For all of my friends that own their own small business, I thought this guest post from Bert Doerhoff had some very good advice. Because – if you are NOT managing cash flow – you won’t be managing much for long!
If you are slowly creating a financial team or have yet to do so, it is important to discuss the ideal size and mix of accounting/financial professionals with your management team. Do not wait until your small business is knee-deep in financials to create the team. Instead, determine which of the roles below fit your needs and budget to ensure financial confusion does not impede the success of your business.
Bookkeeper: Your bookkeeper will be in charge of your record-keeping system. He or she can help with cash-flow planning, balance sheets and communicating a basic understanding of the financials of your business to anyone necessary.
When you will likely need a bookkeeper:
- If numbers aren’t your specialty
As I said earlier, a bookkeeper will be able to communicate a basic understanding of your business’ financials. So, if grappling with the numbers aren’t your strong suit, it may be beneficial to hire a bookkeeper. If hiring an additional employee doesn’t fit your budget, look into hiring bookkeeping services to save money.
- Small businesses
If you do not have complicated financials or if you cannot afford a certified accountant, a bookkeeper is a great person to hire to start organizing the finances.
- Starting up your business
A good bookkeeper can establish a working record-keeping system that will grow as your business does.
Accountant: A certified accountant will handle complicated financial issues such as expanding payroll, improving profits, business structures, loans and billing.
When you will likely need an accountant:
- Business Structure
Accountants understand which forms you need to file when establishing partnerships or licensing different kinds of businesses. If you are creating a new business structure or changing from an old one, an accountant will ensure all the appropriate actions take place.
- Adding people to the team
An accountant will be able to optimize payroll, calculate all associated costs and handle all financial implications of adding employees.
If you need financing from any kind of third party, an accountant is qualified to help you make the best decision for your business.
Controller: A financial controller will be able to manage all of the teams that work on finances for your company. This position is typically reserved for large financial divisions of larger companies.
When you will likely need a controller:
- Management has other things to do
If your management team wants to concentrate on strategy and expansion, controllers can oversee thee finance department and make sure it is running smoothly.
- Moving everybody under one roof
“Transition” can be your controller’s middle name. If you want to move from outsourced accounting to a team in house, he or she will be able to manage that change for you.
When you want to change software or search for the correct software for your business, the financial controller will make the best decision.
Chief Financial Officer: As a member of the management team, the CFO will verify that your business strategy is congruent with financial success.
When you will likely need a CFO:
- Outside investors
Although applying for loans and other outside help may not require a CFO, anything more complex than simply lump sum financing requires a CFO. For example, Initial Public Offerings need a CFO.
A CFO’s best problem to encounter is to handle the complications of a rapidly expanding business. When choosing your CFO, examine whether or not he/she is prepared for the stress and responsibility that accompanies such a complicated and rewarding task.
About the author:
Bert Doerhoff is a highly regarded CPA and founder of Accubiz, a firm specializing in small business accounting. Doerhoff has been chosen multiple times by CPA Digest for the Digest 50 Award, representing one of the top CPA firms in the nation. He was also chosen for the first National Client Service Accounting Firm of the Year Award presented by the National Association of Small Business Accountants.