CFOs Say Quality Bookkeeping is the future! Find Out Why.

As a successful small business owner, you understand that business ownership can be frustrating at times. There is too little time in the day and too many responsibilities that need to be handled for business owners. Often the responsibility of keeping bookkeeping and accounting is what pushes to the bottom of the list. Worse, taking time to strategy and set goals is often just a fantasy.

While most small business owners are good at many things related to their businesses, very few are skilled financial experts. Often, small business owners try to take on accounting services themselves. This can lead to further waste of time and inaccurate reports. Business owners know their time is probably not best spent playing the role of bookkeeper or CFO.

In the previous articles in this series, we reviewed many different reasons that traditional bookkeeping fails most small business owners. Business owners relying on a kind of traditional bookkeeping doesn’t put them in a position to grow their business. These owners would benefit from the concept of “enhanced bookkeeping”. This is the addition of a virtual CFO as a bookkeeper who doubles as strategic advisor and financial guru.

In this final article, we’ll go into specifics about what the addition of a virtual CFO can mean for your bookkeeping services, and then discuss what virtual CFO and enhanced bookkeeping services look like at Krieger Analytics.

Traditional vs. Enhanced Bookkeeping

If you have read the other articles in this series, you probably have some idea about the concept of enhanced bookkeeping. By now, you know the ways it benefits business owners. To recap, enhanced bookkeeping is a kind of supplement to traditional bookkeeping. Traditional bookkeeping is the practice of tracking and reporting financial data that most people imagine when they think of the phrase “keeping the books”.

Whereas traditional bookkeeping is backward looking and focused only on gathering and presenting data, enhanced bookkeeping expands upon those services by adding the reporting, strategy, and forecasting of a virtual CFO. It is a way for business owners to use financial data and reporting to plan for future growth and success.

Enhanced bookkeeping, in a nutshell

The specific services that enhanced bookkeeping entails can vary based on the provider a business owner chooses. But they will most likely include reporting tools like key performance indicators (KPIs) and dashboards. Services should also include some sort of strategic planning process. Lastly, they will definitely include consulting from a CFO or virtual CFO.

Enhanced bookkeeping includes forecasting, or predicting your business’ financial situation. Put simply, enhanced bookkeeping is what best practice business owners use to manage the accounting and strategy within their business.

Virtual CFO Services – Not one size fits all

If you are considering enhanced bookkeeping services for your small to medium-sized business, you may be understandably overwhelmed. Enhanced bookkeeping might seem like a good fit for your business, but it represents a significant change, and means another expense.

Business owners should understand that enhanced bookkeeping is not a one-size-fits-all service. Firms that provide enhanced bookkeeping services often do so with an eye toward the specific needs of the business they are serving. Small business owners, for instance, can start off slowly. As their needs grow, they can add more services as they see fit, or when they begin to see benefits to their businesses.

Even a few hours per month consulting with a virtual CFO can mean significant benefits for a business. This may be a good starting point for owners looking to expand their bookkeeping while being mindful of costs.

Enhanced bookkeeping at Krieger Analytics

How, then, will services from Krieger Analytics specifically benefit your business?

A Thought Out Approach

We have seen too many CFO providers try to service clients with a “we can do everything” approach. At Krieger Analytics we believe the background we have as both a business owner and working with other owners gives us a unique perspective. We have tailored three different plans of attack for working with our clients.

We have designed our services so that aach tier of our services is a well-thought-out approach to dealing with what small businesses need. We mix forecasting, reporting, strategy, and traditional bookkeeping to give owners a well-rounded scope of solutions.

Strategy – Setting goals and objectives

I often say that business strategy is one of the most misunderstood concepts. Too many consultants and owners think that strategy has to be a complicated process. Simply put, strategy is the process of identifying and accomplishing objectives. Further, owners need to have a system in place to track progress towards stated objectives. That is it!

While that sounds simple, there needs to be a process in place to accomplish this. The strategy process also needs a champion or an owner. This champion is responsible that the tasks and actions associated with the strategic process are adhered to.

One of the biggest benefits of enhanced bookkeeping with a virtual CFO is the emphasis on setting goals and measuring progress. It may seem like a no-brainer that setting goals is part of small business success. But many owners get so wrapped up in the day-to-day operations of their business that they forget to look toward the future. Or, because they aren’t financial professionals, they don’t know how to set realistic goals.

A virtual CFO should be the champion of your strategic process. This individual will use the data provided in financial reports like cash flow statements and balance sheets to help set achievable and actionable goals for your business.

Reporting – Better and Smarter

Here is a key difference between traditional and enhanced bookkeeping. Traditional bookkeepers are often excellent at making sure financial statements are accurate and timely. However, they often struggle to interpret the data. By interpreting the data, one can then truly understand what are the key drivers.

Further, traditional bookkeepers are very good at operating within their “box”. That box includes recording transactions, making adjustments, and producing final reports. However, when it comes to thinking creatively to create reports that may not be traditional, they struggle. This is where a CFO can help.

Doc Brown would have agreed that traditional bookkeeping doesn’t meet the needs of future-oriented business owners.

Forecasting- Adjusting to the Future

In the words of the great Doc Brown, “The Future isn’t written. It can be changed.” (That is back to the future for those not familiar with late 80’s cinema).

Let me quote to you some statistics on business failures in 2021:

For 33% of small business owners, the greatest challenge is a lack of capital.
38% of businesses fun out of cash

What if there was a way to determine when your business might run into cash flow issues? What if you could predict this month in advance, and then start to make plans to avoid this. Let me introduce you to forecasting.

Traditional bookkeeping is focused on making sure your business’ books are in order and last quarter’s finances accurate. Enhanced bookkeeping is focused on creating a plan for future growth. A virtual CFO will make use of tools like forecasting and KPIs, so that you have the data to plan for future success.

Courting Outside Investment

A consultation with a virtual CFO can help your business beyond providing enhanced bookkeeping services. CFO’s use their financial expertise to help businesses prepare to receive outside investment by making sure their financials are well-presented. In addition, they can help to structure potential deals and speak to potential investors in financial terms that most business owners aren’t well-versed in.

Look for Someone Who Has Walked Your Path

We work to tailor our virtual CFO and bookkeeping services to clients based on both our and their assessment of their needs. And we understand what small business success looks like, because I am a small business owner myself. I have operated a million dollar small business and had to work through sales, marketing, and operational issues. It is with that unique background we have designed our services.

Our enhanced bookkeeping services include a rigorous month end close, CPA support, and account reconciliation, to start. And we understand that taking a leap like adding enhanced bookkeeping can be daunting and sometimes confusing, so we never charge for support or calls for your staff.

Articles in This Series

We’ve put together a whole series of articles like this. Interested in learning more about why traditional bookkeeping doesn’t work? Are you ready to join the hundreds of thousands of other owners that are getting more out of their accounting services? Keep reading. Here are links to our other articles.

How Krieger Analytics can help

After article three in our series, you know the basics of enhanced bookkeeping. Led by a CFO or virtual CFO, enhanced bookkeeping services will help gear your bookkeeping toward the future. It can make it easier to create an overall financial strategy for growth by making use of concepts like forecasting. In short, your bookkeeping can be smarter and can help you make crucial decisions for your business.

When most business owners hear this their first reaction is “sure, but at what cost?”. There are two ways to respond to these questions. First, the cost isn’t much more significant. It’s not about doing your bookkeeping differently — it is about adding an element that your bookkeeping has been missing. It’s about adding the “brains” to your bookkeeping — forecasting, strategy, and analysis. Business owners can accomplish this setup for just a few thousand more each year.

Here is the second way to answer the questions – it’s at the cost of your business. Your competitors are doing this (at least the ones who are growing). The “big boys” who seem to have endless budgets are doing this. How can you afford not to? How can you afford not to have strategic goals and financial insight into your business?

Krieger Analytics specializes in outsourcing accounting services for small businesses. From bookkeeping to virtual CFO and controller consultations, and our background in entrepreneurship and finance means we know what running a business entails. Our goal is to meet your accounting needs without burdening you with the costs of a full-time accounting staff. And, we understand your position as a small business owner, because we have experience running businesses ourselves.

Have questions about anything discussed in this article? Interested in what valuable insights a CFO and business owner has for your business? Conversations are free, so don’t hesitate to reach out at [email protected], and let us explain how our services could be the right fit for you.

Why Bookkeeping Fails – Enhanced Bookkeeping is the Future