It’s a fact: Working with an accountant dramatically increases the odds of success for your business.
And with 50% of businesses failing in their first five years (Source: SBA), it just makes good business sense to find ways to increase your chances of success with your business.
Finding the Perfect Blend of Accounting Skills and Expertise
Every business is different when it comes to the type and level of accounting services needed. Some small businesses may only need bookkeeping services, while others benefit from many layers of accounting skills from bookkeepers to Chief Financial Officers.
If your business is in the small to mid-market range, generating $500,000 to $20 million in annual revenues, it may not make sense to have a full-time CFO, a full-time controller, and multiple bookkeepers with all the full-time salaries and benefits in your accounting department.
The good news is you can still get the advice of these high-level accounting skill sets while paying only for what you need. We work with business owners like you to create a customized package based on your company’s unique accounting needs.
What Are the Levels of Accounting Skills Available?
Almost all businesses start out with a recordkeeping function which is done part-time by anyone available or outsourced to a vendor. The minimum is done to get the tax compliance handled.
In very small businesses (revenue under $500,000 per year), a bookkeeper codes the transactions, reconciles the bank accounts, and generates monthly reports. The bookkeeper can be a part-time or full-time employee, a contractor, or a bookkeeping business that provides this service. Invoicing is usually done by someone in the office, in the field, in the store, or online via an automated shopping cart.
Bookkeeping + Light Advisory Services
For small businesses generating roughly over $500,000 per year in revenue, bookkeeping work plus some advisory work is, well, advised ?. An accounting professional needs to make sure the books are “done right.” The business owner may need help with cash flow, accounting software questions, setup, cleanup, adjusting entries, payroll compliance, or workflow efficiencies. An experienced bookkeeper or senior accountant is right for this level of service. This is the first level of accounting service where you may see a return on your investment in accounting services due to accounting process improvements and training efficiencies.
A small business earning more than $1 million in annual revenues is ready for controller-level services. This includes bookkeeping which is either outsourced or done in-house by full-time or part-time employees or contractors. An oversight function is included where an accounting manager reviews the monthly work and discusses financial reports with the owner.
In addition, some advisory services may be included:
- Budgeting and forecasting
- Cash flow projections
- Loan package creation
- Insights into where you can reduce expenses, increase revenues, decrease risk, and/or benefit from financial opportunities
- Accounting process setup, improvement, and documentation
- Accounting system selection, setup, customization, and training
- Chart of accounts optimization
- Accounts receivable support and analysis
- Inventory setup, reporting and analysis
- Job costing setup, reporting, and training
- Internal control review to reduce the risk of fraud and other management risks
- Key performance metrics selection, setup, and review
- Financial training to elevate skill sets of employees and owners
- Financial report review and guidance
- Compliance with financial reporting rules and regulations
- DCAA compliance
- Audit assistance and coordination with an external auditor
- Hiring or supervising accounting staff
Many of these advisory services will not be needed every month. A great accounting team will be proactive and suggest services that will have a positive impact on your profitability.
With a relatively small monthly financial commitment, our outsourcing CFO can provide invaluable financial advice on a wide variety of issues. CFO can get to know the business on an in-depth basis, and be available to offer high-level financial advice when necessary.
Companies generating more than $5 to $10 million in annual revenue may need the expertise of a Chief Financial Officer. While a controller manages the historical financials of a business, the CFO is forward-looking and strategic. A CFO’s responsibilities include:
- Executive level decision-making and advisory services
- Strategy work, including setting business direction
- Raising capital including managing an IPO or negotiating debt acquisition
- Working with investors, board members, and C-level executives
- Contract negotiations
- Compensation program design
- Complex financial regulation compliance
These five levels above are the core levels of accounting expertise. The smaller the business, the more they blend together. We’re happy to put together a packages of accounting services that will be perfect for your business.
Part-time CFO/Controller Services:
Helping Small-business financial expertise to take their business to the next level. Interpreting the data and tell management what those numbers really mean. Providing companies a full-time expertise with a part-time fees in finance/accounting, strategic planning and other diverse management projects. Working at a senior level, counseling management and guiding existing staff toward the solution of complex financial problem s and the development of improved management systems.
Benefits from outsourced CFO/Controller
- Better understanding of the financial side of you r business. So you have less surprises and more control over the money.
- Improved decision-making capabilities from clearly seeing the hard and true n umbers of your business.
- A readily available sounding board to help you with those tough business decisions and help you clarify your business plans.
- The comfort from knowing that a professional is overseeing, protecting and constantly improving the financial side of y our business.
- A professional who establishes strong financial controls in you r business to reduce employee theft and increase profits.
- Training and managing your accounting staff.
- Improved quality and timeliness of financial information.
- Budget preparation and monitoring.
- Profitability analysis by service or product line.
- Assistance in defining long-range plans and the quantification of goals.
- Liaison with bankers, attorneys, outside CPA, insurance agents, etc.
When to Hire a CFO/Controller:
- No times to manage the key aspects of business and financial operations.
- Bring financial expertise in house.
- Company in expansion stage.
- You are working harder, but you don ‘t see the benefits of that work.
How Can an Accountant Help Your Business?
It’s easy to feel that accounting is a necessary evil of doing business, but there are many benefits that can be realized from working with a proactive accounting professional. Here are just a few to consider.
Keeping the Cash Flowing
One of the most challenging tasks of small business owners is managing their cash balances. We can help you get the right tools in place so you can stay on top of your cash. Whether it’s setting up the right reporting, speeding up receivables, creating forecasts, or preparing a loan package for your local bank, we can help you keep your cash flowing.
Accounting System Selection, Setup, Customization, and Training
Having the right accounting system can make all the difference in the world. We’re familiar with many accounting software options and can help you find the best fit for your business. If you’ve outgrown your current solution, we can help you manage the transition without missing a beat.
One secret in boosting accounting productivity is to make sure your accounting software is set up and customized correctly. We learn your requirements so we can tailor the accounting software to your business and reporting needs. Plus, we can train your staff on the new system so they can be up and running in no time.
Process Development and Improvement
The accounting function is necessary in every business, but it shouldn’t be cumbersome or inefficient. We can take a look at areas within your accounting system that are costing you more than they should be. These could include areas of duplicate data entry, time spent on manual reports, and bottlenecks in general. We’ll suggest improvements that can save your time and money and keep your bookkeeping bill as low as possible.
Are there any areas in your accounting functions that are undocumented? We can help you write a procedures manual for those areas. Good documentation is the key to good training, consistency, and controls.
Do you wonder which product or service line is the most profitable for you? We can perform an analysis of profitability by location, product, employee, or whatever grouping is meaningful for you. This information will help you make better decisions about your revenue mix and make your business more profitable in the long term.
While most accountants stick to cursory expense reviews, we prefer to go deeper. We can help you identify costs that may be outside your industry norms, discover areas where your pricing might not cover your costs, and root out profit margins that should be higher.
If you maintain inventory in your business, we can help you lower carrying costs, determine out-of-stock conditions, and identify obsolete items.
Is your business project-based with job costing requirements? We can help you make sure it’s set up right, help you create more accurate estimates, and accelerate cash flow with timely progress billings.
Behind the Controls
Small business accounting functions often lack the internal controls and procedures to help prevent fraud, theft, and other risks to your hard-earned assets. That means your business assets, from cash to inventory to receivables, could be at greater risk of being mis-handled.
We can review the duties of each bookkeeper and make suggestions to procedure changes that will lower your risk and help you better protect your business assets. We can also perform a full risk review and make suggestions to reduce your business risk and strengthen your accounting controls.
Planning, Budgeting, and Metrics
Do you know exactly what you want your business to look like in three to five years, but are not sure how to get there? We can help you make sense of the financial piece of planning so you can achieve your dreams.
In the short term, we can also help you create a budget for your business so you can control expenses and see where you stand relative to your goals.
If you love scoring high on video games, just wait until we set up goal scores for your business. These are called key performance indicators (KPIs), and it’s great fun when you can hit or exceed them.
Real Estate and Equipment Acquisition
Planning a large investment? We can help you compare and evaluate your options from a financial standpoint so you can make an informed decision.
If you don’t have the time or expertise to train your bookkeeping or accounting staff, we can provide the training they need to become proficient in their accounting duties.
It can be difficult to find good advice when you are in business for yourself. Friends and spouses who are not self-employed don’t often understand the decisions we make. As a fellow small business owner, we can act as a sounding board for your business ideas and provide a fresh, experienced perspective.
How to Get Started
The perfect synergy between a business owner and the accounting team occurs when two things happen: 1) the accountant gains a deeper knowledge about your specific business, and 2) the business owner grows in their financial knowledge about their business. This is when the magic really starts to happen for the business, and it improves over time.
Our goal is to become a true partner for your business by providing you with the right mix of accounting services for you and your business. To take the first step, give us a call or email us to see how we might best work together for mutual benefit.