Finances: Get Your House In Order
*Disclaimer: I am not a CPA or an attorney. This is not financial or legal advice. This is solely my opinion based on 20+ years of personal experience owning and operating small businesses.
I want to talk about the financial team of advisors that you need as a business owner to help guide you into a position of financial security, both for yourself individually and your business. As a business owner, it is important to bring in a team of experts to help you track and manage your finances. If handled poorly, finances can destroy a business. If handled properly, by experts, it can create explosive growth across the board.
Now, I get it. Handing over your financial management and records to a stranger can feel very intimidating, but it will be the best thing you could do for your business as a whole. I work with so many business owners who insist they could never trust someone else, especially an “outsider” with that level of responsibility, but I’m here to tell you that it is an absolute game-changer.
At the very least, you need a bookkeeper and a Certified Public Accountant, a CPA, on your team. I know for a fact that many small business owners do their own books, and that is a mistake. It is not a good use of your time, at all. Your time would be better spent growing your business, and leaving the bookkeeping to an expert. When we brought in our bookkeeper, everything got better. It freed my partner and I up to focus on bringing in clients, building our team, and generating more cash flow for the business.
Having a bookkeeper who is good at their job is essential. Especially when it comes to things like small business loans and taxes. Yes, the dreaded taxes. Being able to log into your QuickBooks and pull up your financial statements and knowing everything is in order removes a significant level of stress. Stress you may not even know you’re carrying.
Now, if you have a bookkeeper, who’s doing the right work, it’s going to make your CPA’s job much, much easier. A CPA is a highly paid, highly trained professional. They are the one who will keep you out of hot water with the IRS. They are not a bookkeeper, they expect to be given all of your financial information already organized and ready for them to work their magic.
Once you have the bookkeeper and CPA in place, and once your business has grown large enough, I recommend you add a Chief Financial Officer, CFO, to your financial team. It’s not necessary when you are just getting started, or if you’re a small operation, but if you keep growing you will eventually want to bring in someone whose only job is to watch the finances in your company, allocate resources to different departments, and basically manage the money for your business.
So to simplify this a little further, the bookkeeper is the one who’s keeping your books in order. So your CPA and or your CFO can do their jobs efficiently. Our CFO won’t touch bookkeeping tasks. So if our books aren’t in order, he won’t work with us. Like the CPA, the CFO expects to be handed the information already laid out so that he can do his job. And what is his job, you might ask. Well, I’ll tell you.
The CFO of a company digs deep into the finances of the business. They figure out where you can save money, where you can make more money, and will help you develop a solid plan around the business finances. Our CFO builds revenue projections, builds job trackers by tracking the performance of the techs, creates budgets, and then monitors to make sure we’re staying on track for the revenue goals for the year.
It’s amazing, really, what can happen when you allow an expert in to look at everything with a fresh set of eyes. When you allow a third party, a trusted advisor to come in and guide you and give you advice on how to better your business, it’s going to basically make you unstoppable.
Photo by Joshua Hoehne on Unsplash
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