Growth spurts aren’t just for teenagers
Managing your accounting needs as your business grows
Now that we’re a few weeks into 2014, you’re probably well on your way to planning for and working toward additional growth for your business. But are you prepared to manage that growth? A comprehensive accounting team can help.
All businesses need three accounting resources on the ground to generate their financial data:
- A bookkeeper
- An accountant
- A CFO
Your bookkeeper is someone onsite: he or she handles paper, opens the mail, cuts the checks and enters data. While bookkeepers generally do not have accounting degrees, they are extremely organized and feel very comfortable with numbers. They know their way around an accounting system and, for the first phase of your business, were just what you needed and what any CPA would recommend. In fact, I bet your office manager, receptionist, or administrative assistant currently does this work.
An accountant, however, has a different skillset, which most notably includes an accounting degree, and, if you’re lucky, a CPA. Like a bookkeeper, your accountant is organized and good with numbers. But you’ll find that an accountant adds value through more traditional accounting tasks like closing your books for the month, maintaining accrual basis financials, or completing your business’s various minor tax reporting requirements. An accountant adds a second set of eyes to whatever the bookkeeper handles; he or she will perform the bank recs, data reasonableness tests, and variance analyses to prior periods and your budget. Your accountant provides a first-level review before anyone else sees your financials, fixing errors in classification of expense or period. Accountants can also amortize prepaids, depreciate assets, book some accruals and update vacation liability. Many bookkeepers even look to accountants to process payroll due to their exposure to broader payroll changes and tax laws.
Your CFO has a bigger-picture knowledge of your business. You work with him or her on building projections, considering new products, and tightening margins. Your CFO knows where your company will go next and leads the communication with your bank and tax accountant. Your CFO will make sure your monthly financials are accurate, accompany your financials with comparisons to budget and prior year, and use that data to reforecast your P&L and cash flow projections for the next six, 12 or 18 months.
As you consider your business’s next phase of growth, think about your needs and the skillsets required to accomplish them, and call on an accountant who can help you find the right resources, part- or full-time, and level of accounting expertise that’s right for you.