4 Signs It’s Time to Stop Managing Your Business Finances

July 12th, 2016 by Justin Sadler

One of the most difficult decisions a new business owner faces is whether or not it’s time to hand over the financial reigns. Most small business owners didn’t start their business because they are great accountants. But because finances are such a touchy subject, they have a hard time letting someone else step in. Unfortunately, business owners can do quite a bit more harm than good if they wait to long to let an expert take over the day-to-day accounting. Here are 4 key signs that it may be time to bring in some outside help.

You’ve just initiated a start-up

So, you’ve just hit the ground running with what you believe is a great, market-gap filling business. The financial choices you make as you get your business off the ground have the potential to set you up for prosperity, or set you up for failure. Especially if this is your first business, it’s unlikely that you have the time or experience to cross every t or dot every i. This is where you need to lean on an experienced accountant. Every industry and every type of employee have a different set of rules, according to government regulation, and it’s the job of your accountant, or outsourced CFO, to know what laws apply to you. In terms of budget projections, setting up initial payroll, etc.; an accountant who is experienced with start-ups can make all the difference. Do you know what kind of entity you need to register as? We do. And we’re here to help.

Your business is growing faster than you expected

This is a great problem to have! You had the know-how and experience to get your business to a point in which you can no longer manage the finances yourself. Generally, the more successful your business is, the more complex your financial records become. As you add a more diverse group of employees, taxes become extraordinarily complicated. The more complicated taxes become, the more the IRS is involved, and the more time you have to spend managing money instead of running your business. This is where an outsourced CFO steps in. You may not need a full-time CFO. But, you need more than a bean-counting accountant. You need guidance, forecasting, and a liaison to the IRS who knows exactly what questions to ask. That type of asset, especially if outsourced, easily pays for itself.

You’re beginning to make investments

Whether you’re investing in more, or more experienced, people, sending employees on trips or to seminars, or simply investing in other start-ups, your finances are about to get that much more complicated. It can be difficult to forecast the return you should expect on different kinds of investments, and it can be infinitely more difficult to know how your investments and returns therein affect your taxes. Rest assured, the IRS knows exactly how much should be paid out, and they will certainly come knocking if you make a mistake. The purpose of an outsourced CFO is to ensure that these mistakes don’t happen.

You’re engaging in an increasing amount of large purchases

Maybe you are getting benefits for your employees for the first time, maybe you’re providing more business-owned assets, or maybe you’re making a big step up in your office size. Regardless, your expenses are getting larger and more frequent, which makes them proportionately more difficult to manage. Accountants and outsourced CFOs should be your first call when you notice your purchases growing. If they’re worth their expense, they will consult with you directly and provide useful advice to help guide your decision making. As we’ve said, part of the true benefit of an outsourced CFO, as opposed to a standard accountant, is the proximity in which they work with you. They know your business as well as you do, and can use their expertise to offer innovative solutions so that you can make the purchases you need at a price you can afford.

If one or more of these situations sounds familiar to you, it means that you’re doing a great job at growing revenue, and you need someone experienced to manage that revenue. We encourage you to get in touch with us at Sadler Accounting as soon as possible, so we can start acting as your business’ advocate to the IRS. As your outsourced CFO, we will know your business inside and out, and advise your decisions in a way that sets you up for great success.