As a new business owner, wanting to start a consultancy you are probably raring to go. Excited to get your new venture off the ground, and not thinking much about financial management.
Financial management is one area of business where you simply cannot afford to fly by the seat of your pants. If you don’t stay on top of this, you can end up in very big trouble with tax authorities and other role players, so make sure you have it all wrapped up.
There are a few key people who will be involved in your consulting business’s financial management, and we have outlined these people, and there roles, below.
Certified professional accountants (CPA)
CPA’s are required by every business, to take care of legal requirements in terms of finance, earnings, and possibly most importantly, taxes!
If you hire no other staff, and take on no other independent service providers, make sure that you hire a CPA. This is the person that will make sure your business stays legally compliant, and you cannot afford to skimp on that!
The benefit of a CPA is that, if you maintain a good working relationship, they will be able to advice on all aspects of finance, from management to applications for funding, as well as keeping your nose clean on the tax front!
So spend some time choosing a CPA with a good reputation, and who you believe you can forge a symbiotic working relationship – you will be very glad you did!
Internal finance person
Another person who you may employ, if not at first, then certainly later, is an internal financial person, whose function it will be to deal with and manage the day to day financial operations, from invoicing to paying suppliers and service providers.
Aside from their day-to-day functions, and the generating of reports, your internal finance person, or team, is responsible for preparing all documentation and information that the CPA requires to complete his function.
At first, when you are just starting out, you may have to fulfill this function yourself, but speak to your CPA, and find out what the best, most efficient and simplest way to do this is.
Your own Staff
If you have staff, you will need to make them aware of their role in the financial well being of the firm. Every action and inaction of your staff shows up somewhere in your finances, whether it be as an expense, or, should a staff member fail to process invoices timeously for example, as a late payment.
Making staff aware of company policies and requirements when it comes to payments is critical to ensure that your financial health as a company stays on track!
You, the owner
As a business owner, you have the responsibility of managing your company’s financial path and future. It falls to you to make sure that everyone in the chain does their part, and ultimately, it is your responsibility to keep your finger on your consulting business’s financial pulse.
No matter how busy you are, you need to make time to get involved, to review reports, solve problems and discuss issues with your staff and CPA.
Managing a company’s finances is a big responsibility, and although you will have people to assist, you need to step up to the plate!