The leader of a growing company needs eyes in both the front and back of their head. They must look forward to project cash burn and capital needs to support their growth. But solid financial projections require reasonable assumptions rooted in past performance — sales growth, profit margins, fixed vs variable costs, cash flow and other key performance indicators (KPIs).
The fact is, you can't do a good job of planning for the future (forecasting) without timely, accurate and thoughtful scorekeeping (bookkeeping) to give you clear insights about the past.
Looking Forward and Looking Back
"Scorekeeping" and forecasting call for different sets of skills. In some larger companies, they're even organized as separate teams: an accounting team that keeps score and a finance team that analyzes results and forecasts ahead.
Smaller companies with limited resources often attempt to assign these roles to one person — who may not have both skillsets — possibly an office manager, an office admin or even the business owner themselves. These businesses may find they end up scrambling to sort out year-end filings during the critical time when they should be planning for next year. Or that they're too busy keeping score to plan for and execute on growth.
Seeing What's Right in Front of You
Even bookkeeping that's good enough to avoid mistakes and hit all the filing deadlines isn't necessarily good enough to support your long-range plans. Growing your business requires a proactive approach.
The best bookkeepers don't just follow accounting conventions. They're also sharp and experienced enough to understand how their work product will be used to manage the business ahead. In addition, they can capture and report on the company's data in a way that supports strategic analysis and drives confident decision making.
If you aren't getting what you need from your current bookkeeping and finance solution, you should take a look at outsourcing.
At Supporting Strategies | Los Angeles, we perform the looking-back functions while also looking forward. Because we have experienced bookkeeping professionals and seasoned finance leaders on staff, our dedicated team of experts provides both enterprise-level bookkeeping and finance services to transform the way small businesses operate and position them for optimized growth. Plus, we steer clients away from the navigation hazards that can run a small business aground and facilitate smooth sailing from startup through ramp-up.
And isn't that what you pictured when you launched your business in the first place?