As your company begins to grow, one of the first people you look to hire is a bookkeeper. Maintaining strong financial records is crucial on so many levels. However, as your business begins to grow, you will eventually have the need for an accountant the next level up from a bookkeeper. This could be a controller, CFO or someone in an outsourced role. Just to be clear, this most likely will not entail replacing your bookkeeper, it will be simply adding to your team. So how do you know when it’s time to start looking for an additional solution? Glad you asked! Here are 6 signs to be looking for…
More Accounting Complexity
This one might be pretty obvious but it’s still important to mention. Your bookkeeper will most likely be limited in the amount of accounting complexity they can handle. Some of these complexities could include job costing, adding new entities, inventory tracking and KPI tracking. These are key tools to use to grow your business so it’s important you have the right solution to deliver them.
Where Is My Money Going?
Do you ever stay up at night wondering where all the money in your business is going? Keeping good books is just the first step to understanding this issue. Once everything is accurate, you now need to have someone in place who can understand the flow of money and how it works in your business. As a business owner, you should never worry about where your money is going. Now, you might not like the answer, but you should have that information readily available.
Not Getting Timely Reports
Does it take months to get the reports you need? As a business owner, you should not settle on this one. It’s not okay to be getting financial information that is 6 months old. That information is no longer relevant. You need to be getting your financial reports within a month of the previous month end. If this isn’t happening, it may be time to look for some additional help.
Need Capital or Lending
Most businesses at some point will look to raise capital or get a loan from the bank. The first thing either of those parties will ask for is a copy of the financials. Do you feel confident in what you are giving them? I can tell you from personal experience how much easier this process will go if you have an experienced team in place. Not only that, that bank or investor will feel much more confident in the numbers if you have a controller/CFO or equivalent.
Plan to Sell Your Business
Most business owners have plans to sell their business someday or at least maximize the value while they are still the owner. An experienced team can help guide you in different ways to help with this process. I can tell you from personal experience, companies who’s accounting is a mess have a hard time selling their business or they end up taking a big discount simply because their numbers can’t be relied upon. If you are getting to a point where selling is an option, make sure you have a team in place that will make your buyer feel confident in the financials you provide.
Every decision you make in your business has some sort of a financial implication. As you begin to grow, you need to fully understand all the financial implications of those decisions. If you are in true growth mode and expanding, you need an accountant who can guide you through that process and help provide you the information necessary to succeed.
Bookkeepers play a vital role in every business. However, there comes a time in lives of most businesses where more is needed. Hopefully this post will help you identify when that time comes.