Focusing on Expense Loss
Expenses, balance sheets, line items, equity, loss time reports, efficiency marking, scaling metrics, oh where to start.
As a manager, for many years now, these were daunting words and phrases my boss spoke to me when I was a newbie manager. I mean I did take Accounting 101 for my associates and Business Math for my bachelor’s but the real-world shines through on this one. The best learning about business is to practice real world examples.
The course work was great for setting the base of knowledge and the experience of a mentor was just as valuable when applying the knowledge.
Now I’m talking about a real-world experience business book that stopped me in my tracks. Focusing On Expense Loss, by Jim Lopolito, was a quick read but a mountain climb of knowledge. You can tell Jim has had to wrestle with these issues throughout his career. The Expense Loss © idea came from perception of Profit Loss, the confusing way to look at at the finances. Profit Loss can be a part of the conversation and is a serious and popular approach to looking at the P/L statement each month but the approach is reactive in nature.
The monthly P/L statement, a comparison of what the company expects to get from the endeavor and what it is getting from the endeavor. All Reactive. Whereas Expense Loss © is a more experienced comparison model that takes the whole business picture into account. This tool allows for “logical forecasted opportunities” because every decision leads to bottom-line results. But why wait until the end of the month to find out if your decision.
Jim Lopolito used examples from his hospitality experience to showcase the effectiveness of the Expense Loss © steps and tools to create a lesson in the book to set up the reader to be able to use this technique straight out of the gate. Any manager or P/L enthusiast will enjoy the layout of the accounting and definitions of the concepts in this book.
The end result is better business and better management.
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