One absolute must for running a small business is competent financial management. Without it, you risk everything you’ve worked so hard to build. Depending on the size of your business, its assets and cash flow, you have a range of options for who can handle your finances. As a sole proprietor you might rely on just a CPA to file your taxes, or if you’re an enterprise, you may add a CFO to your payroll. There are many options in between, including outsourcing financial duties. Learn the factors you should consider when deciding whether to outsource finance.
Every business needs some form of finance professional, whether it’s a bookkeeper, accountant or controller. With under $50 million in revenue you probably need one or a combination of these professionals. It’s generally larger companies who employ a CFO, but mid-sized ones can benefit too.
An important distinction to remember about a CFO versus those other financial roles is that a CFO takes a more holistic view of your business and looks at your future. Meanwhile bookkeepers, accountants and controllers focus mainly on the past. Their training makes them generally conservative and risk averse.
Some businesses may have a controller or similar role and a CFO, which some have neither. So which category does your company fall into?
If you have only one or two employees, you may opt to manage your finances yourself, especially if you have past experience doing so or a penchant for figures. Remember, however, that tracking expenses and income is more than math. It’s important to monitor market trends, keep up with changes to the tax code, and know how to estimate your tax bill. Entrepreneurs and CEOs typically lack the time and ability to manage all of that. A business advisor or other outside professional is almost always necessary for any business.
There are certain times in the life of your business where financial guidance becomes even more important, such as when:
If you find yourself in any of these scenarios, locate trustworthy financial assistance right away. Once you’ve decided that you need financial help and what kind you need, it’s time to decide whether you staff that position or outsource.
More often than not, outsourcing is the best option. Outsourcing finance tasks can take many forms. It can range from meeting with a business advisor once a month or quarter, or retaining a fractional CFO. Whatever scale of help you need, there are several benefits of outsourcing.
Speaking of knowing what to look for in a finance professional, here are a few “must-haves.”
A business advisor can meet all of your financial needs, similar to an in-house CFO but with greater flexibility and at a cost savings over creating a senior staff position. Think of a business advisory firm as an extension of your company. They should predict your tax bill as accurately as possible so that you can plan and also spot opportunities to reduce costs or maximize investments across all aspects of your business.
If you’re looking for a business advisor in the Tampa Bay area to assist with your business finances, contact Business Advisory and Accounting Partners today.