Managing your company finances better

The E-Myth blog recently featured an article explaining the various roles within a company’s finance department and the essential steps that you as a business owner must take to manage your finances.

By the way, if you think this doesn’t apply to you because your business is small and doesn’t have a finance department, please read on. Remember that E-Myth principles always apply to even the smallest business.

The blog sets out the four main roles (not necessarily different people, but distinct functions), with translation from the American terms where necessary!:

- CFO (Finance director) – who advises the CEO on trends that may impact the business, supports you in analysing financial reports and helps to establish and monitor the systems used by your accounting department.

- (Financial) Controller – who oversees the personnel in your accounting department, prepares reports, and makes recommendations to improve the financial outlook of the company.

- Bookkeeper – who is the technician on your team, handling the day-to-day tasks of organising and inputting data.

- Qualified accountant (CPA) - whose main role is to advise you on tax-related matters.

The blog then talks about the essential steps that you as a business owner must take to manage your finances. Here’s a summary:

1. Be open and curious about how your financials and your business activities are connected.

2. Have a financial team around you that provides support, direction and recommendations.

3. Regularly review and analyse your income statements and balance sheets.

4. Establish a budget and a system for using it.

5. Set up a way to track and manage your cash and make it a routine.

6. Use accounting software.

Full the full story, see the E-Myth blog.

Please let me know if you need help setting up systems to allow you to put all this in place, or post a comment with your thoughts.