Of all the potential pain points SMBs can experience, managing business finances is one that’s almost universal. Founders and owners could spend hours each week logging day-to-day transactions, allocating costs correctly and updating cash flow forecasts. This workflow simply isn't sustainable — especially during periods of high growth. So, naturally, they seek help. But traditional accountants and bookkeepers may not be the right fit. Here’s why...
Challenges with traditional Accountants and Bookkeepers
We can think of “traditional” financial support teams as those who are office-based, work from mostly physical ledgers/reports, and who sit externally to the rest of your team. Companies have been relying on these services for hundreds of years. But there are certain drawbacks to this way of working — for growing online/digital businesses in particular:
Expect to pay by the hour for an accountant or bookkeeper, and because so few of them use automation to speed up their work, you could end up paying more than you should for their service.
Again, because they are juggling so many clients, your accountant or bookkeeper could take a while to get back to you. This can be really frustrating when you’re running a fast-moving online business and need answers or information at your fingertips. Not to mention the fact that some accountants and bookkeepers present reports on a quarterly basis, meaning you could be working with data that’s nearly 3 months old.
Many small accounting and bookkeeping firms (most of which are one-person businesses themselves) juggle dozens of clients at any one time. The potential for them to make errors is very real, and if it happens to you it could lead to you making the wrong decisions for your business, based on inaccurate data.
Lack of understanding of online businesses
This is possibly the biggest challenge of engaging these more traditional forms of financial support. Not all bookkeepers are familiar with the process needed to do their job effectively in the ecommerce space. Tools like Shopify and Stripe are mysteries to them, because they haven’t kept up to date with the changing technology landscape that online businesses now occupy. Now, we’re not saying that all accountants and bookkeepers will give you all of these problems. There are many out there that are doing a great job. But that doesn’t mean that there’s not an even better way of managing your business finances.
Introducing Virtual Finance Department (and a way of avoiding these challenges)
What is a virtual finance department?
Well unlike a virtual receptionist or a virtual office, there’s a lot more to a virtual finance department than an accounting team who works remotely. A virtual finance department provides the exact set of skills you need for the stage your business is at right now, covering all of the essentials — like accounting, client billing and reconciliations — plus any other financial support you need to amplify business impact and drive long-term performance. The roles that a virtual finance department can fulfil include Tax Accountant, Bookkeeper, Virtual Controller and Virtual CFO (Chief Finance Officer). This arrangement represents the next level in managing your business finances, thanks to the following benefits:
Virtual finance departments are, by their very nature, heavily geared towards efficiency and automation where possible. Data entry is a great example of this. What might take a bookkeeper 2 hours to do can be finished in an instant by the cloud software that virtual finance departments use.
Virtual finance teams have access to real time insights and data that can help you spot opportunities to grow your business more rapidly. They communicate this information in the moment, and are on-hand when you need them to explain in more detail. The response times of a virtual finance department are head and shoulders above what you could expect from traditional financial support — empowering you to make the right decisions and capitalise on the right opportunities, faster than ever before.
Virtual finance teams work from software, reducing the margin for human error. Add to that the fact that you have more than one set of eyes on your financial data and the potential for mistakes is a tiny fraction of what it would be otherwise. With a full complement of virtual finance professionals — accountant, bookkeeper, Controller and VCFO — you can bet that every scrap of data you see has been checked and double checked for maximum accuracy.
Perfect for online businesses
A virtual finance department can benefit any type of business. But they’re particularly suited to modern, digital organisations. After all, you need a financial team who understands the landscape you’re operating in — and knows the sorts of challenges you might face. That way, you can trust your virtual financial department to give the best expert advice, if and when you need it.
Helping shape your financial strategy and looking to the future
That leads us nicely into the final, and arguably most important, benefit of virtual finance departments: their strategic expertise. Unlike traditional accountants and bookkeepers, who review payments and actions that have occurred in the past, virtual finance teams look towards your business’s future. Working in real-time, they can not only spot mistakes but opportunities too, something which is invaluable to your business’s growth. This rings especially true during our current economic climate with the COVID-19 crisis. Put simply: you need more than a number cruncher. Your business needs a financial partner who can respond rapidly, efficiently and strategically, with your goals front and centre. It’s no wonder then that virtual CFOs are becoming increasingly popular with small but growing businesses — providing crucial insight and guidance, in lieu of a highly paid, full-time CFO. Outsourcing this support brings that experience into the business, while minimising risk and cost.
Virtual finance departments are perfect for small, agile businesses that work partly or fully online and are looking to grow fast. If this is you, then get in touch — Finabling might just be the growth tool you’ve been looking for.