Hiring the Right Financial Team
As we become business owners, many of us may recognize that numbers are not our strong suit. That is ok! Some entrepreneurs think their financial team consists of just having a Tax Accountant. Yes, this is a very important role, BUT there are so many layers to establishing a successful financial team.
Layer #1 – The Tax Accountant
A tax accountant handles your taxes, some financial records, and audits. They can prepare both your personal and business tax returns. They will handle any audits with the IRS and in some cases they may also offer bookkeeping services. This is a very important role. They are the ones to provide you advice from a tax perspective and ensure that you are following the proper tax regulations.
Layer #2 – The Bookkeeper
When starting out, most people do their own bookkeeping. While this may be your only option, I always recommend that my clients and potential clients find someone else to do this job. You want to make sure you are operating at your highest and best use…which is working ON your business and not being bogged down in the details. However, this too is a critical role of the team. You want to make sure that you have someone to handle day-to-day accounting and transactional needs for your business. It is important that all of your information is tracked and recorded properly, so that you can have a good handle on your finances. I also find that this role is one of the easier tasks to delegate. You can hire someone in-house or outsource. There are many companies and individuals that provide bookkeeping services to small businesses.
Layer #3 – The Chief Financial Officer (CFO)
This is a higher level strategic accountant that oversees what the bookkeeper is responsible for, works with your tax accountant, and works closely with the owner/management team. The CFO analyzes your financials and is able to relay how your finances affect the vision and strategic plan for your business. Your CFO is that financial guru that will work with you throughout the year, as you make very critical decisions. This is a crucial role for growing businesses. Many times small business owners do not understand or see the value of hiring a CFO. They feel that they aren’t big enough to need a CFO, or may not understand what a CFO does. I describe this role as the glue that holds the financial team together.
Do you have a financial team? Does it consist of these 3 roles? Finding separate people to handle these responsibilities may be the way to go. The end goal is to have a financially healthy business and a peace of mind, knowing that your company can reach its full potential.