Taking a hard look at the current state of your business is the first step in its improvement. At Accountfully, we agree that the most important thing for a business is to grow intelligently. By identifying your top challenges and understanding which systems are in place (or should be), you can start the journey on the right path.
It can seem a bit tough getting an objective self-evaluation started, so we’ve come up with a simple formula as a guide. Typically it comes down to being real with yourself and where you are as a business owner, then identifying the top challenges you face. Once you’ve narrowed things down and considered the following questions as a guide, we can get focused on a plan to get things headed in the right direction.
Start Here: Understand Where You Are As A Business Owner
To navigate the road map of growth, it helps to understand where you are currently. Seems like a no-brainer, but it’s that simple. Be brutally honest with yourself. Knowing the truth is the key to figuring out a solution for positive forward movement.
Are you in ground level start up mode? As in, you know what you want in a business, but don’t know how to create it properly? Are you in the “hustling to fulfill orders and flying by the seat of your pants” stage of start up? Adding systems at random to blindly organize the chaos? Startup accounting can be scary, but Accountfully has you covered.
Perhaps you are ready to raise more capital. Are you feeling like there is a solid start and now is the time to take the next step on your growth journey and solicit an investment in your company?
Understand that there are many stages in the business lifecycle. Knowing where you are in that cycle and where you want to be next, will influence your decision making. For example, a company ready to promote itself to investors will need a really attractive way to show the current numbers and projected growth. A company just getting started will need clear structure in its systems to get off the ground. All of these stages will benefit from an honest evaluation and flourish with professional guidance from outsourced accounting services.
Are You Having Trouble With Cash Flow?
Your sales are doing well, clients are coming to you for your services, but the effort you are putting in is not being reflected in the cash on hand. The lack of cushion is painful and it’s starting to get tough to cover your operating costs. This is a scary reality in many a small business and it typically can be narrowed down to not getting paid in a timely fashion or not looking and your true cash reality by being stuck working from your bank balance.
Are opening loans and using credit looking like your only option? Is your bank account balance the only guide to your cash reality? It shouldn't be.
When focusing on the tactics of the day to day, it is not uncommon to not invoice in a timely fashion or at all. The sooner you send an invoice, the sooner you should see that payment. In reality, we know this isn’t always the case. Collections and accounts receivable management are extremely important for having available funds. If there isn’t a consistent process of invoicing, receiving payments and following up on late payments, the cash flow situation can turn ugly rather quickly.
Having a proactive plan as it applies to billing and collections will take the reactive cash flow choices down a notch. Projecting and recording current and future revenue will give you an accurate assessment of your books to make less reactive decisions from your bank account.
Are You Up To Date On Taxes?
Taxes so often become a last minute grab at organizing receipts and filtering in write offs. Taxes are not a one-month-out-of-the-year event when systems are in place.
To understand what you may owe on a quarterly basis takes foresight and organization. Being able to pay them in a timely fashion also takes healthy cash flow. This means having purchasing, forecasting and billing discipline in daily choices to meet that quarterly need.
If you still owe taxes, getting a handle on the best way to get it paid in full takes the experience and guidance from someone who can see a solution past the glaring - and aging - tax bill.
How Is Payroll Looking?
At the start up level, many times the owners won’t take a salary while the business is first developing, but that doesn’t mean payroll can be swept under the rug. Most businesses require an investment into a team to help meet the daily needs of the business. This means having payroll and tax reporting services in place. Setting aside enough to cover payroll is also very important from a legal and operations standpoint.
How are you paying your employees? Are you including the correct amount in taxes? Is it through an online system, or are you outsourcing it to a large company? Do you know if that is the best way for efficiency and pricing for your level of operation?
Businesses that have independent contractors and operate in multiple locations will also need to be familiar with how the reporting and payment side of each locale comes into play. Investing into the right payroll program is a lot more cost efficient than doing it incorrectly and being faced with fines for underpayment.
Do I Have Systems In Place?
The final question to ask yourself is also the most broad, but it’s very important. Having the right accounting systems and processes in place is like having the right infrastructure in a developing neighborhood. Imagine a beautiful new store but no pavement or electricity to support its visitors. The correct infrastructure in a business creates a simpler way to monitor your company’s health and makes it easier to translate revenue to growth. Being able to clearly see where you need to develop to earn more business or invest your profits makes it much easier to function and grow.
The good news is, even if you’ve started operating and haven't exactly found your accounting processes, you can always define and implement a solid infrastructure with the right team helping you.
I Took A Look, Now What?
No matter how ugly things may seem, there’s a way to get better. It is alright if things are messy. Taking an honest look means being true to the actual situation. You are not alone in your challenges. These are common challenges small businesses face. The difference in how quickly and strongly you improve is in where you seek the help.
Not only will you need to understand how to translate the current state of affairs, but access to a team to focus on developing and implementing the right set of accounting processes to get things on track to reach your goals. This team needs to provide more than just tax advice or payroll processing. They need the oversight and ability to look at all of these items and develop a plan to address them, so improvement is imminent.
Accountfully is your team. From the high level strategy, to the day-to-day tasks needed to implement and improve your operation. Let us manage it all. At your disposal are the diverse talents of accountants, controllers and CFO’s to help you grow and improve, not just analyze.
We know the struggles and challenges the entrepreneur and small start up face. We get it. Things can get chaotic in the rush of the daily tactics. Because you are an entrepreneurial rockstar, not an accountant, implementing accounting systems fall to the bottom of the priority list, even though they are so paramount to its growth. That’s where we come in. We're here to help implement systems and manage your accounting needs so you can focus on what you do best - focusing on the core operations of your business.
Too messy to fix? Try us. We would love to chat more and see where we can get you back on track and headed to your next goal.