“Navigating Your Way Through Financial Data”
By Cortney Steinbacher
On April 20, 2022 I was driving to a Prometric Testing center in State College, PA to take my CPA exam. The testing center is near the main campus of Pennsylvania State University and about an hour from my childhood home. I have visited this testing center before and knew the general area, so I had started the drive without the GPS, confident in my knowledge of the State College area. About halfway through my drive, I paused to input the address only to realize that my phone was not working, and I was unable to pull up the navigation. I quickly called my mom who could give me general directions to the parking garage. I knew the ending location, and once I was close, I knew that I could navigate myself, but I just wasn’t positive on all of the turns leading to that point.
My story is revealing, because it isn’t dissimilar from the journey of those of you who lead and manage law firms. So many lawyers know where they want their firm to end up. You may have clear goals, but you need help getting step-by-step directions to the final destination. Maybe that goal is to build up to a million-dollar law firm. Maybe you have made your first million and want to continue to grow. Your goal could also be non-financial in nature. Perhaps you want to build a successful law firm that does not require you in the office every day. There are many routes that you can take to get your law firm to the goal that you have set for yourself. One of the biggest factors in these routes is financial success. Without financial freedom or meeting of financial metrics you will be unable to reach your goals.
When my GPS was not working, I called my mom not because she is the person most familiar with the State College area, but because her experiences with landmarks in giving directions would line up with ones I understood. If I had called a friend of mine, they might have given me street names or exit numbers which they may have felt were helpful, but would not have actually meant anything to me in the moment. My mom was able to tell me to take the exit with the Dunkin Donuts that we stop at on my way to her office. That is a landmark I know, so I was able to make that turn and find myself one step closer to my goal. Your financial data works the same way, there are many ways that you can receive data, however, you need to find a way to view data that is the most meaningful to you. If the data is valid, there is no wrong way to view and digest data. Make sure the data that you utilize is accurate, timely and actionable. This data could take the form of a weekly finance report that is sent to you with information of upcoming payments, income and a current income statement providing details of the financial health of the firm. Additionally, think of these reports of ever evolving documents that can develop as the needs and the active goals change.
If the data is valid, there is no wrong way to view and digest data. Make sure the data that you utilize is accurate, timely and actionable. This data could take the form of a weekly finance report that is sent to you with information of upcoming payments, income and a current income statement providing details of the financial health of the firm. Additionally, think of these reports of ever evolving documents that can develop as the needs and the active goals change.
I did not need the GPS until about halfway through my trip. Many of you have been running your firms for years and are very good at basic financial procedures. Maybe you have made your first million and can very successfully do that. Maybe what you cannot do, much like me that day, is bridge the gap between the middle part of your trip and the end goal.
If, for example, you always take the exit at Dunkin Donuts, what happens if they tear down the Dunkin? Well for me, I’ll never be able to drive to my testing center again because that is the landmark I look for every trip. For so many of you, there is not going to be a physical wrecking ball in your law firm, but a metaphorical one. COVID-19 happened to all of us not that long ago. How many of you had to pivot and take a different route? At Steinbacher, Goodall & Yurchak we have embraced some of the changes that COVID-19 forced us to implement like e-signatures on check request forms. We have not gone back to hand signing check requests because it is less efficient. For us, this necessary change worked. It made the law firm successful. For twenty years physically signing check requests was how it was done. It does not make it wrong, but it does mean that the needs of the business have changed, and we needed to change our procedures to match it.
While many people focus on the output of data, the information that allows partners of law firms to make decisions, the input of information is just as important. Without good, clean data you might have your destination in mind, but you will never get there. You can’t make a good decision with bad data. You can’t reach your goals or even begin to define them with bad data. At Steinbacher, Goodall & Yurchak, we utilize technology to help ensure good data is entered into our financial system. Stampli, a third-party payment processor, helps streamline the approval process with a good audit trial.
Divvy, a credit card company, allows for real time tracking of credit card budgets and employee receipt upload. Electronic transfers from the trust accounts allow for funds to be moved 2-3 days faster than writing a check and save the firm employees time and the expense of cutting a check. All these new innovative finance procedures help produce good data so we can make good decisions and reach our goals. Finance is typically the last area of any growing business that people think about, however, without good procedures that produce informative data, meeting the financial goals of the law firm will be difficult.