Ian Fincher CPA on What Financial Literacy Actually Means for Business Owners

Ian Fincher

Ian Fincher was having coffee with a New Orleans restaurant owner. The owner said: "I'm not good with numbers. That's why I hired an accountant."

Ian Fincher gently pushed back. "You don't need to be a CPA. But you need to understand your business financially."

This distinction matters. Financial literacy doesn't mean you can prepare an audit or navigate GASB rules. It means you understand your own business's numbers.

You know whether you're profitable. You know whether you can afford that new hire. You know what to worry about and what to ignore.

Financial literacy isn't about being an accountant

Most business owners think financial literacy is an all-or-nothing proposition. Either you're a numbers person or you're not.

Ian Fincher would say that's false.

During his time studying accounting and economics at LSU and UNO, he saw plenty of business students who dreaded their accounting courses. They went on to successfully run companies. The difference? They learned to understand their own numbers, even if they never mastered technical accounting.

You don't need to understand debits and credits. You don't need to know how to reconcile a bank account. You don't need to understand generally accepted accounting principles.

You need to understand your own business. That's much more achievable.

A restaurant owner needs to know: is my food cost in line with industry standards? A consulting firm needs to know: what percentage of my revenue actually becomes profit? A nonprofit needs to know: am I spending grant money according to the grant requirements?

These are simple questions. But they require understanding your financial statements.

Understanding your three financial statements is non-negotiable

There are three financial statements you need to understand. Income statement. Balance sheet. Cash flow statement.

The income statement shows whether you made or lost money. Simple. Revenue minus expenses equals profit or loss.

Ian Fincher tells owners: if you don't understand your income statement monthly, you're operating blind. You should be looking at this every month. Did revenue go up or down? Did expenses stay in line? Why did profit change?

The balance sheet shows what you own and what you owe. Your assets versus your liabilities. This tells you your net worth.

Ian Fincher recommends reviewing this quarterly. Is your net worth increasing? Are liabilities growing faster than assets? Are you actually building equity in your business?

The cash flow statement shows where Ian Fincher sees the most confusion.

You can be profitable on paper and broke in reality. A client pays you on net 30 terms. They're a real revenue sale. But you don't have the cash until 30 days later. Your income statement shows profit. Your cash flow statement shows the timing problem.

Understanding cash flow is the difference between running out of money unexpectedly and managing your working capital.

The metrics that actually predict business success or failure

Ian Fincher has spent years analyzing businesses. During his time at Wegmann Dazet, he worked with dozens of New Orleans area businesses across industries. He uses data analysis and financial statements to assess risk.

The metrics that matter differ by industry. But a few are universal.

Profitability: Are you actually making money? Not revenue. Profit. The percentage of revenue that becomes your bottom line.

Growth: Is revenue growing? Is that growth sustainable? Are you just getting bigger, or are you getting more profitable?

Efficiency: Are you managing your assets efficiently? If you have $50,000 in inventory, is that inventory moving? Or is it sitting taking up space?

For a nonprofit: Are you burning through reserves? Are you operating with a deficit every year?

Ian Fincher uses these metrics to help owners and boards understand their financial health. A business growing 20 percent but with shrinking profit margins is on a concerning trajectory. A business with flat revenue but improving margins is doing something right.

Asking your accountant the right questions

Here's what Ian Fincher wishes all his clients understood: your accountant isn't a mind reader. You need to know what to ask.

Don't ask: "Is everything okay?" Ask: "What was our profitability this month versus last month?"

Don't ask: "Are we doing well?" Ask: "What's our inventory turnover? Is that good or concerning?"

Don't ask: "Is this expense deductible?" Ask: "Should I be coding this as office supplies or as professional services? Why does that distinction matter?"

Ian Fincher wants owners engaged. He wants questions. Because questions mean the owner is thinking about their business beyond just showing up and running operations.

An owner who understands their financial statements makes better decisions. They know when to invest. They know when to cut costs. They know when to hire.

That's what financial literacy actually means.