Care and Maintenance
Cash Crop for Business Owners Part Two
What every business owner needs to know to have the best chance of a bumper crop.
As a business owner, due diligence comes with your job description. You did your due diligence when you selected the best possible accounting and finance team to partner with your business, which means you’ve already planted seeds for success.
But if you want the blue ribbon tomato (healthy, sustainable business growth) – it’s vital that you, as the business owner, understand what to expect from your accounting and financial team so you can ask the right questions and make the most of their time and expertise.
After all, no crop thrives without care and maintenance – especially not a cash crop. Here are five systems that your financial team should be managing. When all five systems are given proper care, there’s no telling how far your business can go.
1) Accounting Cycle (Micro Money System)
Certainly your accounting department is responsible for the systematic timeliness of your accounting cycle: invoices being sent timely (and payment collected timely), bills paid on time, employees paid correctly, and monthly financials completed timely. This system, well-cared for, helps ensure a stable and secure platform for your organization.
2) Fiscal Health (Macro Money System)
Your controller should be the quarterback of your fiscal health. He or she should ensure you have the right information to make the most informed decisions possible and be a vital part of your strategic planning. This means giving solid input, bringing new ideas to the table and ensuring that you have the appropriate monetary resources to accomplish your business objectives. This person should have an eye on ROI at all times.
3) Opportunity and Hiccup Management
Life (and business) turns on a dime. Markets change, economies shift, customers go away and vendors change their requirements. All of these impact your money and it’s important to have someone who looks at these things with a money hat on as well as a business hat. How will these factors impact cash, the business model, and/or current initiatives within the organization? How can we ensure they don’t wipe out the whole crop?
4) Cash
Companies don’t operate without cash. Your team should not only manage your daily cash needs, but also make sure the systems that create and manage cash are growing strong.
5) Monetary Relationship Management
Your CPA and banker are important allies in your organization. Communication shouldn’t happen once a year at tax time or loan renewal. Communication with your CPA throughout the year helps guide tax strategies and limit unexpected tax liability. Keeping your banker in the loop on what’s happening with your company can go a long way in strengthening that bond. Whether required or not, monthly or quarterly financials should be sent to your banker along with a well-written executive summary. The bottom line? Surround yourself with capable, dedicated people and always know what’s going on in your business. Watch your measurables like a hawk (or an Owl). Every week, you should be paying attention to what’s working and what’s looking a little droopy so you can water, fertilize, and make tweaks accordingly.
“My accounting and finance partners truly are partners. We work in tandem in order to achieve business objectives, and their efforts would be wasted if I simply checked out after bringing them on board. The closer attention I pay to my business, the better I feel about the incredible insights and recommendations I’ve received from them.”
One of the best ways to gain a macro view of your business is through SG&A Reporting.
If you’re looking for a trustworthy bookkeeper or accountant, contact us today to learn how OWL can help you.
The Cash Crop for Business Owners Part Three: Harvesting the Bounty
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