As a small business owner, you’ve grown your company to a decent size. You are impressed with the results so far, but you still want more. One overlooked aspect of growth is the ever growing need for more support from your Finance Department or even the creation of one!

I know – you HATE accountants! You despise having to pay someone to do your taxes to only pay more for the taxes themselves. It has become a necessary evil of business, but there is far more to finance. Some of the roles or responsibilities even give you a return rather than just sucking you dry.

Remember, the more you grow, the more you’ll be aware of these responsibilities. You’ll probably want to start diversifying the roles across several people rather than just one or two people in charge of everything. This will lower your risk of internal theft AND give you faster and better results.

Accounts Payable

Ensures that all suppliers and vendors are paid. The person in charge should verify that expenses are accurate and are coded correctly. How often do you come across expenses that end up in a completely random account?

Accounts Receivable

Ensures that all customers are billed and that you get paid. The person in charge records revenue in the books and makes sure customers know how much they owe.

Budgeting/Forecasting

Based on historical information and management’s expectations, budgets are the numerical representation of a business’s goals and vision. Those budgets can then be used to forecast the future performance of the company – it can be either future cash flow or future profits.

Business Strategy

The strategy is the plan used to reach a specific goal. The finance department is critical towards setting the plans because they are able to give advice towards what certain actions will give you the most return. Strategy setting should be a team effort with a CFO or Controller as an integral part of the process with the Executives.

Cash Management

Ensures there is enough cash to keep operations running and all cash transactions are accounted for. We want to ensure the proper level of cash for future needs. This is a big fraud risk area and special attention should be made to the people in charge of this area.

Fixed Assets

This is the property, plant and equipment of the business. These items are used in the business processes to create revenue for the company. For example, computers help a consulting firm do analyses and prepare reports, which creates revenue for the business. Issues to keep in mind here are accounting for them properly, depreciating them accurately, and maintaining the investments with proper repair and maintenance. We want to maximize our investments in assets for the highest returns.

Financial Reporting

Here, we capture all the transactions and turn them into meaningful reports for owners, bankers, investors, employees, etc. Remember this: “What gets measured gets managed.” – Peter Drucker, management theorist. The trick is to provide accurate information in a timely manner.

Financing

How are you going to get that cash you need? There are tons of options – bank loans, partner investment, outside investor, etc. We need to track who we owe, how much we owe and when it’s due. We also want to make sure that we aren’t over-leveraged – meaning you’ve borrowed too much money and cannot make payments on the debt. (Personally, I’m not a big fan of debt, but I know it is a necessary evil for certain businesses.)

Insurance

Business insurance, health insurance, liability insurance, umbrella insurance, etc. The whole point here is to look at the risks of your business and lessen those risks with the appropriate amount of insurance coverage.

Payroll/Benefits

First and foremost, we want to ensure your people get paid. But, we also need to make sure the withholdings are paid, we have the right paperwork for each employee, we have the best benefits in terms of value for you AND the employees, etc. Several small businesses will outsource the HR function, but you still need a business liaison to stay on top of everything.

Systems and Process Management

This one is fun! The finance department looks at how the business operates and looks for ways to make your business more efficient and effective. The point is to automate as much as you can (in a smart way) to increase the bottom line!

Taxes

I hate it as much as you, but we all have to pay taxes. For businesses, you need to think about business licenses, property taxes, sales taxes, payroll taxes, income taxes and the list goes on. But, the key is to know what taxes you need to be aware of based on the type of business you have and your location, and stay on top of minimizing your liability.

So, I think I’m over-whelmed just writing this! The finance department really does do a lot of stuff. We touch almost every aspect of the business. I see it as the backbone of your business. If you have a weak foundation, how on earth are you going to be able to sustain growth?

Now, it doesn’t have to be a daunting task. You can give multiple responsibilities to one person. You can always outsource some of these functions. You can even hire a Virtual or Part-time CFO, like us, to help manage all of it. Whatever you do, don’t ignore it. In this case, ignorance isn’t bliss.