At the start of 2019, there were 5.82 million small business (0 – 49 employees) in the UK. Many of these companies were started by business owners who have a very specific, specialist skill and experience. However, there are many skills a managing director requires for their business to flourish.
One day, you’re a salesperson. Next, you’re updating the accounts. A short while later, you’re up to your eyes in operations, and then you’re constantly preparing to interview new recruits.
The Role of a Bookkeeper
Simply put, a bookkeeper is someone who can manage time-consuming tasks of raising invoices, paying suppliers and keeping your expenses up to date.
No matter the competence of your bookkeeper, you may sometimes need to go a step further and enlist the support of a finance manager or director. A fundamental duty of a director is to have a finger on the pulse of the finances, which is essential for strategic decision making and planning the growth of the business.
Every effective company will also have an accounting system. Assuming the bookkeeper has done their job properly, this allows you to create the reports upon which you can then base strategic decisions.
As example you might be:
- Reviewing the accuracy and feasibility of budgets
- Assessing and appraising profitability of sales
- Producing P&L reports or creating a 3-year forecast
- Producing scenario-based reports for different operating models or approaches
- Revisiting forecasts based on known or predicted market changes
Ask yourself the following:
- How confident are you that these reports are accurate?
- Are you sure you have all the information you need?
- Are you interpreting the information correctly?
Review, Challenge and PlanHaving a second pair of eyes and someone to check your reasoning becomes increasingly valuable. Is it time to ask your accountant to step up or hire a finance director; or is there an alternative that better suits the current stage of your business - one that can bring wider, yet more impactful insight to the table? If so, now could be the perfect time to consider business coaching.
Not only will you gain another, experienced pair of eyes to help you check, review and plan, but you will also gain someone who understands the broader aspects of business and can test your level of critical thinking.
Conclusion
You may find that you have a very different conversation about these reports with a finance director compared to a business coach, but both will be valuable. It’s for you to decide the most appropriate next step that will provide a holistic approach to help you grow your business.
Topics from this blog: Finance, Forecasting
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