According to SunTrust Business Owner Research, most small business owners agree that budgeting expenses and monitoring cash are effective ways to improve cash flow. Yet, two-thirds are not tracking and budgeting expenses tightly enough and most do not track the profitability of their products, customers and markets.
It can be difficult and time consuming to gather all the numbers necessary to manage cash flow and profitability. The information needed is often in multiple places throughout an organization, and most owners don’t have the time or systems available to easily reconcile the information and generate the reports needed for effective tracking.
However, advancements in financial services software and online technology are creating significant opportunities for profit-minded business owners who want to take a more proactive role through delegation.
By working closely with your financial partners, including CPAs and accountants, you can implement financial systems to better control cash flow, budgets and profitability. By linking internal financial operations with smarter electronic systems, you can better protect business assets against fraud and crime, while delegating many of the day-to-day operations.
Business owners see four ways in which CPAs can “operate” more like virtual CFOs:
The adoption of integrated, electronic software and online banking services are key elements in making the transition to a virtual CFO. For example:
The following activities are practical actions you and your financial partners can implement to better control your cash flow, budgets and profitability with less time and effort:
1. Track payables and receivables electronically with an online-banking solution.
2. Grant your accountant limited, tiered access to your online banking solution.
3. Online Payroll allows you to export your payroll expense information directly into a spreadsheet or QuickBooks®, which makes it easier for your accountant or bookkeeper to generate reports that help you track, manage and allocate your labor costs by project, customer or product.
4. Have your accountant compile a monthly flash report to track key indicators of financial health, including sales, profitability, performance against budget and cash flow.
5. Have your accountant analyze the sources of profits and positive cash flow.
1 Federal Reserve Study, December 2010
About SunTrust Business Owner Research: SunTrust surveys small business owners and advisors as part of its ongoing business seminars and symposiums. The small business owners attending these events include both SunTrust client and non-client business owners and are representative of the broad spectrum of businesses located in the SunTrust markets. The research cited in this report is extracted from these 5,425 small business owner surveys collected between 2007 and 2011.
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