Accounting and KPIs for Entrepreneurs from Universal Accounting’s Roger Knecht

In this episode of the 0 to 5000 Podcast, host Drew McClure sits down with Roger Knecht, president and CEO of Universal Accounting Center, to dive into the often-overlooked world of accounting as it pertains to business growth and profitability. Roger shares his journey from communications and sales to becoming a leading figure in accounting education, offering vital insights for business owners on the importance of KPIs, interpreting financial statements, and evolving one’s business model to stay profitable. Roger breaks down common misconceptions business owners have about accounting services, explaining the distinctions between bookkeeping, tax preparation, and CFO-level strategy. He emphasizes the importance of tracking key performance indicators (KPIs) and leading indicators to foster proactive decision-making that drives growth. Roger also discusses the concept of "necessary endings," shedding light on the challenges and opportunities that arise when business owners let go of legacy products or services to align with current profitability goals. This episode provides actionable advice for entrepreneurs who want to leverage their accounting knowledge to build a robust, sustainable business.

Key Takeaways:

• KPIs and Leading Indicators: Roger highlights the significance of leading indicators and how tracking them allows business owners to take early action, creating a direct impact on lagging indicators like revenue and profit.
• Distinguishing Accounting Services: Many business owners misunderstand the services they receive from accountants. Roger explains the differences between bookkeeping, tax preparation, and CFO services, urging owners to know exactly what they are paying for and to seek guidance on strategy rather than mere compliance.
• The Value of Accounting in Decision-Making: By interpreting balance sheets and income statements effectively, business owners gain insights into trends, seasonality, and opportunities for growth. Roger emphasizes that accounting is the "language of business," essential for sound decision-making.
• Creating a Culture of Engagement: For those managing teams, Roger shares strategies to inspire employees beyond the 9-to-5 mentality, motivating them to invest creatively in the company’s success.
• Learning from Failures and Necessary Endings: Roger discusses the hard choices business owners face, like closing divisions that are no longer profitable. This "necessary ending" approach allows companies to refocus resources on high-impact areas.

Notable Quotes:

• "Whatever you measure improves; whatever you measure and report will accelerate the improvement." – Roger Knecht
• "The language of business is accounting. Think of it like a foreign language—if you’re not fluent, you need a translator to understand what your business is telling you."
• "How do you get more people to buy more from you, more often? That's the ultimate question for growth."
• "There’s a difference between being a great accountant and being a great accounting entrepreneur. Running a business takes a different skill set."