Learning accounting is one of the biggest challenges facing every business owner. Nonetheless, “knowing your numbers” is a critical element of success. What’s the solution?
Color Accounting teaches finance and business acumen to entrepreneurs around the world using a breakthrough graphical system.
I have taken the course myself and recommend it highly to anyone, including those with advanced business degrees and/or years of corporate experience.
For the first time, in response to the Corona crisis, live Color Accounting courses are now available online.
For more information: https://www.coloraccounting.com/
https://www.coloraccounting.com/contact-us.html
Telephone: 202-462-5000
Email: easy@ColorAccounting.com
What follows is a computerized transcription of our conversation. Please excuse the typos!
Frank Felker 00:25
Welcome back to Radio Free Enterprise. I’m Frank Felker. My guest today is Peter Frampton. A lifelong entrepreneur and educator who believes in the potential of every person to live the life they want, and is dedicated to helping as many people as possible achieve that dream.
Peter is also the creator of an incredible method of teaching accounting principles to businesspeople, called Color Accounting. And I’m so pleased that he’s been able to take time out of his busy international travel schedule to join us here today. Peter, welcome to Radio Free Enterprise.
Peter Frampton 00:58
Frank, it’s a real pleasure to be on the radio. Thank you.
Frank Felker 01:01
And people may be thinking that I’m kidding about your incredible international travel schedule, but I will tease you more about that further on. First off, Peter, I’m sure you’re sick of talking about it. But we have to make it clear for people who were alive in the 1970s, those few of us that are left that you are not that Peter Frampton,
Peter Frampton 01:18
You’re giving your age away, Frank, the other Peter Frampton, the famous guitarist. And in fact, I gave him my Twitter account, because I figured he needed Peter Frampton more than I do.
Frank Felker 01:29
Are you serious? That’s a great story. I’d love that.
Peter Frampton 01:33
I waved him down at a concert. My name is Peter Frampton. Surely not.
Frank Felker 01:39
That’s a wonderful story. I love that. That’s great. Well, thanks for sharing that with us. Well, I have a personal story, I also want to share unfortunately, it’s not quite as cool as that one. But I think it’s applicable to what we’re talking about today. I, as many listeners know, I first got involved in small business when I was 13 years old, when my mother opened a coffee shop in Northern Virginia outside of Washington, DC. And we really struggled for years, and there was just, there was so much that we did not know about running a business, not the least of which was accounting. And I was particularly frustrated about that, because I was always pretty good with numbers. But I could not make heads or tails out of accounting, it just didn’t seem to make sense to me.
And I remember I went to an adult education course. Think, after I got out of high school. And Mike, I was even further, just totally mystified, I couldn’t figure out what this guy was trying to tell me. And so then I went to college and got a degree in economics. And they forced me to take accounting, and all kinds of, you know, finance and all sorts of things. And little by little, it started to become clear to me. And then also the fact that I had to deal with it at the family business every day, and every year at tax time, helped me and then around the year 2000, late 1990s, I was a founder of a.com company. And those VCs are venture capitalists. They’re funny, they really want you to have your numbers, right. And they want very complicated projections and all kinds of stuff. And I had, so I learned and struggled. And thank God, my brother helped me put together some very complex spreadsheets and all kinds of stuff.
My point I’m trying to make is, I have always struggled with accounting, in spite of the fact of all my years of experience in business and my propensity to work with numbers. That was, of course until I took Peters course. What was it about two or three years ago, Peter, I went to your course on DC,
Peter Frampton 03:36
Something like that. Yeah,
Frank Felker 03:38
Yeah. And I was just amazed at how you had like, almost like Superman’s X-ray vision, you had looked through all of the complexity, that seemed to been layered on for centuries to accounting, and got right down to the nuts and bolts of what’s important, the music or the music, I’m about to say the music goes round and round. The money goes from here to here to here. And the objective of the exercise is to put it here. I thought that was great. And each type of, you know, account has its own color, and so forth. I’ll let you explain further. And I apologize, because I normally try not to speak so much on the interviews, but I wanted people to understand how amazing your system is. And, and what just such a revelation it is to people. So tell me your story about what color accounting is and the kinds of people and organizations that you’re able to help with it.
Peter Frampton 04:36
Well, you know, firstly, Frank, thank you for saying what you just said and, and you speak for so many people that they know they need to know this. And they’ve tried and they’ve struggled and, and it didn’t work and yeah, and I guess yeah, we’ve found this way to just make it easy. And sorry, why don’t you just repeat the question that
Frank Felker 04:57
I was just saying. Tell me what it is. And the types of people and organizations that you’re able to help
Peter Frampton 05:03
write with. Thank you. So what it is, it’s called calorie counting, because it uses color, although actually, the real essence of it is, is that it’s all about language. And that’s what makes it accessible to people. Is You said you were good with numbers, but you still couldn’t understand it. That’s because what the traditional accounting industry hasn’t done well is is work with the words, what are the words mean? And when you get clear on that, it makes it so easy. So who do we make it easy for? Well, we work with all sorts of people, because this is really such a such a wide problem. I mean, this week, the top Wall Street investment bank, we trained 400 people on Monday for the in their onboarding program that people have come straight out of college, half of whom I have to say, had already studied accounting, but ended up understanding it much, much deeper.
Frank Felker 05:56
All right, I have to interject, it’s up to you. I can take it out later if you don’t want to. That was Goldman Sachs that you trained 400 people for isn’t that correct?
Peter Frampton 06:04
Well, if I had to say, yes, it was it was Goldman Sachs.
Frank Felker 06:07
Yes, you have to say it, I forced you to say, that’s great. Yes. And yet, again, I must interject. These are guys, that guys and gals, they’ve just come out of business school, for goodness sake, they’ve come out of the top schools, and probably have graduate degrees in business. And yet your system is able to help them see this more clearly as well.
Peter Frampton 06:29
You know, Frank, the thing is, people don’t know what they don’t know. And people who think they know it, they realize, Oh, goodness, there’s this whole realm that they don’t know. For example, again, we don’t wanna get too much into the weeds. I know, I know that. But when people don’t understand what revenue is, you can ask anyone, what’s revenue, and they don’t know that they all say, as your listeners are probably thinking, revenue is money you receive that’s wrong. It’s not. And it’s not inconsequential. Because that actually, I could tell you some stories later about that misunderstanding alone kills people’s businesses, particularly small business owners, and you ask me, you know, who do we work with? Well, yes, we work with these big banks, and so on. And we’re proud of that. But the, probably the most common people we work with are small and medium business owners, and managers who are battling along on their own, and they’re busy, and they’re, they, you know, they, they’re committed, and they’re working hard. And they know, they need to know this stuff. And, and they need to read financial reports and understand the finances of a business better. But they don’t, they don’t and it’s like an Achilles heel. And we fix that.
Frank Felker 07:42
So it sounds like you’re saying that it’s almost as if it’s a foreign language, that it’s more of a nomenclature issue, than a functional issue that’s stopping people from understanding it. It’s the words the names, the nouns, the verbs, the adjectives that that are used in accounting.
Peter Frampton 07:59
I love that. I love that because you’re nailing this point that it’s really about the language. And, you know, if color accounting is a radical, dare I use the word breakthrough in financial literacy education. It’s because we’ve, we’ve deeply approached the subject as a language. And, in fact, we refer to accounting literacy. Now, you don’t often hear accounting referred to as a form of literacy. You know, we’ve all heard of financial literacy. But what people don’t realize is that, you know, you want to develop your business acumen. That’s why a business owner comes to us I want better business acumen. Right. And that’s underpinned by financial literacy. What’s not widely recognized is that accounting literacy underpins financial literacy. And if you try and talk business and you drop general finance, unless you know what the word underpinning it, are you building on it, you’re building on sand. Yes.
Frank Felker 08:56
Like that? Well, you know, we don’t have enough time. In fact, I wish we could sit here all day, I just read, remembering how energized I was to be your student in one of your classes. So I want to try to get to the highest level and most important points, what, let’s say somebody, one of these business owners, mid level managers, whoever top C level executive takes one of your courses, how do they benefit? What is it that they’re able to do on the back end of this that they couldn’t do before they came to see you
Peter Frampton 09:31
all Frank? Where does one start? They can manage the cash flow of the business, they can fix the cash shortage problems, they can see where things aren’t working optimally. They can they in the end, they can make more profits.
Frank Felker 09:43
That’s what it’s all about, isn’t it?
Peter Frampton 09:45
Well, well, yes. And it isn’t the end. But wait, there’s more. Because as I said at the start, Frank, you know, I’m deeply and me and my hundreds of colleagues around the world are passionate about people and some of the most Moving stories are the impact it has on the individual human being. I mean, if I can briefly Frank, you know, there are stories like the widow who, whose husband died, so she inherited the family business or, you know, a good profit or medium sized business. And immediately she’s on the board, and she’s working with the CEO. And she wasn’t involved in the business prior to her husband sudden death. And she is terrified. And she, after these board meetings, she goes and locks herself in room and he’s crying. Because she’s letting down her husband. She’s, she’s, she’s feels like a fraud, because she’s pretending to know what she doesn’t know. And she can’t contribute. And she can’t ask the right questions. And she can’t be the leader that she suddenly needs to be. She does our one day workshop, and it changes everything. And she feels that she can go back and she can engage. And frankly, that’s just off. That’s wonderful. Because Yeah, you have this woman who is smart, who is powerful, and she can now step into the role that she and be the person that you want to be.
Frank Felker 11:09
Boy, what an incredible impact you had on her life. And I’m sure on the success of that business as well.
Peter Frampton 11:16
Undoubtedly, undoubtedly,
Frank Felker 11:19
you know, I one of the things I have to say, that just struck me because like you I, I am very much dedicated to helping people live the life of their dreams, through business, through entrepreneurship, for that matter, through their career in business, I like to try to help people in any way I can. And one of the things that struck me just like a slap across the face, when I saw your system was the the concept of retained earnings being the object of the exercise, what we’re trying to do is move the money from here to here to here to here, and not lose too much of it in here, here and here. So that as much as possible ends up here, and which you know, we could look at as retained earnings, or, you know, personal wealth, money in the bank, whatever you want to call it. That is the object of the exercise. And I have seen so many people lose sight of that. They they don’t, there are other objection objectives that they’re looking to serve, like being able to tell people that they’re their own boss, or what have you. But they just so often lose sight of the fact that if you’re not going to be putting money into retained earnings, go get a job somewhere else. Yeah. And then and then have a have an account for yourself. That’s called retained earnings that you
Peter Frampton 12:31
put money into, we want you to be wealthier, yes, we want you to be wealthier, and your self esteem and everything. But we also want you to be materially wealthier, and we will help you do that. And one of the the powerful ways that we do that, the difference is that we present your whole financial story, and we can do it for your personal finances as well as your business as we present it in this whole it’s kind of if you will, holistic view on your finances, that you’ve got to see all parts of it, you know, people focus in one area or other some people are terrified of debt. Some people are completely averse to expenses where you know, a moderate amount of expense with the right amount of expense is appropriate. So people look at the pot, and we get them to say no, no, look, here’s the hole. And as you said, Frank, in the end, it’s about building your wealth through retained earnings.
Frank Felker 13:27
Yes, another thing that I would point out is that, and I’m learning more and more as I’m becoming more of a more focused on being an educator myself, different people learn in different ways. And one of the things I thought was amazing about your system is that there’s not only colors associated with it, and motion, and movement, but then there’s a three-dimensional thing where you have us folding up these little boxes with little flags on the top, and, and putting them in the right spot, almost like a board game. And then also there’s the tactile aspect of us putting our hands on these accounts. And on these transactions literally hands on, right. And I mean, it seems as though no matter how someone learns, they will be able to find a channel through the way you teach to glom on to this, particularly since the standard way of learning it is looking at you know, little characters and flat on a page. And that’s not working for them. So your approach is so much different. It seems like there’s almost no one it could not help.
Peter Frampton 14:31
I’m just sitting here smiling Frank, because that’s exactly right. It’s just such fun because, you know, we humans and we want to move and we want to touch and you know, people you quite right that actually if one got into the theory of instructional design as as we call it. Yeah, we’ve, you know, made sure to include things for auditory learners and visual learners and kinesthetic learners we call it you know, in truth though, we all want to See things some people rely on it more than others. But yes, we’ve accommodated, all sorts of things, we’ve got special sound effects. And you know what’s so fun about running these programs is that we, I get to tease people halfway through when they realize that this is deadly serious, and this is really working, I can start to be loud and say you didn’t think you would come into kindergarten Did you? back it’s yellow and green back, it’s in front of them. And, yeah, it’s a lot of fun. And it’s just so non-threatening. And, and as you know, as a facilitator, it’s powerful, because I literally, are, we’ve got these highly trained facilitators, we call them calorie counting leaders, and we use the word leader instead of teacher because people, we leading people to a sort of self-discovery
Frank Felker 15:43
like that,
Peter Frampton 15:44
yeah, it’s very good. We don’t want to tell you stuff, we want you to discover your own power. And people just love it. And, but the leaders are, are trained to literally sort of watch your eyes and wash your hands. And, and what that enables us to do is sort of get inside your head for as we call it, the dissonances. Because it’s like, well, why are you saying that, but your hand is hovering over its face? Because that, you know, we, we can unpack one little misunderstanding that is ruining your business.
Frank Felker 16:21
That is just fantastic, Peter. Well, let me get two last questions for here. Let’s say that someone just can’t either they feel as though that it doesn’t make sense for them to engage with color accounting with your class, your live class or whatever. And they just put their if you could think of the number one thing that any business owner or anybody listening to this recording could do. Let’s say it’s the most common misconception they have, and what they could do to get it turned around that would have the biggest impact on their accounting literacy.
Peter Frampton 16:54
Right? That’s a great question, Frank. Because one of the, because we’ve been doing this for so long, we’ve been developing this for over 15 years. And we’ve been able to distill the key misunderstandings. And that’s why suddenly learning accounting and learning how to read financial statements is now easy. Because we’ve worked out that you need to know just three things, we call them aspects of learning, in order to truly get accounting, right, and write what we call them structure, language, and movement. structure is, for example, how the balance sheet connects to the income statement. And we have a little sound effect for that it’s real fun to and it has people truly see it, we work with a lot of law firms, all the top law firms are starting to use us. And that point, for example, for lawyers is huge. Oh, I see that the income statement is just explaining one number on the balance sheet. So that’s an example of structure. And language Frank is, is the words, people don’t understand what an expenses and people don’t understand what revenue is. I’ll give you an example of that, which also, you know, makes the hair on your arms stand up because we had this chap come into a workshop. It was actually in Australia. And he wrote a book called life after liquidation. He’d inherited a business from his father. And he was determined to be the good son and run it successfully. And it crashed, it ran out of money. And so he was so determined to be a good son that he started another business. And this also failed. Because he thought revenue was cash, but revenue is not cash. And he was so busy that he he had lots of sales happening, but they weren’t turning into cash. And if you fix that problem alone, it can change everything. And the beautiful thing that he said was, oh my goodness, if I had just simply understood that, which is a language point, that revenue is not cash, I wouldn’t have had to write that book. Wow. And there we have it.
Frank Felker 18:50
That’s great. That’s exactly the kind of thing I was looking for. That’s wonderful. Well, let’s say then it’s somebody listening. It’s like, okay, you know, Peter is exactly the person I’ve been looking for a color accounting is exactly the kind of thing that I need to help me get turned around. But we all you know, we have that little devil on one shoulder that saying, Oh, well, you know, it’s too expensive or it’s too late. You can’t you know, what, what are the most common things that people put in, in the way of themselves that they need to think through and get over in order to move forward and engage with building their accounting literacy by by connecting with color accounting,
Peter Frampton 19:33
frankly, that’s easy, who’s got a day to take, you know, a day out of their lives, their busy, busy lives to to learn accounting, right? It’s like, Ah, yeah, I’d rather go to the dentist all day. Yeah. So so the shortage of time is is always an issue for people but you know what? In the end, it saves so much time, Frank. I don’t know if your listeners will believe that. This but I’m going to say it because it’s 100%. True, we so often get people to say I learned more in one day than I learned in three semesters at college, or, in fact, in my whole degree, I heard it at the bank on Monday. And so it’s like, wow, you telling me that it’s, you know, days too long, or try wavenet three semesters. And it’s a highly accelerated form of learning. So, you know, yes, you’ve got to take a day out of your life. And, look, we’ve got programs that go for two hours, and we’ve got programs go for three days, mostly, our most popular program is a one day workshop. And, you know, so it’s actually quick, and it might not be urgent that you do it. But it’s important that you do it. And in the long run, it’s just going to do amazing things for you. In terms of price, you know, it’s a few $100, it’s really quite cheap. I mean, compared with keeping your business solvent. What can I say about that?
Frank Felker 20:53
Yes. And I, as I say, give it my most hearty personal endorsement. And I did spend, you know, semesters in accounting and finance and years in business, and the insights that I was able to gain were just blinding. I mean, it was just like, Oh, my God, I can’t believe I’ve never looked at it this way before. And that’s why I’ve, you know, how long have you and I’ve been talking about doing this interview, and I’m so glad that we finally had a chance to connect this to
Peter Frampton 21:20
Frank too long, because like we said, busy lives, right. But yeah,
Frank Felker 21:23
right. The same reason Exactly.
Peter Frampton 21:24
Join us to Frank. So thank you.
Frank Felker 21:28
Well, before we sign off, how can people connect with you? What’s the best way for somebody to learn more about color accounting and what it can do for their business?
Peter Frampton 21:39
Well, frankly, I mean, they can go to color accounting.com in this and read up about it there. But you know, the easiest thing would be to email me or, or, in fact, my colleague who’s very good at responding to inquiries and exploring people’s needs, john Gorman, and they can email john at john at color accounting.com. And he would love to engage you. And you know, we’re actually a social enterprise, we’re about, you know, we’re a for profit company, but we’re actually about making a difference for people. So we’re not going to sell anyone hard, sell anyone, it’s just let’s just tell us what your needs are. And if we find a fit, and if we can find a time to get together, then we’ll work with you to address your needs. And, and maybe you’ll want to work with us. Maybe we’ll come back in a few years time whenever it’s whenever you’re ready. So we would just love to communicate with people.
Frank Felker 22:26
That’s awesome, Peter. And obviously, that’s very sincere and heartfelt. And I know from my own interactions with Peter and john Gorman, as well, that those are exactly the type of people that you’ll be dealing with when you connect with color accounting. So Peter, the another ironic aspect of speaking today is that you are traveled all over the world. You live in Bern, isn’t that correct? In Switzerland?
Peter Frampton 22:49
Geneva, Switzerland, Geneva?
Frank Felker 22:51
Hmm, I mistake. And but today, you’re only about six miles away from me and Alexandria, Virginia.
Peter Frampton 22:59
I come to America often. And it’s good to be here. Yeah. That’s great. Well, where
Frank Felker 23:03
are you flying off to next?
Peter Frampton 23:05
I’m going home, Frank, and I’m going to have a week’s holiday with my children.
Frank Felker 23:09
Oh, that’s awesome. Well, that’s great. Yeah. Well, Peter, thank you again, so much for being on Radio Free Enterprise and for sharing color accounting with my listeners. I wish you guys all the best. And I hope that you and I will get a chance to see each other again very soon.
Peter Frampton 23:25
I do too. Frank, thank you so much for the privilege of being on your show.
Frank Felker 23:29
Well, Lord only knows when the next time is. I’ll see Peter Frampton, but for the rest of you, kids until next time on Radio Free Enterprise. I’ll see you on the radio.
23:39
He’s the kind of guy who finds micro economics fascinating. But go ahead and listen anyway. Radio Free Enterprise with Frank Felker.
