Some might look at the title of this article and say “Oh ya, how do you know?”
- Are you one of the 29% of businesses that don’t have a bookkeeper?
- Are you one of the 61% of business owners that don’t review your financial statements on a regular basis?
- Are you one of the 75% of businesses under $5 million in revenue that doesn’t have a CFO or Controller?
- Are you in the one-third of businesses that believe you overpaid your taxes?
Odds are, you fall in one of those groups. How do I know…because as a number’s geek, odds say that the above statistics cover about 95% of private business owners.
However, I get it…I really do. First, accounting and finance aren’t sexy like sales or marketing. After all, a business needs sales to survive. A business needs marketing, needs operations, and so business owners often eschew accounting and finance until they have the “luxury” of dealing with it.
Next, it’s expensive. Those accountants, CFOs, controllers, and their other friends cost a lot of money. A business bookkeeper can write checks and get things to my CPA come tax time (just ignore those stories about bookkeeper fraud) so why do you need anything else?
There is a better way. First, let’s quickly talk about why you need a strong department. Here are a few quick advantages that business owners who have a full accounting department have over those that don’t.
- They Have a Better Business Strategy – They are more focused on executing and achieving their goals (and statistics say, they are more profitable).
- They Are More Agile – These business owners have reporting that tells them how and when to adjust.
- They Pay Less in Taxes – These owners can project how much they will owe and make timely adjustments to pay fewer taxes.
- They Don’t Worry about Theft – Employee theft is a big deal (75% of employee have stolen from an employer). A controller helps put controls in place to prevent theft.
- They Accomplish Their Goals – If you have goals and a plan to accomplish them, odds are you have a better shot than those who don’t.
- They Know Their Business – Do you think you know who your customers are? Those with an accounting department know not only who their customer is but how much they buy, when they buy, and where their customers are coming from.
OK, OK, you say, this all sounds good. But I still don’t have the budget for an accountant, controller, and CFO. You’re not alone. This trio is expensive (probably over $350k+ a year in most markets). What most business owners do at this point is hire a bookkeeper and hope they will get to the point where they can afford more.
However, there is a better way. The business owners best friend is outsourcing (and not just in accounting, but that is a different article). For a fraction of the cost above, a business can get a factional or part-time person for each of those roles. Let’s face it, a business owner doesn’t need 40 hours of any of their time each week. They need 10 hours of CFO time, 15 hours of controller time, and 20 hours of bookkeeping time each month. This is available at a fraction of the cost above. Often this setup can be achieved at less than the cost of a full-time employee.
So there you have it. I have figured out your accounting woes. What are you waiting for? No more excuses.
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