Are you looking to grow your business? As part of your strategy, are you putting together the right accounting and finance teams to help you achieve your business goals?
Many entrepreneurs are involved in the accounting and finance side of the business as a way to save money – and sometimes because there’s no internal personnel to handle it. As companies seek to grow, a section of the business that often doesn’t get enough investment in dollars and manpower is the accounting department. But not paying attention to this crucial part – regardless of your industry – is what stops companies from becoming a competitive force.
A finance team is a department within your organization that handles all functions related to your company’s financial well-being. Generally, a finance team is responsible for a variety of tasks – including accounting, recordkeeping, administrative work, and cash flow. A finance team is also in charge of all duties related to your organization’s capital funds, including acquiring and managing these funds. Often overlooked, the finance team has the knowledge to teach you how to effectively grow your business.
A finance department is a group of teams, with each one handling a different aspect of your organization’s funding. Here’s a list of what a finance team can do for your business:
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The finance team plays a crucial role in any organization’s success. Regardless of how small your business is, this is one department that you shouldn’t wait to add to your company. A good finance team can create a map leading to major profits.
A strong finance team can grow your company in ways you’ve never imagined. While you may know the direction you want your business to go in the future, a finance team has the expertise to break that long-term vision down into practical steps with a realistic timeline. They use detailed, current analytics of your business to provide your leadership team with a much more intricate overview than the standard ones many small businesses rely upon. This information often accounts for growth through funding sources, which can catapult your success.
This is why it’s so important to create a strong finance team – made up of more than just an accountant. It should include a cluster of experts who are not only familiar with the legalities of your industry but have interpersonal skills to explain the analytics to your management team.
Small businesses often do not focus on building a strong finance team, but the value of one should not be underestimated.
Credit lenders across the board rely heavily on your company’s financial reporting abilities when considering your loan application. Consequently, the quality of your accounting and finance units is important, as are accurate financial statements. With better reporting and a strong finance team comes a higher possibility of financing options. [Looking for funding for your business? Check out our picks for the best small business loans and financing options.]
However, if the financial data you provide has many holes in it, took months to procure, or doesn’t reconcile, the likelihood of finding a willing lender will be low. There are options – like invoice financing and a business equipment loan – that can still provide the capital solutions you need, but they may come at a much higher cost. There are times when new top accounting software is necessary, but other times when hiring an experienced controller is worth the investment.
The most important approach is to have self-awareness and transparency to determine if you’re investing appropriately in this crucial part of your business. This decision has ripple effects on your profitability, your ability to borrow money, and your daily stress level. While you may find yourself preoccupied with the big picture, remember it’s the small things that will get you there, and a good finance team always has its eyes on the details.
Dachondra Cason contributed to the writing and research in this article.