How To Trust Your Numbers
- By Shane Rau, Nexstar Network Accounting Coach
If you can’t trust your numbers, you can’t lead your business. But how do you get numbers you can trust?
As Nexstar Network’s only Accounting Coach, I’ve been fortunate enough to be able to work with a ton of different home services companies—big and small, new and old, big market and small market. All businesses in the skilled trades are different, of course, but they’re all similar in that they need to trust the numbers that they’re looking at.
That’s where I come in. Over the years, I’ve noticed five key topics that come up time and time again on my coaching calls.
1. Financial Structure: Getting the Foundation Right
Before you analyze performance, your financial structure has to reflect reality.
That means—to begin with—you need:
- Proper departmentalization
- Clean chart of accounts
- Clear reporting alignment
If your financial structure is off, every decision based on it will be off.
2. Balance Sheet Review: Where Issues Hide
Most owners live in the P&L. But attention should be paid to the balance sheet; that’s where lots of problems quietly sit.
A proper review of your balance sheet will look at:
- AR (Accounts Receivable) and AP (Accounts Payable) cleanup
- Payroll liabilities
- Old reconciliations
- Misclassified items
If needed, you can get virtual cleanup support to get your books back to “trustworthy” level.
3. Operational Accounting: Fix the Daily Process
After financial structure comes process. An effective daily process builds strong, consistent, efficient teams.
Common focus areas include:
- Purchase orders & material recognition
- Payroll accruals (especially 3- and 5-payroll months)
- Clean, repeatable month-end close procedures
Efficiency in accounting drives confidence in leadership.
4. Month-End Close: The Most Overlooked Discipline
Most companies think they’re closing the month. The truth is that they’re not fully closing it.
A true close means:
- Materials in the correct month
- Payroll accrued properly
- Large purchases amortized correctly
- Reconciliations clean and current
If this isn’t happening every month, your numbers will mislead you.
5. Monthly Financial Review: Turn Data into Strategy
Once your books are clean, a proper analysis can be done.
During your monthly financial review, identify:
- Margin trends
- Labor efficiency issues
- Overhead creep
- Cash flow concerns
A proper monthly financial review with clean numbers will help you fix issues in your business, not uncover them.
The Bottom Line
Accounting isn’t bookkeeping. It’s building a financial operating system that gives you clarity, confidence, and control. When the numbers are clean, you can trust what they’re telling you. And when you trust your numbers, leadership gets easier.
Join Us!
Ready to dive in and learn how to trust your numbers?
Our Financial Management Workshop takes place May 19-21 in Minnesota. With Shane’s guidance, Nexstar members will learn how to effectively manage profit and loss, balance, and cash flow statements.
Here’s what to expect:
- Learn how to efficiently close monthly financials.
- Practice providing in-depth and interim financial reporting.
- Leave class with boosted confidence and the ability to use your financials to make better business decisions.
And If you’re an independent PHCE home services contractor interested in learning more about Nexstar’s mission to help the world’s best tradespeople become the world’s best businesspeople schedule your call today!
Shane Rau has been working for Nexstar since 2013. He enjoys working with members to implement the processes and procedures necessary to produce timely and accurate financial statements. He helps members understand and review their company’s financial information so they can make the best possible decisions.
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