The following is taken form a Thrive15.com training, one of the most affordable business schools in Florida. We sit down with Caleb Taylor and Clay Clark, the palest entrepreneur in the world who is also the US Small Business Administration Entrepreneur of the Year.
Caleb: All right Clay, we're here talking about some accounting and financial issues.
Clay: I would rather be here right now with you than to not be here with you. I really enjoy being with you.
Caleb: I love being with you, it's beautiful. What we're going to be talking about today is just that is what gets me out of bed, you know? Specifically defining the account.
Caleb: Okay. The reason we are doing these in five minute bursts if for you to understand these definitions, it's important for everybody to understand these.
Clay: Real quick. They say that knowledge is power, knowledge is power. I would say that knowledge is only potential power. We need to have a mastery of these words, okay? Just the other day I was at church and my pastor's talking about this firmament, which is this water dome that surrounds the planet. Allegedly back in the time, you know, of like the creation of the planets, 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 "What, permanent? Is he saying permanent? And is it perm?" Who gets a perm?"
Clay: I'm getting all upset, the pastor's talking about a perm. Looking it up firmament and I thinking is he talking like about fermenting, is it grapes, is it fermenting grapes? He's talking about Noah, what's he talking about? I look it up, boom, it's a water dome that people believe surrounded the earth's atmosphere back in the day.
Clay: Know what I'm saying? A lot of times people hear the word account and they're like a count, ah, ah, ah. They don't know what it means. We're going to get into what does this word means and now you have power, it's not potential power, you have power. You're in the 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, master them.
Caleb: Good. 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'. This is a written record of an account, it's called a statement by the way, which we will explain in a later episode. Go ahead and break this down for us a little bit more here.
Clay: Okay let's just say that, for my first business it was called A DJ Connection.
Clay: I had this lady named Jamie Jackson. Jamie Jackson if you're watching, hee hee jam out. That was wonderful, I do that all the time,.
Caleb: Did you guys communicate that way?
Clay: That's how, it was just like hee hee jam out.
Caleb: Did you have a whale call?
Clay: OW, that's what we did.She was a cheerleading coach. I would mix music for Jamie Jackson.
Clay: 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. I would type her phone number into Microsoft Paint and print her a receipt, thinking I'm the man,
Clay: Then every about a 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.
Clay: Sometimes I would get the business and sometimes I wouldn't. Now today though, if you buy something from me one time, one time to quote Wyclef John, one time, if you hear from me, if you buy something from me one time 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.
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Caleb: So it's keeping track of that is what creats the account. That's the definition of an account.
Clay: 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 us again this year for the spring tournament like you did last for the spring tournament."
Caleb: Is that the main reason why this is important and worth our time?
Caleb: Why is it that we've got to understand this definition?
Clay: There's a guy about sixty, late sixties, he's a doctor and he wanted to sell his medical practice. 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.
Clay: The point is, he was like "I know all that information's in my EMR, in my electronic medical records system." 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." 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." 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. 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 customer's purchases, the record of their purchases, their payments and their debts.
Caleb: 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.
Clay: It could cost you a million and a half dollars.
Caleb: You don't want that. Clay thank you for your knowledge and your beauty, we appreciate you sharing both.
Clay: I appreciate you and I want to say that when I look at you I realize that that's what American's all about.