Four must haves for optimal financial management
Set up the right financial management regime at the get-go and then you can spend your days on operations and sales.
It isn't expensive. It is efficient. It requires planning. It works for all companies.
You do not need to hire full-time employees. You need to hire consultants with the following skills:
1. A Bookkeeper -
Who can set up an online program to handle revenues and operating expenses.
Once the program is set up for your company the bookkeeper can make entries from an offsite location. This may require 1/2 a day a week. There are many accounting firms that can provide this type of bookkeeping service plus a number of independent contractors.
Internal records should be reviewed monthly by management. Your system should allow you to make comparative analyses. Management cannot make financial decisions if records are not kept and reviewed periodically. Do not wait for year- end financials to make strategic decisions.
2. A Payroll Service -
If you have full-time employees and payroll taxes must be made quarterly, use a payroll service company.
If you have third-party services you can pay these consultants with 1099s. Make certain you comply with the regulations regarding part-time vs. full-time employees. Your accountant can advise you on this matter.
3. Accounting Services -
You should have a contractual arrangement with an accountant who will file timely reports to the IRS. If your bookkeeping records are kept current, there is no delay at year’s end.
4. A Financial Analyst -
This is a specialist who can assist you in determining what aspects of your business should be altered or what aspects should be expanded.
A good financial analyst can readily provide advice based on historical financials. They look for ratios, key financial metrics (such as Cost of Goods Sold and gross margins), and consistencies or inconsistencies in your record keeping. They are not advising you on tax ramifications. T
hey are concerned principally with improving operations and profitability. They know what investors and lenders (both equity and debt) want to see when analyzing a company. They help position your company for growth and recognize the operating strengths and weaknesses from the financial records. Do not underestimate their value.
All these professionals are part-time consultants -- each with a different set of skills. Collectively they contribute to the sound financial management of the company, both now and into the future.
Each one plays a different role, but all are required if management sets goals and wishes to achieve them.
About the author
Marjorie Weber has been educating entrepreneurs and guiding them in their search for capital for the past 16 years: combining business training programs with one-on-one mentoring. Marj is currently a financial advisor for Florida SBDC at FIU. She was Chair of SCORE Miami Dade from 2010 to 2014. She also serves as an advisor to the Goldman Sachs 10,000 Small Business Program and the SBA Emerging Leaders Program and provides training for Veterans seeking an entrepreneurial path upon retirement from the service. She has been facilitating workshops under the auspices of Miami Bayside Foundation for the past 3 years. She commenced her career as a real estate investment banker in New York and Miami.She uses these long term relationships to assist her clients in accessing capital. She knows both the process and the people and has assisted in providing financing for hundreds of businesses in Miami Dade.