When you’re a relatively new organizational leader, starting off from scratch or even purchasing an existing business can be quite overwhelming! Not only must you focus on marketing and getting new clients or customers, but also manage your vendor relationships and hire and oversee your staff. With so many balls to juggle during this launch phase, your accounting and finance operations may fall by the wayside – a path with disastrous results!
When it comes to your new business or nonprofit organization, here’s a prescription for success. Take these 3 actions to start off on the right path:
Hire an expert to handle areas outside your core competencies: You likely didn’t go to school to become an accountant, right? Don’t underestimate the amount of time it will take to get your accounting and financial operations in order and the value of doing it right the first time. An experienced accounting firm can advise you on proven, cost-effective ways to manage your organization’s financial operations. You’ll free up your time to focus on growing your practice and caring for your clients/customers and avoid costly mistakes that occur when you’re spread too thin across too many responsibilities. For more info, check out my article on why a second set of experienced eyes avoids financial blind spots.
Establish a solid accounting system: Setting up the right accounting system will avoid costly issues in the long run. If you hire an accounting expert as I recommend above, he/she should be able to address this. But if you decide to implement this on your own, make sure your accounting system:
• Seamlessly integrates with your online banking and bill payment functions. This minimizes your need for tedious data entry and reduces errors.
• Provides you with real-time access to key financial information so that you don’t have to guess at where you stand in terms of income and expenses levels and cash flow activity.
• Generates user-friendly financial reports to help you make informed financial decisions (e.g., setting prices/rates to manage profitability) and aids in preparing your tax filings.
• Is scalable so that it grows when your business grows.
• Is proven to be stable, reliable and secure.
I recommend QuickBooks Online for my clients, since this cloud-based solution addresses all of the above requirements.
Review your fees and pricing strategy: As part of your overall business plan, you’ll want to implement a sound pricing strategy for your various programs, services and product sales. This includes setting competitive prices, and managing the cost of equipment, staffing and other operating costs. It’s important to forecast your break-even points and to track and monitor your profit margins so that you can fine-tune your strategy as needed. An experienced accountant can provide significant help in this regard.
While there will be other financial responsibilities to address as you manage your organization, these three key actions are a great prescription to get you started on the right path for success!
If you have questions and/or would like to pursue other actionable steps to start your new business or nonprofit on the right path to success, please reach out to me. I’ll be happy to talk with you. Orin Schepps, Founder and CEO @consultanceaccounting https://www.consultancellc.com