As a CEO of a startup, it’s tempting to think that you have to do everything, including the managing costs and spending of the business. But if you set up your financial processes well from the beginning, it will help set the framework for you running a successful business.
These 5 fundamental pointers will free you up for the bigger picture things you like doing best.
1. Build a dedicated finance team
The instant you have the means to do so, hire an accountant as part of your team. As well as sorting out day-to-day functions, they will be able to assist you in the direction of the business’ growth through budgeting and forecasting.
Some things to keep in mind when working with your accountant is to sort out how expenses are paid and reimbursed, who scrutinises and oversees expenses, how you process invoices and where receipts are kept. Develop a company expense policy so everyone knows what is and is not acceptable. Ensure that everyone knows who is responsible for what and that they are familiar with your financial systems.
Your bookkeeper and accountant don’t need to work in-house. Many businesses these days are in fact outsourcing their accounting; this is a significant cost reduction in wages and entitlements. Having them in place as soon as possible will help you get on with growing your business.
Related: How to start and sustain a successful Tech Business?
2. Have simple and convenient expense validation
Though a finance team will free you up to do other things, as the CEO, you will still need to know how your business is spending money. This is easier when you are part of a small team, but as you grow, it can be harder to keep track of.
Automated systems can give you real-time expense validation that allows you to have oversight of company purchases and keep track of expenses as they arise instead of at the end of the month. Repeat expense payments can be automated, reducing the amount of paperwork and time.
Related: Why bad Financial Record Keeping means bad business?
3. Track all spending
Few things in life and business can be guaranteed but, sadly, an audit is one of them. It will be far less scary if your business is prepared. This means keeping a detailed record of every expense made, with the relevant proof of purchase. Put a system in place that categorises and itemises them, and aggregates and breaks down information in the most helpful way possible.
Create a cashflow statement and forecast. This will give you a snapshot of your actual and forecast monthly cashflow. A comprehensive spend management system will help you comply with relevant tax regulations and filing requirements.
Related: Cashflow is a lifeblood of your business, especially during the pandemic such as Covid
4. Offer flexible and secure payment methods
When you first start your business, you’ll probably be relying on the company credit card. As your team expands and your salespeople and other staff are charging expenses on a regular basis in different locations, this can become a real headache!
Many financial institutions offer expense cards tailored to individual staff members with monthly credit limits that can be set on an individual basis and broken down into categories of expenditure such as travel, accommodation or marketing.
The advantage for you as CEO is that you will now have access to a quick oversight of the team’s expenses daily instead of a horrid shock at the end of the month.
Related: Most CEO's miss these 3 things when scaling their business
5. Use online finance tools
Spend management systems simplify and automate the entire expense reimbursement and reconciliation process, eliminate paperwork and reduce manual errors. And you will save on costs as the finance team won’t be spending hours manually calculating the expenses of each employee.
As for online accounting systems, there are so many that you should consult your accountant as to which one is the most flexible for your business and that works the best with your other software, especially your expense management system.
A performance dashboard will give you an overview of your operating expenses to help stay on budget, as well as overseeing your marketing, sales and customer service.
Related: The importance of Dashboards in business: Why use Dashboard Reports?
Have you noticed our #FridayExpertTips... here's one that relates to #Technology
"Being a Tech Startup Founder usually means an exciting world of innovation and creativity. While it's great to do something you love, you need to make a living of it. Working with an Accountant that understands the Tech sector is a great way to master proof your growth plans."
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