One of the primary reasons why seven out of ten businesses fail daily is as a result of poor financial management. The inability to professionally put numbers together in tracking the growth of your business will result in inability to take calculated risks.
This is why most big or small business owners in various locations deem it wise to consult a professional financial management and record keeping firm when necessary. You can check out Sacramento CFO services to learn more about what it takes to have your records in safe hands.
CFO services can help you with staff management and bookkeeping to ensure that every activity goes through checks and balances. This is to ensure security and accurate monetary system. Also, the CFO service ensures your company uses the correct and updated software to smoothly run the affair of your business.
The major focus of a bookkeeper is to maintain detailed and accurate financial data for a company; they keep records of the company’s financial details, track monetary transactions while ensuring that accounts and records are accurate and up to date.
The task of a bookkeeper is to monitor these five areas of your business to keep the company afloat.
Assets: assets include the money and resources a company owns.
Liabilities: it is the responsibilities and debt owed by someone or the company.
Revenues: it is the total income of a business.
Expenses: these are money taken from the business for items, like salaries and other utilities.
Equity: it is the net monetary value determined by deducting a company’s liability from assets.
There are two major types of bookkeepers; full-charge and internal, also known as in-house. They play similar roles; however, they have unique differences. The following points explain more:
They work within an organization as the company’s employees, who do the job of bookkeeping for the organization, instead of an outsourced employee. They generally have no administrative responsibilities.
This professional takes up huge responsibility to ensure the sound running of a company’s accounting needs. Due to the higher responsibility, they take up a higher role than the usual in-house bookkeeper. A full-charge bookkeeper can work as a full-time employee, or they can be outsourced.
Some of the regular duties of a full-charge bookkeeper include:
- Managing payable and receivable accounts.
- Overseeing the company’s cash flow.
- Organize tax returns once in three months or each month.
- Procuring workers’ timesheets and handling payroll.
- Receiving information for auditing.
- Supervising accounting teams, such as billing clerks, payroll clerks, or payables clerks.
We encourage you to learn more about full-charge Vs In-house bookkeeping.
As your business evolves, you have to be able to easily scale the function of your finance to reach the expectations set out with stakeholders. You will need the right people, procedures, and technology to provide the knowledge for the growth of your enterprise.
Getting an in-house team can cost a lot; but you don’t have to tread this path. By outsourcing the monetary task to an expert CFO, your business has a higher chance to grow. A Chief Financial Officer must manage the financial activities of a company as well as monitoring cash flow, evaluating the company’s financial stability and weaknesses while recommending corrective actions. A CFO’s role is related to a controller or treasurer, for they hold the responsibility of managing the accounting and finance department, and also ensure the monetary report of the company is accurate, and well reported on time.
Click on the following link to see more duties of the CFO: https://www.investopedia.com/
Before you outsource this task you need to identify where your company is lagging, to know the right approach to take. The following are some areas to consider:
The growth of your business may involve complex financial situations. Do you have sufficient financial data security, ideal job performance, or division of duties?
As you’re looking to expand your business, reporting can become a big deal. If you constantly make decisions on your own, with no clear understanding of finance, you will not be able to make an adequate decision that will lead to your company’s growth.
If you cannot keep up with everyday transactions, you will need to outsource this task, because your business cannot thrive if certain records are not well monitored. Therefore, someone needs to supervise your team, so that they will continuously supply you with insight into your finances.
Valid and quick financial information as well as practical understanding and direction on how to utilize it is vital to driving the right strategy and growth. Without this, it is a waste of time. In other words, you have to know how far your business has come, and which strategy failed or helped boost sales. An expert will be able to give you adequate financial information to improve and perfect whichever strategy you use.
Getting a loan from a bank or any financial institute, or investors, would require that you provide a picture of a financially viable company. Having a detailed history of your finances is crucial to secure the money your business requires to grow.
If your company is lagging in any of these areas, then, it is high time you take the necessary action to build up your finances. Failure to take the right step will not only put a stop to your business growth but you may begin to fall backward, and eventually, your business may fail.
Bookkeeping is as essential to the thriving of your business as the income generated. However, getting a financial expert to run the affairs of your business doesn’t necessarily require too much, you can outsource this task no matter your business location.
Find more helpful finance advice like business accounting tips in our archives.
Meg is an author at Cinnamon Hollow. She writes on a variety of topics sharing tips and ideas for daily life.