The Building Blocks of a Successful Company

Posted by Heather Villa, CMA, MBA, MSM on October 06, 2009 in: Bookkeeping & Accounting, Business - Plain & Simple

The financials of your business, whether you are a start-up or Fortune 100 company are critical. Even if you don’t make a lot of money, understanding and mastering your financials will help you to maximize what you do earn. Financials give you information about your current position as well as equip you with information to make future business decisions.

A good financial system is a critical success factor. According to a Small Business Administration study, “Financial Difficulties of Small Businesses and Reasons for their Failure,” over 28% of businesses that declared bankruptcy cited problems with the financial structure of the company as the main cause of failure! Clearly, Financials play an important part of any business, no matter what size.

If you are a small and growing business, you probably know that you need some kind of help to create and maintain strong financials, but it can be hard to know exactly what type of financial help you need. Do you hire a Bookkeeper, or an Accountant? You may need each type of professional at some stage of your business, but how do you know which type of professional you need?

Here are some guidelines to help you build your team of financial professionals to make sure that the Financial building blocks of your company are strong, ultimately improving the possibility of a successful business.

If you fall into one of these categories, your team of Financial professionals should include a bookkeeper:

1. You’re a new company. As a brand new company, a bookkeeper will be able to handle your needs. For many people the mere thought of profit and loss statements, balance sheets and cash flow planning can send them straight to the medicine cabinet. You will need help with setting up a good financial record keeping system, managing financial transactions, and producing financial statements. A bookkeeper can take the headache out of your financial management and help you to gain a better understanding of the financial aspects of running your business.

2. You’re a solopreneur. If you are a freelancer, solopreneur or someone running a home based business, it’s important to keep expenses low. Hiring an accountant on a monthly basis may not make sense. A bookkeeper can help you with ideas to improve your profits and provide advice on payroll and staffing costs.

If you fall into one of these categories, your team of Financial professionals should include an accountant:

1. Your business is growing! When you begin to build a staff and are on your way to building an empire, an accountant can be a valued member of your financial team. The can assist with taxes, help you anticipate and mitigate problems, and can help you to grow in a way that makes sense.

2.  Your business is seeking outside financing. When your business pursues outside capital such as a bank loan, through selling stock, or from private investors, it’s wise to use the services of an auditor. An Accountant can put your financial statements in order which will facilitate the funding process.

3. You’re changing your business structure. If you have made the decision to change your company’s ownership structure, you will need an Accountant. An Accountant can help you to avoid any financial or tax pitfalls that may result from changing from a sole proprietorship to a partnership, corporation or limited liability corporation.

4. You have complex billing. Running out of money can be a risk, and it’s an even greater risk if your billing cycles don’t necessarily bring in money on a regular or predictable basis. If your business has a complex billing cycle, an Accountant has the expertise you need. An Accountant can help you manage the cash and billing to keep your company on good financial ground.

Your team of financial professionals – which might include a bookkeeper and/or an accountant – is an investment into a sound business that is built firmly on a foundation of strong building blocks.

About the author: Heather Villa, MBA CMA MSM, is a Business Coach and Entrepreneur. She helps business owners achieve success in operations, productivity, project management, and social media. Read her other articles at http://hireheathervilla.com/resources/articles/ and visit http://heathervilla.com for more information.

Disclaimer: © 2009 Heather Villa. Permission is granted to repost this article. Article must be published in its entirety, including author bio, and all links must remain intact.

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