Systems are required in accounting!

All right.

Hello, and welcome to today's episode, my name is Tom Rolley of System IO.

I've been confronting a difficult challenge, basically, we have not had any optics on our family accounts ever.

Basically, we have them, we actually have a Xero account, if you're not familiar with Xero.

It's an accounting program.

And it allows you to reconcile everything and organize it.

Basically, it's bookkeeping.

We haven't done it for our family.

And it's caused a lot of difficulties, it's basically meant that we are unsure about how much we make each month, or how much we spend each month.

And this camp has come to a head for two things.

One is we're trying to refinance, as many people are taking advantage of the low-interest rates at the moment, we're trying to do the same.

But in that came the requests to say, hey, well, how much do you spend.

And typically, in Australia, it used to be allowed that you could just kind of make it up.

But obviously, there's been some challenges with the rising amounts of money that are going out and houses here in the banks have had to tighten up, I believe there was a Royal Commission into this.

And they're like, Hey, you got to show us some actual figures.

So we didn't have any actual figures.

So I have to do that now.

And the second one is that my wife went to a webinar, and she's like, Hey, we can pay off our main mortgage, our principal place of residence quicker.

If we put more money into it.

Am I great? Except that led to a big fight? Why? Why do you think we had a big fight? Well, because it was all emotional, there was no capacity to say, Well, hey, look, there's this much coming in, and there's this much going out.

And if we dropped our spending here, then we could out of our going out money, though, we could dump it into the mortgage, and we're going to pay it off in 15 years instead of 28.

But because we had none of that, because we don't have the figures not possible.

Now, I said that we'd had the account, we have had the account for a long time, and it's just not been reconciled.

And when I went to do it today, what I found was a remnant of some horrible thinking, pre-systems thinking.

And that basically meant that there was no strategic approach to setting up at least one aspect of the reconciliation.

So we've got about eight accounts, and there are transactions between all of those accounts.

And that had not been thought through, there was a bunch of rules that made no sense, there was a bunch of duplicate rules.

And when I went in and looked at it from a systems perspective is like, Oh, my goodness, this is never going to work.

So what I did is strip out everything and reduce it down to just one rule for each account.

And that basically says, hey, when it's transferring to that account, let's have a rule from that.

Now, zero is very powerful.

And this probably represents a lot of software in our world, that it can do a lot of things.

But in that, there are not necessarily any constraints on setting it up correctly.

So previously, there were rules about money going to account for money coming from an account.

And this meant that it was a giant mess when I went through and set it up just to have the accounts from the TOS.

So it was like to this account to that account to this third account to this fourth account.

Suddenly, it reduced the number of rules that significantly reduced the complexity of looking at the rules.

And what was very interesting is when I went to reconcile, suddenly, it became obvious that when it said to it was like your click here, and then that meant on the other account, the from automatically appeared.

Now, this had not been happening.

And so it was a giant mess.

And I'm still working through to recover from that previously poorly set up rules.

And I want you to take this on board number one, when I set it up, it suddenly became simple.

Number two, doing the work became simple.

And number three, cleaning up the mess of praise it previously unsystematic approach to this is now easier, there is still a lot of work to do.

Finally, going forward from here, it's going to be way easier.

It's going to be click-click, click-click click there will not be the complexity that is inherent in trying to do 12 months of bookkeeping at once.

There's a lot of errors.

There's a lot of mistakes.

Now that it's systemized and clean with a simple set of rules that once I get this on point, then going forward, we will be fine.

This is the benefit of thinking systematically.

Yes, it might take more work in the beginning.

Yes, it might even take more work than you expect because you have to clean up past messes, but good Going forward, once you've done the work, it becomes easy.

I ran into a friend yesterday.

And He said that James Schramko clarified it best.

He said, If you are really busy as a business owner, you are too lazy to systemize.

However, think about that, if you are really, really busy, this means that you have been too lazy to systemize your business, you should not be that but that busy.

It should be possible to run systems in your business consistently so that the work done gets done in a set amount of time it gets done to the same standard, you can start to build in the power of automations with things like Zapier and all that sort of stuff.

If you do not think systematically, then you will be extremely busy, you will not be able to leverage automations because it'll get out of hand too quickly and you won't know what's going on.

So you must get to the system's mindset that there are ways of doing things over and over and over the ways of setting things up simply that means that the work happens systematically.

And yes, you may have to put a bit more work in but you will benefit going forward.

If you want some help with this head over to systemio.dev. I look forward to seeing you on tomorrow's episode as we continue this discussion around the power of systems and processes in life and definitely in business.

See you then.