With little to no background in finance, it’s easy to make assumptions. Many new business owners think that a business can manage its numbers (and grow) with the help of just one hired professional and a desk drawer full of calculators. But that’s a common misconception.
Reality is a bit more complex. Let’s think of finance in the same way you would legal. With everything at stake, you wouldn’t want just one lawyer to manage your business, your divorce and your real estate transaction, would you?
Hiring professionals with the background to make your numbers sing can make all the difference in the acceleration of growth for your business. Let’s look at what an ideal financial team looks like.
Roles and Responsibilities Found Across Your Finance Team
Let’s start at the foundation. What is finance? Broadly speaking, it’s a way of grouping together “activities associated with banking, leverage or debt, credit, capital markets, money, and investments. It’s representative of money management and the process of acquiring needed funds.”
If finance is the overarching umbrella, the areas of expertise across your financial team are representative of the roles and responsibilities that fall underneath. And for any business, no matter how small, you need bookkeeping, accounting, tax planning and preparation, and a CEO mindset.
Think of bookkeeping as a means of keeping score. It’s documentation around everything your business has done from a financial perspective — all transactions, costs, income, etc.
In a sense, it manages baseline data across all other aspects of your financials. It should be accurate, detailed, and consistent.
If bookkeeping revolves around the tracking of numbers, accounting interprets them. This is where reports are run in relation to the financial health of your business.
From cash flow pulls to how your chart of accounts is organized, accountants slice, dice, and analyze every expense. All in an effort to understand the business story your numbers are telling.
Tax Planning and Preparation
Many business owners make the mistake of thinking that they only need to worry about taxes on a seasonal basis. But really, taxes fall into two buckets: planning and preparation.
During the first calendar quarter, your financial management team prepares your tax return. It’s a simple matter of compliance with the law. However, outside of that season, you have months to prepare and change the story of your numbers. The more conscious you are of tax implications year-round and consistent you are with bookkeeping in relation to them, the more ready you’ll be to file the best possible version of your return.
The last piece of the puzzle needed in putting together the right financial team is a CEO mindset. It’s about moving beyond the chaos of entrepreneurship and making strategic decisions.
There’s the mission of your company and then there’s how you’re going to operate to achieve it; the products, services, and the cost of goods. There’s always a financial implication to success. Manage your spending and you’ll have more control over running your business than your business running you.
All of this is just the tip of the iceberg in building out your business’ financial system of checks and balances. But in working with Officeheads, you can manage it all — from accounting to tax planning and preparation — within one centralized ecosystem. Contact our team today to learn more!