[00:00:00] EMMA: You can't make confident decisions with messy books, and that's exactly why I love Xero. I've coached hundreds of women, and some men, over the years, and some of the smartest, most capable business owners I know freeze when it comes to their financials. They're spending hours perfecting an Instagram post.
[00:00:19] They'll redesign their website. They'll buy another course. Ask them to open their profit and loss statement Suddenly the pantry needs reorganizing. I get it. There can be a lot of shame attached to finances, particularly for women. We tell ourselves we should already know how to read reports, how to understand accounting language, and know exactly what's happening inside this business of ours.
[00:00:46] Reading financial reports is a learnt skill. You learned marketing, you learned sales, you learned how to work with clients and lead a business, and maybe lead a team. You can learn this too. Each time you look at your finances, they [00:01:00] become a little more familiar and a little less intimidating. Today, I wanna share one simple practice that has made a massive difference in our business over the years.
[00:01:09] First of all, I use Xero. Now stay with me. Don't nod off, because this conversation goes well beyond bookkeeping software. It's actually about visibility. You need to see what's happening in your business so you can lead it properly. If you're still running your business finances through a spreadsheet, take a moment to consider whether it's keeping up with your business.
[00:01:32] It's not. Spreadsheets can be useful in the early stages, but as your business grows, your financial systems need to grow with them. For me, Xero does that job. There are plenty of accounting software packages available, and Xero, for us, works beautifully for the way that I run my business. The investment has paid for itself many, many times over because I can see what's happening with all of my [00:02:00] money, all of our accounts.
[00:02:01] I see it every week rather than waiting until tax time. That regular visibility gives me a sense of calm. I know what has come in, I know what has gone out, and how each part of the business is performing. Business owners who feel financially calm usually have a very clear understanding of their numbers.
[00:02:22] That's what I've discovered. So one of my favorite things about the way I've set up Xero is how I can track revenue. Rather than having one giant line called sales or trading income, I've separated my income into the main revenue streams for our business, for the Emma McQueen business. So I have one line for Thriving Women.
[00:02:43] I have a line for one-on-one business coaching. I have a line for my corporate work as well, right? A line for events. Every dollar that comes into the business is allocated to the right revenue stream within [00:03:00] Xero. It's really simple, but it gives me the insight, and it's incredibly useful. And every Friday, I jump into Xero, financial Fridays, and I look at the numbers.
[00:03:11] How much has come in for Thriving Women? How are our events tracking? Is the corporate work stronger this month? Do I have enough one-on-one clients, or have inquiries slowed down? And within a few minutes, I have a pretty clear snapshot of my business and what's happened. I can make decisions based on what the numbers are telling me, what the data is, so I don't actually have to rely on how busy I feel.
[00:03:35] Because if I feel busy, maybe surely we're profitable. No. Busy and profitable, two separate things. Some business owners work incredibly hard and still aren't making enough money. Your numbers give you the information you need to change that. We need to look for the patterns. I also use Xero to compare different periods.
[00:03:55] So at the end of each month, I do it. You could do a quarter. [00:04:00] I compare the results to the previous month or the previous quarter. Are they going up? Are they going down? Where did the revenue come from? What's growing? What's slowing down? What's changed? And if I do this every week, I stay ahead of the curve.
[00:04:13] And at the end of the financial year, I compare the year that was with the year that was before. Now, I've got nine years' worth of data now, so it gets super interesting, right? And you might discover that an offer that you thought was performing really well has been declining for several months. You also might find that one of your services has become your strongest revenue stream.
[00:04:34] The patterns are there. The data's there. You need to look at the numbers to actually see them. And once you can see those patterns, you can make clearer decisions about where to put your time, where to put your energy, and where to put your money Now, accrual and cash. Let's talk about something that confuses so many business owners.
[00:04:55] When you look at profit and loss, there's two kinda toggles: accrual [00:05:00] and cash. Inside Xero, you go into the reporting, you open your profit and loss statement, change the date range in the top left-hand side to this financial year or this month, hit Update. Next to the Update button, there is a More button with three dots.
[00:05:13] It has, like, radio buttons. You'll see accrual and you'll see cash. You can toggle between the two. Accrual is based on invoices. When you invoice someone, that income appears in the report even if the invoice hasn't been paid yet. Your accountant will often work with this view, especially at tax time. Cash, if you toggle to cash, shows the money that has been received by your business.
[00:05:39] So for my weekly check-ins, I find the cash view easier to understand because it shows me what has moved through the business and almost matches my bank account. Both views are useful, and they tell you different things. Accrual supports accounting and compliance. Cash gives you a clearer picture of the [00:06:00] money that has been received and spent during that period.
[00:06:05] If that's all you take from that, my job is done. Plenty of experienced business owners find this really confusing. You are not alone. And if you've ever switched between the two reports and wondered why the numbers have changed, you're in really, really good company. Many business owners, many only open Xero when their accountant or bookkeeper asks them for something.
[00:06:26] I have one client who has started Financial Fridays because they didn't look at their books for 18 months. That creates a huge gap, huge gap between what's happening in your business and you understanding it. Imagine trying to understand your health by checking it once a year. One annual snapshot gives you very little information about what happened during the other 364 days, right?
[00:06:48] Your business finances work in a similar way. So I spend around 30 minutes, maybe an hour, on a Friday looking at my numbers. Financial Friday. I go get a coffee, look at my numbers. I do it because I [00:07:00] value the certainty, and I wanna catch things early, and I notice trends before they become bigger problems.
[00:07:06] The numbers give me information. I use that information to ask better questions and make better decisions. Financial confidence is your job. You can get financial confidence. You can leave the accounting to your accounting Your accountant helps with tax and compliance and financial statements and all of the technical pieces that come running a business.
[00:07:30] And if you ask them a question, I'm sure they'll answer the question, but it's your responsibility to understand your business finances. Yeah? Financial competence means knowing enough to ask good questions, recognize the patterns, and make informed choices. You need a working knowledge of what's coming in, what's going out, and where the business is making money.
[00:07:51] PS, check out your subscriptions. Ugh. The knowledge puts you back in the driver's seat. So here's your challenge for this week, [00:08:00] my love. If you're using spreadsheets, ask yourself whether they still meet the needs of your business. Have a conversation with your bookkeeper or your accountant, look at Xero or another accounting software tool, and find a system that gives you the visibility that you need.
[00:08:18] If you already use Xero, open your profit and loss statement this week. Look at it with curiosity. Could your revenue be separated into more meaningful categories? What are your numbers telling you? Where is your business making money? Which offers are growing? And which ones might need your attention?
[00:08:36] Choose one number to understand properly. It could be your monthly revenue expenses, or your fixed expenses, or your profit margin, or your average client value. Then book five minutes in your diary each week to check it. Confidence comes from action. Each Friday, join me. Spend half an hour, an hour on Financial Fridays.
[00:08:59] Look at your [00:09:00] numbers, which will help you feel more informed and much more confident. You begin making decisions from a place of clarity. Women who understand their numbers price with more confidence, I promise. They negotiate differently, and they make stronger decisions about their time, their offers, and their sustainable growth.
[00:09:20] Open the report. Look at the numbers. Ask good questions. Because you know what? Cash is queen, ladies. Cash is queen. See you next week. Thanks for listening to Tea with the Queen. If you've enjoyed this podcast, please leave a rating and review on Apple Podcasts. It really does help to get the word out. For more about me, please visit emmamcqueen.com.au, and I look forward to your company next episode
