By monitoring incoming and outgoing cash activity, you will have the data and foresight needed to successfully manage another key financial initiative:
2. Establishing the necessary banking and funding contacts to ensure adequate cash flow.
When dealing with a start-up or small business, lenders and investors look to the business owner to set the tone for the company.
By being on top of your financial position and staying ahead of the curve on cash flow you are showing lenders that you are trustworthy, responsible, and a smart investment. Getting funding when youre already short on cash is a whole different ballgame, and one you dont want to participate in if you can avoid it.
3. A third key financial initiative for you, the business owner, to be aware of is annual budgeting.
Though preparation of the annual budget would be the responsibility of the controller or bookkeeper, it is essential that the business owner review and approve the budget.
That way, you are in control of spending and can maintain a sustainable level of cash output, thereby safeguarding your business operations.
A final major concern that you as the business owner should be supervising is controlling the risks to which the business is subjected.
You are responsible for having the necessary insurance coverage in place, as well as the financial processes to mitigate any unforeseen events that may have an adverse financial impact on the business.
An ongoing review of insurance and financial processes is key as the business grows and developments occur. By always being aware of whats going on, youll be able to anticipate and mitigate risks proactively, instead of putting out fires as they spark.
In summary, even though you may not be called the CFO, as the owner of a growing business, that is a role you must to some extent play. Take on management of financial initiatives like a CFO would, and guide your business toward a financially solid future.
About the author
Alexander J. Hart of Cuban American decent is principal and founder of Hart Vida Raffo. With over 25 years of experience, Alex specializes in the areas of tax strategy and planning, business process improvement, and capital consulting. Whether advising on capital and financing strategy or consulting for privately-held professional services firms, Alex has the expertise and practical know-how to help any company optimize their business processes and make tactical financial decisions. He began his career at IBM in sales operations and accounting. He was a Controller for the N.Y. Post, has been a CFO for a medical device company, and has written a tax column called “Ask the Tax Guys” for Micro-Cap Review. Alex is a professional member of A.L.T.A. (Affiliated Lawyers of the Americas), a member of the National Association of Tax Preparers, and is a contributing author and mentor at Latin Business Today. Alex graduated from St. John’s University with a B.A. in Spanish and his M.B.A. in Finance. He obtained his accounting degree from Pace University.Website