How To Create a Business Plan for Small Businesses

April 11th, 2021 | Posted in Accounting, Uncategorized

At its most basic level, the Business Plan is roadmap for your business. It will outline your businesses goals, as well as how your business plans to achieve those goals. Good business plans take it one step further and create buzz about the future prospect of your business. In that sense, the business plan is as much about selling your business, as it is about carefully setting goals and planning how to achieve them. Poor planning and financial management are the leading causes of business failure – don’t fall victim to this easily avoided pitfall.

Composing a compelling business plan can be a nerve-wracking, and time consuming task. To help you get organized here is a logical outline of information that all business plans should include.

  • Executive Summary
  • Business Overview
  • Sales and Marketing Plan
  • Operating Plan
  • Human Resources Plan
  • Financial Plan
  • Action Plan

Free full version, The Small Business Accounting Kit 


How Much Do Accounting Services Cost?

April 10th, 2021 | Posted in Accounting, Uncategorized

Without fail, we get asked “How much do accounting services cost?” by about ten percent of our initial inquiries. The question comes in various forms, from “What is your hourly rate for a bookkeeper?” to “Can I get a ballpark of what it would cost for a daily bookkeeping service?” but the questions all boil down to one main concern: Cost.

Of course, we understand that cost is and will always be a factor in decision-making. After all, budgets must allow for the cost and an appropriate return on the expense must be present. But we worry sometimes that this question, when taken out of context, fails to address the greater issues at hand. As such, we do not have a pricing matrix per se but rather we create custom fixed fee monthly quotes for each prospective business based on the scope and complexity of the work required. However, we can address cost considerations in different ways to help answer your pricing concerns.

What About An Hourly Rate for Bookkeeping Services?

This may come as a surprise (unless you’re a big fan of accounting yourself) but virtually any business can boil down their expenses and costs to some form of an hourly rate. After all, the number of employee hours spent on a given project and the employees’ salaries can easily provide a rough hourly estimate through basic arithmetic. As a responsible business, we have to know what the cost of our services is to appropriately budget and set pricing. However, actually billing at an hourly rate doesn’t make sense for us due to a variety of reasons.

Scope and Complexity of Work Isn’t Always A Straight Equation

This may go without saying but not all bookkeeping tasks are as simple or as complex as others. Some of our clients require incredibly complex reporting and financial management, which requires oversight by highly trained professionals. These same highly trained professionals may also be the ones monitoring and managing more common bookkeeping tasks—but charging clients a single “rate” for services would potentially put them at risk for paying hourly rates that are not always in line with the level of knowledge required to deliver a service. Instead, evaluating an approximate amount of time required to perform each account task in a period and establishing monthly, fixed fee rates for the complexity of work required is more likely to create a fair price.

Price Fluctuations In Monthly Fixed Fees For Accounting Services

At the same time, we recognize that our clients like to have options when it comes to their accounting services. From adjustments in frequency that increase or reduce the number of times work is performed to service add-ons that increase or reduce the complexity of reporting and analysis, we provide up to three “service tiers” for accounting services quotes. Some examples of typical variations include the frequency of review with a controller, managed employee expense reporting, payroll management and sales tax reporting. Sometimes simple adjustments in frequency, such as from monthly to quarterly, can have notable effects on pricing.

Interested in finding out how much accounting services would cost for your business? Contact us for a free consultation.

 


Why Our Clients Are Relying On An Outsourced CFO

April 9th, 2021 | Posted in Accounting, Uncategorized

Throughout the course of our work we find ourselves engaging with and working in accordance with many different types of professionals to assist our clients. One of the most common professionals we work with is the company CFO—and for good reason. Of course CFOs rely on accurate financial statements and thorough accounting, which is the bulk of our daily work for clients. As we’ve honed this working relationship and find ourselves engaging on more comprehensive levels with our clients’ CFOs, we’ve started to notice a bit of a trend: Many of our clients are increasingly reliant upon outsourced CFOs.

What Is An Outsourced CFO?

So what is an outsourced CFO you might ask? And how does it differ from a conventional CFO? Well, in actuality the specifics of the job functions don’t differ so much between outsourced and conventional as they may between different company types and sizes. However, where they differ substantially is in the flexibility and adaptability in the particular application of their skills.

For many of our clients, an outsourced CFO is proving the ideal channel because it provides the high level CFO services they require without the burden of hiring and keeping on staff a seasoned CFO. For growing and established businesses with revenues up to $30 million (our typical client type), an outsourced CFO provides all of the expertise and accountability without needing to be kept on staff and on payroll at their pay scale. Instead, they can utilize the CFO services they require at the frequency they require, whether that is once a week, once a month or on a project basis.

What Are CFO Services?

Of course, CFO services vary just as greatly. CFO services run the gamut, from overseeing the totality of accounting and finance functions, securing funding or financing, engaging with other key professionals, ensuring regulatory compliance, reviewing and negotiating contracts and insurance or managing restructuring, buy outs and company turnarounds. From our startup clients seeking funding to our established businesses looking to explore new growth opportunities, the CFO role is an integral part of their development and decision process.

For more information on Outsourced CFO Services, please check out our recent blog post on About.com’s new Accounting Channel.

 


Smart Tools to Improve Cash Flow and Collections

April 8th, 2021 | Posted in Accounting, Uncategorized

No business can operate over the long term without generating sufficient cash inflows. Even a profitable firm will struggle if it can’t collect enough cash to fund operations. If cash collections are too slow, there are some great tools that can help you improve the process. When your business faces this challenge, an outside expert can help you address this critical issue.

Understanding Working Capital

Working capital, broadly defined as current assets less current liabilities, is needed to address cash flow and liquidity. In this case, “current” refers to 12 months or fewer. Current assets include cash and anything you expect to convert to cash within 12 months. Inventory and accounts receivable are two current assets that can be sources of cash. You collect on accounts receivable to generate cash and sell inventory to collect cash.

How Much Cash Do You Need?

If you need a system to collect receivables faster, how much cash is enough? How much cash do you need each week or month to operate your business? The answer to that question will be your collection goal for a given time period.

Technology can help you find out your cash needs quickly. As this article explains, Expensify is a mobile app that helps a business process and pay expenses remotely. The app will store your expense payment history. If you need a quick estimate of your firm’s expenses, you can check your Expensify activity.

If you find estimating your cash requirements difficult, an outsourced controller service can help by forecasting your required cash flow. The firm can also help you determine your cash needs and create a plan to collect cash faster.

Implementing Your Collection Plan

Assume that Bob’s commercial plumbing business requires $30,000 a week to operate. Bob’s outsourced controller helps him with this calculation. He realizes that the next step is to implement a cash collection program.

Quickbooks online accounting software offers a variety of reports to track your progress on cash collections. An aged accounts receivable report, for example, will group your receivables together, based on the date of each invoice. This report provides a quick snapshot of how fast you’re collecting receivables.

A lack of manpower can prevent a business from generating more cash flow and profit, as explained in this article. In this case, an outsourced controller sets up a system to generate and review accounts receivable aging reports each week. The controller sits down with company management and documents a formal collection policy. The plumbing firm follows up with delinquent customers using the new policy. Outsourcing this work helps the business collect cash faster.

 


When Is A Good Time To Switch Accounting Services

April 7th, 2021 | Posted in Accounting, Uncategorized

From improper classifications to the 1099s you still don’t have prepared because you’re tracking down corresponding W-9 information, your taxes are going to need an extension—again. This is the fifth year in a row you have agonized through tax season, wringing your hands and wondering how you can fix it yet the dread you feel when you think about switching accounting services has kept you in the same annual cycle. To avoid the same crisis next year, it is officially time for you to figure out when is a good time to switch accounting services.

How Much Back Work Will You Have?

This is a question only you can answer, as there is no one-size-fits-all for any business. Do you plan on having your new accounting services fix last year’s books? Then you’ll want to find a new provider without delay. The faster you switch, the faster they can get on with their work. This will save you time and money over waiting and letting the work pile up.

Starting Fresh With New Accounting Services?

You can technically start any time with accounting services but be mindful of your current situation. If you plan on terminating any of the staff currently working on your accounting, you want to make sure either their work is complete or you have a plan in place to finalize their previous work. This is especially true if you don’t want your new accounting services to provide any back work support but still need your completed books for last year. The more your accountant is still waiting on from your current bookkeeper, the more sensitive you need to be to announcing a switch.

Can You Afford To Wait?

Of course, if your accountant isn’t getting any information from your bookkeeper, simply waiting for information and completed books isn’t likely to be of much help (or simply, happen at all!). If your books are a total mess right now, you may be better off making the jump to new services without delay. After all, do you really have much else to lose?