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  • Writer's pictureDiana Miret

Question # 34: Do I need a financial team?

Do you have a team of people that you have hired to serve as your financial advisory team?
The bigger your business gets, the more you need a solid financial team behind you.

Let me break this down for you so you know who you need and when.

When you first start out in business, a bookkeeper and CPA are a very important part of your team.

One of the first people you need to bring on to your team is a CPA. This important individual will advise you on the best way to start your business, the filing structure such as LLC or Corporation. They will advise you on ways for you to save on your future taxes on all that beautiful profit you will be making.

Make an appointment with your CPA AT LEAST every 6 months - not just at tax time. Bring your financial statements and talk about how your business is doing. Ask questions and get their best advice. Share with them how much money you are planning to make, spend and keep in the next few months.

Next, you should hire a bookkeeper to do your books. I know I know … you are small and not making much money so why incur the cost? I can tell you from experience, every bookkeeping mess we clean up at PIVOT starts with “I didn’t hire a bookkeeper so I kept using my spreadsheet and bank statements and now I am in trouble.”

Or my personal favorite: “it’s tax time and I only have bank statements to give to my accountant.”
If I had a buck for everytime we hear that, I could buy myself a TESLA.

Here are 5 signs it's time to hire a bookkeeper:

  1. You are strapped for time. Time is a resource we cannot renew or stockpile. ...

  2. You're missing things. ... deductible expenses and receipts

  3. You're behind. ... entering your numbers, reconciling bank statements, etc.

  4. Taxes are torturous. ... because the data is not at your fingertips.

  5. Profits aren't increasing.

Important information: meet with your bookkeeper each and every month to review your statements and understand each and every line of your Profit & Loss statement. EVERY LINE!

Once your business is making 6 figures or more a year, it is time to think about hiring a fractional CFO. This person will help you understand your cash flow and profitability. They will track important metrics and help you get financial clarity on the cash in your business. You can hire fractional CFOs to keep the costs low. Hiring these people full time is expensive. You will do that later in your growth journey. For now, a fractional CFO (like me) is less expensive.

CFOs also help you do cash forecasts so you can know when you can hire people or buy equipment or offer benefits to your employees. We help you sleep well at night knowing what your cash is doing. And if your cash is disappearing we will tell you where it went and how to stop the leakage.

Once you have multiple 6 figures in revenues and the IRS wants tax payments from you, you need to add a Financial Planner to your advisory team.

These people will help you put a plan together for your financial freedom and save for retirement.

In summary, your financial advisory team should be made up of:

Your CPA
Your bookkeeper
Your CFO
Your Financial Planner

These are your dream team. These people will keep you out of financial trouble and help you feel like you are in control of your money and business like no one else. They are YOUR advisors. Use them!

Sit down and think about it.

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