Your 2021 Accounting Strategy

As that initial bite is in the air, reminding us that fall has begun and winter is just around the corner, all businesses should be planning for the new fiscal year. What new business will the year will bring? What will change? How will the business grow? What should be different this coming year compared to the last? Once you understand what needs to change in the new year, understanding what kind of resources are available will help each phase of your company’s growth.

Accurate reporting of your operations and understanding the assets and liabilities of your business, past and present, is a tremendous start for effective change management. Unfortunately, few businesses spend the money on their accounting operations necessary for effective business forecasting.

Let’s talk about the three skillsets you’ll need for accounting for accurate financial reporting and operations:

A Bookkeeper
A bookkeeper is someone onsite who handles paper, opens the mail, cuts the checks, and enters business data. While bookkeepers don’t typically possess an accounting degree, they bring the precision and organization skills necessary when dealing with a high volume of data. For most businesses, hiring an experienced bookkeeper should be one of the first orders of business.

Typically start-ups assign bookkeeping duties to present staff, such as the receptionist or administrative assistant. This is a good start, but you’ll want to invest in a professional that only performs bookkeeping soon after you begin growing. A trained bookkeeper will help you keep track of balances in your books that need more attention than your receptionist can provide. They can also provide more context and detail to your finances, such as distinguishing Owner Draws versus legitimate business expenses.

Poor bookkeeping can lead to problems such as errors in your tax return, hurting your business credit, and potentially resulting in vendors putting your account on hold.

An Accountant
After establishing a bookkeeper, an accountant is the next step for gaining control of your financial health. Like a bookkeeper, an accountant is organized and good with numbers. However, an accountant’s true value lies in closing your books for the month, maintaining accrual-basis financials, and completing your business’s various reporting requirements.

Truly understanding your numbers is found in the act of converting your financials from cash basis to accrual basis, and this is where an accountant is most comfortable. We’ve heard all too often from our clients that a month turned out poorly because “we have three payrolls,” or “we need to pay our insurance premiums.” An accountant helps your financial statements track with the timing of your operations, not the timing of when things clear your bank account.

You can think of your accountant as an extra set of eyes – they provide a first-level review of your financials before they are sent out, fixing any errors in classification of expense or period.

The CFO
A CFO has a bigger-picture knowledge of your business. Together, you will build financial statement and cash flow projections, consider new products lines, and discuss tightening margins. Your CFO is there to collaborate with your insurance broker on levels of coverage, your HR professional on exposure in your organization, and your IT team on next-generation IT solutions.

For many of our clients at Quincy CFO, we help the CEO focus on their clients and product because we focus on the back office. For every client, we are an objective eye on your business – taking notice of things you may no longer be able to see. We help you understand where your company should – and will – go next.

As you consider your business’s next phase of growth, think about your needs and the skillsets required to accomplish them. Drop us a line at info@QuincyCFO.com and tell us how you’ve learned what is the best accounting for your business.