Considering that every business activity impacts your company’s financial performance, it’s easy to understand why finance must be one of your most critical responsibilities.
Without a solid financial team, businesses are much more likely to make uninformed financial decisions that could cripple the company in the short- or long term.
According to a recent article, 60% of small business owners are not confident in their finance and accounting knowledge.
Owners who benefit from the support of a skilled financial team have greater opportunities for profitability and growth and are more likely to outperform their competitors. That’s why we love the finance team, and so should you.
As you work tirelessly to manage your operations, develop your product or service, attract new business, pursue your long-term vision and handle the everyday responsibilities that come with running a company, it’s easy to let your accounting needs fall to the bottom of your priority list.
It may seem like the big-picture decisions, and emerging challenges are more important to tackle, and your accounting functions can be put on the back burner.
The problem with this kind of thinking is that it has the potential to wreak havoc on your financials and, ultimately, stifle your business growth.
From accounts payable and receivable to payroll, cash flow, taxes, and everything in between, the overall health of your business is tied closely to the way you approach hiring a team of financial experts, and the accounting tasks that the team performs on a daily basis.
If you’re unconvinced regarding the advantages of having financial professionals working to move your business in the right direction, consider why utilizing an expert finance team should be your top priority.
1. A finance team drives strategy.
Business finance goes well beyond processing transactions and updating your accounting books. A great finance team helps you see beyond your data— providing intelligent information for strategic decision-making.
There’s no substitute for the wisdom that real financial acumen brings to the table. If your company runs into unforeseen circumstances (like a global pandemic or losing your biggest customer), having a reliable team could mean the difference between business acceleration and an off-course crash.
Furthermore, finance teams provide the answers to the questions you didn't even know you needed. Do you know what’s driving the business? If you’re not practicing proper accounting, the answer is undoubted “no.”
Your accounting records provide the necessary data to determine how much cash you have on hand, whether a sufficient amount of orders are being received and whether you’re attracting enough customers. You must also be able to track your company’s financial progress against stated objectives.
Whether you’re meeting these goals or failing to match your projections, you need access to this information in order to move the business forward- and the finance team is uniquely positioned to do just that!
2. A finance team checks the rearview mirror AND looks at the road ahead.
A great finance team looks ahead and around the corner. They not only calculate your existing financial status but also identify warning signs, risks, possibilities, and opportunities that may be headed in your direction.
From cash flow recommendations to tax implications, resource allocation, and everything in between, you need the expertise of professionals who truly understand how your numbers relate to business failure or success.
Business finance involves reviewing your accounting entries and reporting accurately on historical numbers.
While a must-have for attracting and keeping sophisticated investors, this is just one aspect of a successful financial management effort.
A look into your business’s past performance doesn’t do you much good if you don’t utilize that information to plan for the future.
Your company is likely to go through ebbs and flows over the course of each year. If you’ve been tracking your accounting information consistently and accurately, you can predict these changes in business pace.
Tracking metrics will help your company prepare for spikes in business so that you can staff and supply accordingly, as well as forecast dips in income so that you can allocate resources appropriately and prevent financial hardship during slow periods.
Otherwise, you’re leaving the business susceptible to challenges that it’s not fully equipped to overcome when they arise.
3. A finance team helps set a sound course.
In addition to equipping your business with the financial guidance and support it needs to thrive, a valuable finance team imposes discipline into your organization without crippling it.
By tracking your company’s financial progress against your business plan and by providing the financial structure your organization needs to meet designated milestones, your finance experts pave the road to financial stability.
Too many companies make inaccurate forecasts fall behind on record-keeping, fail to budget wisely, use cash frivolously, and fall prey to other financial missteps that can jeopardize the business.
With the discipline and knowledge that good finance professionals deliver, you’re in a better position to stay on course, overcome unexpected challenges, and make smart decisions that benefit the business.
4. A finance team brings visibility to blind spots.
The numbers you see on your financial statements should not surprise you. When rigorous accounting effort, you have the most current information at your fingertips.
This keeps you in the know on your financial standing at a granular level.
With this base of knowledge, you can make smarter decisions on refocusing people, efforts, and funds -- instead of putting out fires that arise due to your inability to see what’s coming.
A good CFO serves as a consigliere to the owner/CEO, who may miss critical financial insights due to the fact of being stretched in many different directions. That’s why having an experienced CFO (either in-house or an outsourced CFO) is so integral to your business journey.
The head of your finance team supports your company with expert advice and transparency into aspects of the business that you may not have the time or background to handle on your own.
5. A finance team steers investment and loan relationships.
The CFO plays an essential role in maintaining relationships with your investment base and financial institutions.
These financial bodies expect accurate, up-to-date reporting on key performance metrics and other financial information, which should be managed and delivered by an expert.
Conversely, your CFO should be able to help you understand the perspectives of your bank and auditors, relaying a clear picture of their expectations and where they stand.
6. A finance team helps set a clear business direction.
Your accounting metrics are your business GPS.
They tell you where you are headed for the month. If you are hitting your booking targets each week, you know the company is going to have a good month. If you’re not bringing in sales, you’re headed in a negative direction.
The only way you can foresee this kind of turnout is by diligently tracking your KPIs. And if the numbers are pointing toward a slump, you may be able to take corrective action before it’s too late.
Leverage good accounting practices to steer the direction of your business.
If all of these business benefits sound wonderful, but you don’t have the capacity to support proper accounting, consider outsourcing these financial services. An expert financial team has the knowledge and resources to:
- Keep solid, consistent records
- Provide error-proof calculations and statements
- Identify and communicate cash flow realities
- Track financial progress against the company’s devised plan
- Manage tax-related responsibilities
- Coach you on making smart budgetary adjustments
- Make recommendations based on both historical figures and future insights
- Deliver valuable insight as to where your bank and auditors stand
When it comes to addressing your company’s financial management, there’s no doubt an expert finance team can make your business a more profitable enterprise.
If you want to accelerate business profitability and growth, it’s time to bring the right people on board. You’ll love the peace of mind it brings to running your business.
Whether you take advantage of outsourced accounting services or handle this responsibility in-house, do not let the effort go unprioritized.
When it comes to addressing your company’s financial management, there’s no doubt an expert finance team can make your business a more profitable enterprise.
If you want to accelerate business profitability and growth, it’s time to bring the right people on board. You’ll love the peace of mind it brings to running your business.
Do you question what’s involved in partnering with a professional finance team? Contact us today to talk with one of our experts.
