to make sure that the information that is being produced is accurate.
[17:32] So if we are having overcomplicated systems that mean we miss part of it, we don't enter everything, or we make a mess of it, the information we're gonna get out of it is not going to be useful and it's not going to be helpful.
[17:47] So what information needs to go in? Who will keep that information current? Like whose responsibility is it? Now, as a business owner, we have to wear all the hats. We're the marketer, where are the sales, we are doing the finances, we're doing absolutely everything.
[18:05] And there comes a point where you can outsource some of these things. The thing I say to my clients is though that you still need to understand what's happening. We can't outsource our responsibility 100%.
[18:19] As the business owner, we need to know what is actually going on in our business. So we don't have to do all of the work, but we need to understand it. We need to be able to check it and make sure that we're holding other people accountable that they are doing the right thing.
[18:38] Because this is your business, it is your responsibility. The next question you need to know is after who's going to keep the information current is when will I review it and what will it show me?
[18:53] Know these things before you start to go and implement all the tools, or just go and buy all the things that are out there. If you can't answer these things, then that tool that you buy is going to add to the complexity, it's going to create more confusion rather than clarity.
[19:14] And the goal here is not to have a perfect technology stack. It is a it the goal is to have a stack that is usable, it is user friendly, and it meets you for where you're at right now.
[19:28] There are so many things out there that will overcomplicate, and you don't need them. You don't need those things right now. Maybe in the future you might need them, but if it doesn't provide the clarity, it doesn't add simplicity, it doesn't create time and space, then really what's the purpose of having that tool in your toolkit?
[19:52] And so more tools don't create more clarity when the foundations underneath. Are missing. And so I keep coming back to this piece that we need the foundations. If your foundations are strong, you can then start to add on as you see where the gaps, as you see where you need more information.
[20:13] But if you have messy foundations or shaky foundations, you're just gonna keep adding things on and keep stacking things on, and all of a sudden you have this piecemeal approach, and it's a mess.
[20:26] It creates a whole heap of mess and stress and worry. And I can't reiterate this enough that before you start spending thousands and thousands of dollars on business coaches and systems and tools and all the things, financial foundations are so crucial that we need to give it the attention that it deserves.
[20:50] I am just seeing so many women overwhelmed and stressed by their money. Because they don't understand it. They step into a business and they think, yeah, they'll do it. It's all good. I can I can manage this, it'll be all okay. But nobody's ever shown them how to do it.
[21:05] Nobody has ever taught them what they need to look at, and what these foundations need to be. And I can tell you that if you get your foundations right, you can grow, you can build, you can scale to sell, to step back, to bring somebody else in so you can buy back some of your time.
[21:25] But if you don't have these foundations in check, oh my gosh, you are just setting yourself up for unnecessary stress and overwhelm. And the last part of this um is these four foundations that you need to check, right?
[21:44] Okay, I am going to go through the four foundations that you need to check so that you can build your system. And I would build that build it in this order. You need to record, organize, Review and decide.
[22:00] So I'm going to go through each one of these foundations. Record is the business money information being captured consistently. Are my records up to date?
[22:13] Can I rely on them? Are they current? Is there a simple process that doesn't depend on entirely on me having to remember everything? I don't know about you, but I am at capacity most of the time, and my brain has so many things to remember.
[22:32] I just don't want to remember this stuff as well because I'm likely to forget. So your record of your money situation needs to be a process. It needs to be simple, it needs to be current, it needs to be up to date, and is everything being captured consistently.
[22:52] The next part is organized. So can you see? Where your money has jobs within your business. Where does the money need to go? What are your obligations? What are your operating costs?
[23:05] What are your owner payments? Are you paying yourself correctly? Are these payments visible rather than just guessing them all the time? Do you know where all of this important information lives?
[23:19] Like we want to get it out of your head and we want to create systems and processes. What if something happened to you and somebody else had to step in? How are they going to know what your business needs if it is all in your head or it is a mess all over your desk and information is all over the place?
[23:38] So you need to get yourself organized, you need to create the system that builds that foundational organization so that you can, as you scale, and we keep coming back to this, as you scale, you have got the systems in place.
[23:55] The next part is review. So we have do we have a weekly review rhythm? Do we have a monthly review rhythm? Do we have a quarterly review rhythm? We don't want to just wait until tax time to start looking at things.
[24:09] This is how you build strong financial foundations. You review, you do the work, you record it, you organize it, and then you review it. Is it once a week? Is it once a month? Is it at BAS time once a quarter?
[24:25] Or are you leaving it to the end of the year? We're looking for patterns, we're looking for recurring costs, what's coming next? And do you know what the reports mean and how they can support you when you are making your decisions?
[24:42] So the next part is decide. You can't decide if you don't know what you're looking at, and that's where that review part comes in. Which reports answer your questions. So look at um what information do I need in order to choose the next step?
[25:02] Can you tell when the business can afford something before actually committing to it? And when I mean can you tell whether the business can afford it? It's not just about looking at the bank account. Do I have money in the bank account?
[25:15] We need to be forward looking what's coming up, what's going out, what are we expecting, what are we projecting, can you tell whether we can afford it without just looking at the bank account?
[25:29] Do you need a bookkeeper? Do you need your accountant? Do you need somebody else to come in and help you with these things or what information do you actually need in order to make these financial decisions?
[25:44] And so what you have built up until now has got you to where you are now. But if you are wanting something different, if you are wanting your business to scale, to move, to improve, to feel less.
[25:59] Like you've just bought yourself a job and money is flowing easier and smoother, and you're understanding it, then financial foundations are absolutely crucial in order to create that beautiful flow and rhythm.
[26:14] And I would suggest that it is actually the missing part to take you to that next growth level. And so this business money foundations program that I have built built is this. It is about setting up these financial foundations, getting really practical, using my accounting skills and knowledge to be able to help you set these financial foundations up so that you can feel like you're actually creating something that is really connected and cohesive, rather than uh all over the place, haphazard, no rhythm, no structure.
[26:53] You're just running very reactive by the seat of your pants all the time and not actually in control of this. The Business Money Found, it is a six week program. We have group coaching calls every week.
[27:10] There is a portal with tools. I have built the tools that will support you, not the shiny objects that everybody is out there promoting and you not understanding it. I will show you how to use the tools and how they can support you in your business.
[27:26] And then we are going to create these beautiful ecosystem of financial foundations that you know will support your business. It will create the ease, it will create the rhythm, it will allow you to make really informed decisions.
[27:42] This is not about doing the bookkeeping. It's not about providing you with tax advice or financial advice. It's about you taking back control and stopping with the overwhelm and letting somebody else take control of it.
[27:58] So financial foundations for women. If you're under thinking that this is the missing piece that you need, this is exactly why I created it because I see women running businesses, they are turning over a lot of money, they have got momentum, yet the foundations are shaky.
[28:20] They have got tax bills, they don't understand what the tax implications are, what the recording is, what the simple processes, the simple way to do things, and they are overcomplicating everything. And so your business doesn't need another layer of complexity before the basics are working.
[28:38] It needs financial information that you can actually rely on, that you can create a rhythm with for reviewing it and making decisions that you feel confident about. And so I want you to have that confidence, and then I invite you to step into The Business Money Foundations program.
[28:58] So as I said, we start next week, the 27th of October. It's really practical. I hope that this information has been useful for you today. I just know with all of the conversations I am having, these financial foundations are the thing that will move your business forward.
[29:20] They are the thing that will provide you with less stress, less overwhelm, more clarity, more confidence, and you will step away feeling empowered, like you are the one leading your money instead of being reactive all the time.
[29:35] So I will put the links in the show notes. Send me a message, connect with me because as I said, financial foundations, these are the absolute backbone to creating a successful business.