Accounting Team DNA

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Numbers can be complex and confusing, but in the small business world they are a huge determinant of a company's success.

Often, it is easier to push numbers aside to focus on the more fun aspects of business. Experienced entrepreneurs and small business owners know this and will surround themselves with a team of experienced accountants and bookkeepers.

But what about those small business owners with less experience -- How do you know when it's time to build or expand your accounting team? How do you know whether you need a bookkeeper or controller in charge of your finances?

Hire a bookkeeper if:
  • You're company is a startup. Hiring a bookkeeper in the beginning stages of your business will help you get started on the right foot with a good, well-kept record keeping system.
  • Numbers make your head spin. Enlisting the services of a bookkeeper can help you learn the basics of the financial aspects of your company – such as managing cash flow and tracking balance sheets.

Hire an accountant if:
  • You're adding employees. Once your business begins to grow and you start to hire more employees, an accountant will be able to help you with financial matters while you focus on growth.
  • You're changing your business structure. An accountant will be able to guide you through both the financial and tax implications of changing your company's ownership structure.
  • You're seeking outside financing. If you're seeking financing, such as a bank loan, it is advisable to have your financials reviewed and organized by an accountant.

Hire a controller if:
  • Your business continues to expand. A business with an established management team and continued growth will want to hire a controller to manage day to day financial operations in order to place more focus on strategic issues.
  • You're seeking new financial software. When your business outgrows off-the-shelf accounting software, a controller can help you to select a more appropriate software system.

Hire a CFO is:
  • You're planning to expand. A company that grows rapidly or is interested in expanding its product lines should consider adding a CFO to the accounting team. A CFO can provide advice and guide a company through the complex financial issues involved.
  • You're seeking complex financing. If you're planning a complex fundraising tactic, such as an Initial Public Offering (IPO), a CFO can be an invaluable asset to your accounting team by handling the influx of outside investors.

Ultimately, the decision to build or expand a small business accounting team depends on the aspirations of the entrepreneur. If you're operating a home-based, single person company, it might be advisable to handle the financials yourself while the business grows. If you're business grows steadily, it's time to enlist the help of someone with financial savvy so that you can concentrate of nurturing new business.

Whatever path your company takes, it's important to remember that most businesses fail due to lack of financial understanding and management. Be honest with yourself, if any aspect of your financials is over your head, enlist help.