Featured Coaching Excerpt - Notes & Transcript, Part 1
Lesson Nugget: Understanding the definitions of these accounting terms increases your potential power and better equips you to thrive in the business world.
Account: A collection of financial information grouped according to customer or purpose. For example, if you have a regular customer, the collection of information regarding that customer's purchases, payments, and debts would be called his or her "account."
Lesson Nugget: In order to create more business in the future, keep careful record of every account that you work with. This will allow you to consistently market to them throughout the year.
Ask Yourself: Am I currently keeping track of the purchases, payments and debts of my clients? And could I produce these accounts quickly if required?
lynda.com of accounting and time management
-My name is Caleb Taylor, and I'm one of the hosts here atT hrive15.com, the online platform that provides training in marketing, branding, networking, and time management. Today I'm going to be sitting down with ClayClark, the pale visioneer of thrive15.com. He's going to be making sure we understand the definition of the account and why it's important for you to truly understand it. Here at thrive15.com we believe that knowledge without application is completely meaningless, so as you're watching always ask yourself, how can I apply this to my business or my personal life? If not, today's episode could be more meaningless than taking pictures in the dark.
All right, clay, we're here talking about some accounting and financial issues.
-I would rather be here right now with you then to not be here with you. I mean that. I really enjoy being with you.
-I love being with you. It's beautiful. And what we're going to be talking about today is just-- that is what gets me out of bed. Specifically defining the account. And the reason we're doing these in five minute bursts is for you to understand these definitions. It's important for everybody to understand this.
-Real quick. They say that knowledge is power. Knowledge is power. I would say that knowledge is only potential power, and we need to have a mastery of these words. Just the other day I was at Church and my pastor is talking about the firmament, which is this water dome that surrounds the planet-- allegedly-- back in the time of the creation of the planet. The flood time. The time of Noah and the flood. Apparently there was this water dome called the firmament. What am I talking about? The point is he's using the word firmament in service and I'm going, permanent? Is he saying permanent? Is he saying perm? Who get a perm?
-I'm getting all upset. The pastor's talking about a perm? No. Well, I end up looking it up. Firmament. And I'm thinking, is he talking about fermenting grapes? Fermenting grapes? He's talking about Noah. What's he talking about? I look it up. Boom. It's a water dome that people believed surrounded the Earth's atmosphere back in the day. A lot of times people hear the word account and they're like, account ah, ah, ah. They don't know what it means. So we're going to get into, what does this word mean? And that way you have power. It's not potential power. You have power. So when you're in your next meeting, and someone's trying to bully you, and trying to take advantage of you in a business deal, you'll know what they're saying. We need to know these terms and master them.
-Good. So this definition is a collection of financial information grouped according to customer or purpose. For example, if you have a regular customer, the collection of information regarding that customer's purchases, payments, and debts would be called his or her account. A written record of an account is called a statement, by the way, which we will explain in a later episode. So go ahead and break that down for us a little bit more here.
-OK. Let's just say that-- for my first business it was called A DJConnection, and I had this lady named Jamie Jackson. Jamie Jackson, if you're watching, hehe, jam out.
-Wow, that was wonderful. Did you guys communicate that way?
-That's how it is. It's like hehe.
-Is it like a whale call?
-Ow! That's what we'd do.
-She's a cheerleading coach. What would happen is I would mix music for Jamie Jackson. Well, Jamie Jackson, I put her into a system I called paint-- Microsoft Paint-- because I didn't know about this word account. I didn't have a database, didn't have any software, I had this thing called Microsoft Paint, so I would type her phone number into Microsoft Paint and print her a receipt thinking I'm the man. Well, then every about year I would discover that Jamie Jackson was coaching another team, and sometimes I would remember and sometimes I wouldn't remember to call her again.
-Well, so sometimes I would get the business and sometimes I wouldn't. Well, now today though, if you buy something from me one time-- one time to quote Wycliffe John. One time. If you hear from me, if you buy something from me one time, then I am going to market to you consistently throughout the year and keep record of the account of all of the transactions that you've ever done with me in the past.
-And so it's keeping track of that is what creates the account. That's the definition of an account.
-Yeah, I'm keeping track of all the payments, all the purchases, all the debts, and I'm able to say, Jamie Jackson. Hey, it's been about six months since we talked to you last. I saw that your team purchased this cheerleading mix, and I was curious if you were going to go ahead and use this again this year for the spring tournament like you did last year for the spring tournament.
-So was that the main reason why this is important and worth our time? Why is it that we've got to understand this definition?
-There's a guy who's about late 60s-- he's a doctor-- and he wanted to sell his medical practice. And if you're in the medical business there's a thing called the electronic medical records, and you're not allowed to share these with people because of certain laws. But the point is, he was like, all that information's in my EMR, in my electronic medical record system. So someone's trying to buy his business and he's saying, I don't have an account, I don't have a database, or I don't have the accounts of everybody. What I do have is the EMR.
Well, the guy who's wanting to buy his business is going, who buys from you, how often do they buy from you, how much do they owe you? I want to know that. I want to see the accounts. And he says, I don't have that. And I'm not kidding you, this guy, at a later age in life, he was not able to sell his business. He missed a one and a half million dollar windfall because he could not produce accounts. And I kid you not, the purchaser who I know closely decided not to buy his business because he could not find any of the accounts, which is, again, for the record, the customers' purchases, the record of their purchases, their payments, and their debts.
-You have to have that. You have to understand what the account means, and you have to keep these accounts. That's a great story.
-I could cost you $1 million and a half.
-You don't want that. Clay, thank you for your knowledge and your beauty. We appreciate you sharing both
-I appreciate you, and I want to say that when I look at you, I realize that that's what America's all
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