Requisites for Good Financial Management for Small Businesses

Four must haves for optimal financial management

 

Set up the right financial management regime at the get-go and then you can spend your days on operations and sales.

It isn’t expensive. It is efficient. It requires planning. It works for all companies. 

You do not need to hire full-time employees.  You need to hire consultants with the following skills:

1.  A Bookkeeper –

Who can set up an online program to handle revenues and operating expenses.

Once the program is set up for your company the bookkeeper can make entries from an offsite location.  This may require 1/2 a day a week. There are many accounting firms that can provide this type of bookkeeping service plus a number of independent contractors.

Internal records should be reviewed monthly by management.  Your system should allow you to make comparative analyses. Management cannot make financial decisions if records are not kept and reviewed periodically. Do not wait for year- end financials to make strategic decisions.

2.  A Payroll Service

If you have full-time employees and payroll taxes must be made quarterly, use a payroll service company.

If you have third-party services you can pay these consultants with 1099s. Make certain you comply with the regulations regarding part-time vs. full-time employees. Your accountant can advise you on this matter.

3.  Accounting Services –

You should have a contractual arrangement with an accountant who will file timely reports to the IRS.  If your bookkeeping records are kept current, there is no delay at year’s end.

4.  A Financial Analyst

This is a specialist who can assist you in determining what aspects of your business should be altered or what aspects should be expanded. 

A good financial analyst can readily provide advice based on historical financials. They look for ratios, key financial metrics (such as Cost of Goods Sold and gross margins), and consistencies or inconsistencies in your record keeping.  They are not advising you on tax ramifications. T

hey are concerned principally with improving operations and profitability. They know what investors and lenders (both equity and debt) want to see when analyzing a company. They help position your company for growth and recognize the operating strengths and weaknesses from the financial records.  Do not underestimate their value.

All these professionals are part-time consultants — each with a different set of skills.  Collectively they contribute to the sound financial management of the company, both now and into the future. 

Each one plays a different role, but all are required if management sets goals and wishes to achieve them.

Related articles:

3 Questions To Optimize Your Financial Performance

3 Action Steps to Financial Management

Breaking Down the Set Up of Small Business Financial Records

Marj Weber
Marj Weber
Marjorie Weber is currently President of Primed 2 Grow Inc. providing small business owners with the resources and procedures required to access capital (both equity and debt). She commenced her career as a N.Y. real estate investment banker and over 20+ years has mentored hundreds of successful businesses. She leads financial literacy workshops (provided by the 501c3, Financial 4 Biz), and one-on-one mentoring. Between 20210 to 2014 she was chair of Miami Dade SCORE. From 2014 to 2017 Marj served as a financial advisor for SBDC/FIU as well as served as an advisor to the Goldman Sachs 10,000 Small Business Program, the SBA Emerging Leaders Program, training for Veterans seeking an entrepreneurial path upon retirement from the service. She is a Latin Business Today advisory board member and is also working with The Beacon Council as a partner for their small business Xcelerator Program. Marj has facilitated workshops under the auspices of Miami Bayside Foundation, Little Haiti Cultural Center and several local banks. has facilitated workshops under the auspices of Miami Bayside Foundation, Little Haiti Cultural Center and several local banks. She commenced her career as a real estate investment banker in New York.