6 Steps to Implementing Financial Systems that Work For You
It’s so interesting and inspiring to work with small businesses. Each owner is so unique, creative, passionate, smart, and interesting and creates a business that brings in all of these wonderful qualities and more.
That’s why I do what I do!
Teach you how to manage your money, your cash flow, and do the very best you can with what you make. I do this because each of you are the very essence and backbone of this economy and we need you!
So let me ask you this. Do you have your accounting systems in place? How much time do you spend managing your money?
I know I get it, it’s hard to keep up with because well you have your business to run, customers to see, prospects to meet, and all the rest which leaves not so much time for the money management thing. And you’re right, any one of us who is in business for ourselves should be spending ¾ of our time generating revenue, myself included. That means there’s not so much time left for the rest.
But if you don’t have your financial systems in place it’s a recipe for disaster and everything you’ve worked so hard to build can crumble quickly. It takes the right systems to be in place and a team of people who can help get those systems in place for you to be on the solid ground necessary to manage your business. Once those systems are in place you’ll be able to spend the time you need to make sense of the financial reports that will help you make proactive decisions about your business. When you are proactive in managing your money your business will be poised for economic downturns as well as for growth and expansion and any other surprises in life.
Here’s “the what and the who” that will get you going:
Get the right systems implemented
The accounting system – There are many to choose from: QuickBooks, SAGE (formerly PeachTree), or another accounting system that you like. The accounting system will track all the money that flows in and out of your business checking and / or savings accounts by vendor and customer. It is important that the structure of this system is implemented to mirror your business with concise revenue streams, cost of sales, and other related expenses. Reports that help you manage your business are generated from your accounting system any time you need them.
Planning & Forecasting – A system that allows you to budget, plan, and forecast so that you know if your business is on track with your goals. By comparing the plan and budget with what is actually going on gives you insight to any changes that you need to make before areas of your business get out of hand. This is the blueprint toward your overall vision.
Get a Binder & Dividers – For bank statements, credit card statements, and monthly financial reports. Because believe it or not you are the CFO of your business, not a position to sneeze at. The CFO is a highly respected position and is the voice of reason. So welcome to it and make some space for it!
Choose a great team – Bookkeeper, Financial Mentor/Coach, CPA
Hint – You most likely know one of each of these from your networking groups.
Ask them questions and have them walk you through what they will do. They need to understand your business as much as you do so they can help you define your financial structure inside the accounting system. A great structure yields great reports that will help you plan and make good business decisions.
A Financial Mentor/Coach
Helps you navigate through the financial system that you’re setting up. This person helps you implement a financial forecast, read the reports from your accounting system, manage cash flow, and will let you know which questions you should be asking a CPA, a bookkeeper, perhaps a Financial Planner, potential funding sources, and how to set up that financial structure in your accounting system.
The mentor/coach will also ensure that you have done two very important things:
• Plan to pay yourself which is important for both your business and personal welfare.
• Spend money in such a way that you actually “invest” in your business. That means money spent actually helps you reach those goals and visions with evidence that clearly supports that.
A good business plan and cash flow management will always incorporate a tax strategy. Building a good relationship with a CPA is priceless. They are a wealth of knowledge when it comes to taxes, tax strategy and other related advice
Other Financial People to Build Relationships with:
Bankers and lenders