The difference between those who are successful at building permanent wealth and those who aren't usually comes down to how they use their resources.
This week I'm going to share a resource that many business owners and investors avoid – REPORTING.
It's always amazing to me the number of people who think they don't need reporting in their wealth strategy. Some think they will be so successful that they don't need a report to tell them that. Others think that reporting is just for their accountant to do their taxes. And, others think they aren't big enough to need reporting.
Whether you have 1 employee or 100, whether you have 1 rental property or 50, whether you invest in options, tax liens, or oil & gas, you need reporting.
What is Reporting?
Reporting is summarizing activity in a clear and concise format. Most importantly, the information in the report makes sense to you.
When done correctly, reporting is a valuable resource that helps you make timely business and investing decisions and saves you time while doing so. Reports provide tremendous leverage.
Do the Reports You Get in Your Wealth Strategy Make You Cringe?
Now, be honest. Did you cringe at the mere mention of reporting? I'm sure some of you saw the word reporting and immediately began trying to convince yourself you don't really need it.
I find that most people avoid reporting, even though reporting can be a huge resource in their wealth strategy – one that allows them to leverage their time and other resources.
Why would someone avoid something that helps them accelerate their wealth?
There are several reasons I hear:
It's too difficult to understand
It takes too much time
I don't know how to set it up
I don't really know what it means
If your reporting isn't set up correctly or at all, the above are all true.
What Reporting Is NOT
Many business owners and investors get reports that they don't understand – and it's not their fault. Most reports are either too technical or are missing information to give the reader the insight they want.
Have you ever been handed a balance sheet and income statement from your accountant and been told that this is your reporting?
When you look at these reports from your accountant, do you scratch your head and wonder what you are suppose to do with these reports?
Do you file these reports as quickly as possible, hoping to never see them again?
While reports like your balance sheet and income statement can be helpful, particularly when it comes to tax planning and preparing tax returns, they are not the most useful reports when it comes to providing you with information that will help you grow your business and wealth.
What Reporting Should Be
Reporting should report the activity YOU want. There are no specific rules that must be followed – it is based on facts, figures or data you want to help you make decisions to grow your business and your wealth.
Often, with a few changes, struggling wealth strategies can be turned around and become quite successful in a surprisingly short period of time simply by making better use of resources.