How to Organize Your Startup’s Finances Without an Accountant and a CFO

When a business is new, it’s only normal for the owner to handle everything themselves — inventory of goods, marketing, HR, finance, and so on. But when it comes to finances, special attention is required, not to mention expertise. It may be viable for an entrepreneur to work on the business’s finances for the first year or so, but when revenue is already growing, professional involvement will become necessary.

But if you’re a first-time entrepreneur, don’t be pressured to hire an accountant right away. You can definitely organize your finances in easy steps until you’re ready to delegate the task.

How to Set up Your Business’s Financial Oversight

You can entrust your startup’s finance department to your friends or family members. But accounting and finance are the heart of the business, and thus need to be overseen by professionals. While you can be your startup’s accountant, comptroller, and CFO in one for the meantime, you have to employ their individual services in time.

Delegating financial duties to the right professionals has cost-value benefits. This includes keeping your business fully-funded, which what a CFO does. For your part, you can dedicate your time in achieving the goals of the business.

To set up your startup’s financial oversight, here are the key tasks you need to accomplish:

  • Bookkeeping
    • Recording of sales, expenses, accounts payable, and accounts receivable
    • Monitoring of fixed and variable costs
    • Managing payroll, taxes, and insurances
    • Documentation of essential forms and paperwork
    • Preparation of reports for the stakeholders, government agencies, stockholders, and employees
    • Paying bills
  • Comptroller Duties
    • Signing checks and financial reports
    • Establishing financial policies
    • Creating reports for internal review
    • Handling insurance and risk management policies
    • Handling of the budget
    • Develop tax strategies
  • CFO Duties
    • Directing the business towards potential mergers, acquisitions, public offerings, and other forms of change or expansion
    • Complex decision-making
    • Managing relationships with stakeholders
    • Planning short- and long-term financial goals

Suffice to say, your duties in finance are indeed a handful. But don’t be intimidated. Instead of focusing on the workload, note these steps in organizing your finances:

1. Track Income

Using Excel or a bookkeeping software, track your income to keep an accurate record of the money you’re bringing in.

2. Track and Audit Expenses

Simultaneously, track your expenses and ensure that you’re paying bills on time. And by audit, this means determining the business expenses you can deduct from your taxes.

3. Open a Business Bank Account

To avoid confusion and potential misuse of funds, open a separate bank account for your business. This will also help you track your income easier.

4. Choose the Right Business Structure

Registering as a limited liability company (LLC) makes the most financial sense. That’s because if you only register as a sole trader or proprietor, you’ll be personally incurring the losses of your business. But as an LLC, your business will become a separate entity, and therefore liable for its own losses and issues.

Startup team5. Systemize Incoming Payments

Determine whether you’ll only accept cash payments, or also allow credit card and bank transfer payments.

6. Go Paperless

Sticking to digital solutions will help in preventing lost paperwork, such as receipts or invoices. Having a spreadsheet or bookkeeping software will help you keep track of your cash flow, and ensure that you’re keeping up with your tasks.

7. Hire a Temporary CFO

If you can handle the bookkeeping and comptroller tasks without difficulty, look up some temporary CFO firms, and employ their services in your business. This will complete the three primary financial manager posts in your startup. And of course, a CFO will gain your finances an expert’s perspective, which will take it to the right direction.

Taking your business to the point where you’ll need a bigger team isn’t done overnight, so keep persevering, and know when to delegate. Too much multi-tasking may burn you and your business out.

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