Top Ways Your Accounting Team Can Reduce Your Pain

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You love your business. 

But sometimes the accounting side of things can feel like a never-ending game of Whac-A-Mole. 

And some days, you’re not the one doing the whacking, you’re the mole getting hit over the head. 

Ouch.

We feel your pain.

Or, we used to. 

And that’s why we love our work here at New Economy. 

We love helping our clients reduce their financial pains so they can focus on greener pastures, hopefully not nearly as mole-infested. 

accounting team

Your accounting team has a tough job, but the end goal is to reduce your pain, not make more of it. So, let’s share some ways your accounting team is (hopefully) working to make your life better right now. 

1. The Pain of Inefficiency and Wasted Time

There’s a reason for computers and AI, and it’s not to steal our jobs. 

It’s to take on the work that would be otherwise boring, repetitive, or inefficient for a human to spend their brain power and time focusing on. 

Embracing efficiency can help keep your business going strong. 

The software exists for most of these tasks, from bank reconciliations to expense tracking. It just needs to be well-implemented. 

Your accounting team can help you out with the following:

  • Automate Repetitive Tasks: From invoicing to expense tracking, automation tools can handle the mundane so your team can focus on more exciting stuff. Less grunt work, more strategic thinking!
  • Optimize Workflows: Implementing streamlined processes reduces the time spent on repetitive tasks, freeing up resources for more important activities.
  • Improved Morale: Have you ever worked at an inefficient place that was constantly putting out fires? Compare it to somewhere that knew what was going on, had processes in place, and treated you like the intelligent person you are. Letting your employees plug into the processes, and then freeing up their minds to find innovative solutions is a great way your accounting team can help. 

2. The Pain of Accounting Errors 

We all make mistakes, it’s part of being human.

But how many times have your finances been thrown off by a tiny bookkeeping or accounting error? 

Whether it was you or someone on the accounting team, someone spent hours, maybe even days, combing through the transactions and calculations to figure out what went wrong. 

It’s a much better learning process to make interesting mistakes – like rethinking your marketing or investment strategies – compared to dealing with manual data entry errors. 

And unfortunately, financial errors are more than just a headache—they can be expensive. 

Here’s how your accounting team can help you avoid these pitfalls:

  • Implement Checks and Balances: Regular reviews and reconciliations catch errors before they become expensive problems. 
  • Use Error-Prevention Tools: Some accounting software can identify potential errors before they impact your bottom line, or eliminate them by the automation we spoke about earlier. 
  • Invest in Training: Ensure your team is well-trained to handle – and prevent – financial task errors. 

3. The Pain of Taxes

We love the benefits taxes bring to our society, but we don’t love overpaying more than our fair share. 

By optimizing your tax strategy, accountants help ensure you’re paying what you owe—nothing more, nothing less. 

  • Strategic Tax Planning: Planning your tax strategy throughout the year avoids last-minute scramble and headaches. We know they’re coming – there’s no need to add extra stress just because it’s tax time!
  • Stay Compliant: Avoid penalties by ensuring you meet all your tax obligations correctly and on time.
  • Leverage Deductions and Credits: Your accountant can spot deductions and credits you might miss, ensuring you get the maximum benefit.

4. The Pain of Audits

Whether it’s an internal audit to ensure everything is in good shape or a visit from the IRS, audits strike fear into the hearts of business people around the world. 

But they don’t have to be nightmares. 

Your accounting team can simplify the process to make audits smoother and less stressful, with steps such as these: 

  • Organize Documentation: Keeping your records neat and accessible to make the audit process a breeze. 
  • Prepare in Advance: Regularly reviewing and preparing your documents so you’re not caught off guard during an audit. 
  • Working Collaboratively: While your accounting team can handle the heavy lifting of audits, the sooner you can get info to them, the easier the jobs will be for everyone. While you don’t need to be an accountant, feel free to ask questions and learn the basics, because at the end of the day, you need to understand what’s going on financially in your business. 

5. The Pain of Overwhelm and Second Guessing Your Strategy 

It’s easy to be overwhelmed with the decisions you make for your business. Adding a bunch of numbers and financial reports on top of that may make things even worse if you’re not someone who feels comfortable with the financial side of running a business. 

No one makes perfect decisions, but if you’re confident your numbers are accurate, and you have the correct reports, you can ask the right questions and make solid decisions. 

A skilled finance and accounting team can offer expert advice and enhance financial reporting to ensure you’re not flying solo. 

With their support, you’ll make informed decisions and feel more confident in your financial strategy. 

They can help you by:

  • Clarifying Financial Reports: Make sense of your financial statements with expert advice that turns complex data into understandable insights. 
  • Providing Strategic Insights: Receive guidance on making strategic decisions that align with your business goals, including tools such as business scorecards. 
  • Putting Together a Scorecard: Your business scorecard can be an invaluable tool.
  • Supporting Big Decisions: Whether it’s expansion or cost-cutting, your accountant can provide insights and expert perspectives on the financial side to ease the process. 
  • Preparing for Funding Opportunities: Whether it’s investments or bank loans. 

3 Key Takeaways

At New Economy, we help you use financials to make more money and better business decisions so you’ll feel less pain when running your business. Those poor moles need a break as much as you do! 

  1. Streamline Your Processes (and Minimize Errors). Get rid of those repetitive tasks and reduce financial slip-ups by automating processes and leveraging efficient tools. A well-oiled accounting machine means fewer mistakes and more time to focus on what truly matters.
  2. Simplify Audits and Tax Strategies. By keeping your records organized and planning your taxes smartly, you’ll make these daunting tasks much more manageable. Let your accounting team take the stress out of compliance and optimization.
  3. Feel More Confident in Your Decisions. With clear financial reports and expert advice, you’ll be equipped to make informed decisions without second-guessing. Confidence in your financial strategy means less stress and more focus on growing your business.

There you have it 🙂

accounting team

New Economy Team Members are Experts in Accounting for Entrepreneurs

If identifying ways to decrease your taxes is not in your skill set or you want to gain control of your finances to make smart decisions to build and grow your business, New Economy is an excellent partner. 

We’ll help you get your accounting and taxes done, and done right.

Schedule a time to meet with our Founder, Jeff, and discuss how we can help your business survive and thrive each year!

Business's financial health

Top 5 Questions to Ask Relating to Your Business’s Financial Health

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It’s always good to approach your business with curiosity.

What’s driving you?

How’s your team doing?

What could be going better? 

But sometimes we don’t ask the right questions about our finances, because it can feel a bit intimidating. Who knows what we’ll uncover? 

There’s no need to be worried. Knowledge is power, and we’re here to make you more powerful than ever before. 

We’ve put together five key questions that will help keep your business on track and grow to new heights. 

Business's Financial Health

Leading with Curiosity 

There’s a reason the wisdom of Socrates carries on today. He’s famous for asking questions. It’s a method that can help you reach useful insights.

A toga is not required, but certainly, a fun addition if you want to really get into it! 😉

Anyways.

Consider employing the “5 Whys” Method, which is popular among lean startups.

Whenever you think you have an answer to the below questions, try asking “Why?” again and again. You may discover some interesting root causes, causality, and insights.

Always pursue this approach without judgment. Even if it’s tempting to do so, the goal is insights and not blame. 

5 Whys Example

The “why” to many of these could have many answers taking you in different directions to explore, but here’s a simple example with one answer and follow-up question for each. 

  • Why aren’t we profitable yet?

Our revenues aren’t exceeding our expenses.

  • Why aren’t our revenues exceeding our expenses?

Our expenses are reasonable, so it must be that we need to work on our revenue model. 

  • Why isn’t our revenue model working? 

We’re not sure, perhaps there’s some more research that needs to be done here. However, it’s based on assumptions from two years ago when we started, and we’ve learned a lot since then which could be updated. 

  • Why haven’t we updated our revenue model?

We get caught up in the hustle and bustle of daily business.

  • Why are we too caught up in the hustle and bustle of daily business?

We haven’t created a process that includes scheduled time and accountability for strategic thinking and updates. 

Okay, here are some good questions to get the curiosity going! 

Question 1: How’s My Cash Flow?

Cash flow is the lifeblood that keeps everything running smoothly. 

Unlike profit, which is a measure of your earnings over time, cash flow is the actual money flowing in and out of your business right now. If you’re not paying close attention to your cash flow, you could be headed for trouble, even if your business is profitable on paper.

Signs that your cash flow might be struggling include:

  • Late payments from customers
  • Overstocked inventory
  • Unexpected expenses

To keep your cash flow healthy, make sure you’re invoicing promptly, negotiating favorable payment terms with suppliers, and keeping a close eye on your expenses.

Question 2: Am I Profitable? (And If Not, Why?)

This seems like common sense, but it’s key. 

While cash flow is essential for short-term survival, profitability is the key to long-term sustainability. It’s the difference between making money and just breaking even. 

To figure out if you’re profitable, take a close look at your revenue and your expenses.

  • Are you pricing your products or services correctly?
  • Are your costs under control?
  • Is your sales volume high enough? 

Answering these questions and keeping an eye on your budget can help you pinpoint areas where you can improve your profitability.

Question 3: How’s My Debt Situation?

Not all debt is created equal. Some debt, like a loan used to purchase equipment or expand your business, can be a good thing. In fact, we recently wrote an article which will help you get a bank loan for your business. 

However, too much debt can weigh your business down with interest payments and limit your cash flow. 

If you’re carrying a lot of debt, consider strategies like consolidation or refinancing to reduce your interest rates and monthly payments.

Question 4: Am I Saving Enough?

Even if your business is doing well right now, it’s important to prepare for the unexpected. A rainy day fund can help you weather tough times, like a sudden economic downturn or an unexpected expense. 

It can also give you the flexibility to take advantage of new opportunities, like expanding your business or investing in new technology.

Make sure you’re setting aside a portion of your profits each month to build up your savings.

Question 5: What Does My Future Look Like?

Having a clear vision for your business’s future is essential for making smart decisions today. Financial forecasting can help you anticipate potential challenges and opportunities down the road. 

By using tools like financial modeling software or seeking the help of a professional advisor, you can develop a roadmap for your business’s financial future. 

This can help you make informed decisions about everything from hiring new employees to expanding into new markets.

3 Key Takeaways:

At New Economy, we’re always asking questions and coming up with helpful solutions. We want to help you flourish by taking control of your finances. Here are 3 key takeaways:

  1. Stay Curious: Instead of making assumptions and judgements, keep an open mind and question the world around you.
  2. Keep Asking Why: Go deeper and deeper to see if you can find and solve root causes.
  3. Plan Ahead: Use questions and forecasting to make informed decisions about your business’s future.

Remember, asking the right questions is the first step to taking control of your business’s financial health. 

Don’t be afraid to seek help from a financial professional if you need it. By staying informed and proactive, you can set your business up for long-term success.

Business's Financial Health

New Economy Team Members are Experts in Accounting for Entrepreneurs

If you need help asking the right questions, getting your finances organized, and decreasing your taxes, New Economy is an excellent partner. 

We’ll help you get your accounting and taxes done, and done right.

Schedule a time to meet with our Founder, Jeff, and discuss how we can add value to your situation.

business scorecard

How to Create and Use a Business Scorecard

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Ever feel like you’re running your business on crossed fingers and gut instinct alone? 

Do you feel like you’re flying blind?

Wish you had a clearer picture of where you’re headed?

We get you. 

That’s where many of our clients are when they first approach us. 

Don’t worry. Get ready to ditch the guesswork and embrace a powerful tool that we’ve seen transform business: the scorecard.

Business Scorecard

But this isn’t 8th grade…why do grown adults, savvy entrepreneurs like us need scorecards? 

  • Everyone needs numbers to ground them and set goals in an organization. Scorecards give clear and concise direction to all team members. 
  • Scorecards let us focus on future indicators instead of lagging ones that are barely relevant. 
  • Speaking of the future, scorecards help us see helpful patterns and trends.
  • Scorecards can be concise and visual, which helps us process complex concepts quickly and more easily. 

And lastly…we need to stop managing businesses on assumptions. Letting our emotions lead the way instead of checking what the numbers are telling us typically isn’t the best solution. 

We saw this ourselves at New Economy. We experienced incredible growth, including our top line increasing by 40% once we began implementing a scorecard across our business. 

But we’d never leave you hanging. 

Let’s explore how you can create and use a scorecard to skyrocket your business success.

Steps to Create a Scorecard

There are many ways to create and use a business scorecard, but here’s what we’ve found works:

  1. Meet with Leadership: Gather your leadership team and brainstorm 10-15 key performance indicators (KPIs) that will help you manage the business effectively. These numbers should be relevant to your specific goals and industry.
    • DON’T fall into the trap of too many KPIs on your scorecard, it will only lead to overwhelm. 
  2. Assign Accountability: Make someone responsible for driving each KPI. This prevents anything important from falling to the wayside. 
    •  If a number is off track, that person owns it and is responsible for taking corrective action. 
  3. Set Goals: Establish clear, measurable goals for each KPI. This provides a benchmark for success and helps you track progress.
    • Remember the classic SMART goals formula – specific, measurable, achievable, realistic, and timely.  
  4. Measure Regularly: Track your KPIs on a weekly, monthly, quarterly, and annual basis. This allows you to identify trends and address issues promptly.
    • DON’T wait until the end of the year to measure and try to fix issues. 
  5. Root Cause Analysis: If a KPI is off track, dig deep to understand the root cause of the problem. This will enable you to develop effective solutions and prevent similar issues in the future, keeping your business in the green.
    • Make sure that it isn’t a witch hunt or blame game situation. While everyone is responsible for their number on the scorecard, it’s about finding the root cause and solutions together, with a curious and compassionate problem-solving approach. 

Everyone in the Business Needs a Number

You get a number. And you get a number. And YOU get a number!

It’s not just Oprah who can hand out the good stuff. 

Providing everyone with a clear number, which is their responsibility, can inspire confidence, motivation, and encourage everyone to work together collaboratively.  

You may be reluctant, thinking not everyone on the team needs one. But here’s why we encourage this approach: 

  1. Clarity: Numbers cut through murkiness and provide a clear picture of performance. They eliminate ambiguity and ensure everyone is on the same page.
  2. Accountability: Assigning numbers creates accountability. Each person knows what they are responsible for and is motivated to achieve their targets.
  3. Appreciation: Accountable people appreciate numbers. They provide a sense of ownership and a way to measure their contribution to the company’s success.
  4. Commitment: Numbers create clarity and commitment. When everyone knows what is expected of them, they are more likely to commit to achieving those goals.
  5. Competition: Numbers foster healthy competition. Employees are motivated to outperform their peers and strive for excellence.
  6. Results: Numbers produce results. By focusing on measurable goals, employees are more likely to achieve tangible outcomes.
  7. Teamwork: Numbers promote teamwork. When everyone is working towards a common goal, they are more likely to collaborate and support each other.
  8. Problem-Solving: Numbers help you solve problems faster. By identifying issues early on, you can take action before they become major obstacles.

However, it’s important to ensure you’ve built a strong company culture. You don’t want employees to prioritize numbers over the overall best interests of the organization, people, and society in general. A strong company culture, with values-based leadership, will help ensure that the assignment of a number will not get in the way of common sense and collaboration. 

3 Rules of Thumb for the Scorecard

Here are some more things we’ve learned in successfully implementing scorecards at New Economy and with our clients. 

  1. Leading Indicators: Use activity-based numbers that are leading indicators. For example, track leads generated instead of revenue, as leads are a predictor of future revenue.
  2. Proactive Tool: Use the scorecard as a proactive tool to make changes in your business. Don’t wait for problems to arise; use the data to identify potential issues and take action before they escalate.
  3. Prioritize Red Flags: Flag off-track items as red and give them the attention they need. Addressing problems promptly can prevent them from becoming major setbacks. Literally using the color red can visually signal a sense of importance and urgency when looking at a scorecard. 

3 Key Takeaways

At New Economy, we help companies harness their data to do a world of good for their business. I hope you’re starting to see why the clarity of a scorecard can be so helpful.

Scorecards can help you soar, instead of wildly flapping around and hoping something works. 

Here are my 3 key takeaways.

  1. Embrace the power of data: A scorecard is your compass, guiding you towards informed decisions and sustainable growth.
  2. Empower your team with numbers: Give everyone a metric to own and watch their engagement and performance take off.
  3. Make your scorecard a habit: Regularly review and refine your metrics to ensure they’re aligned with your evolving goals and challenges.

There you have it 🙂

Business Scorecard

New Economy Team Members are Experts in Accounting for Entrepreneurs

If identifying the best KPIs for a scorecard is not in your skill set, or you want to gain control of your finances to make smart decisions to build and grow your business, New Economy is an excellent partner. 

We’ll help you get your accounting and taxes done, and done right.

Schedule a time to meet with our Founder, Jeff, and discuss how we can add value to your situation.

Bank Loan

3 Keys to Getting a Bank Loan for Your Business to Keep Growing

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Got a vision for business growth that’s bigger than your wallet?

It might be time to make friends with the bank. 

Or, at least, become much better acquainted! 

Today, we’re breaking down key tips for getting your business funded with a bank loan.

Put on your dress shirt, shine your shoes, and let’s build a funding relationship with your bank. 

Bank Loan

At New Economy, we’ve helped our clients raise over $75 million in capital. 

For many of our clients, raising capital wasn’t about pitching to fancy VCs (venture capitalists). 

It was landing a tried-and-true, humble bank loan. 

We’ve found these three keys to securing a loan to grow your business: 

  1. Organized, Persuasive Financials
  2. A Strategic Business Plan
  3. Knowledge of Your Credit History 

Let’s turn those dreams into dollars! 

Key 1: Money Talks, But Financials Shout 

Don’t let the word “financials” scare you. 

It’s your business’s story, but with numbers instead of words. 

Here’s what lenders are really looking for:

  • Healthy Business, Not Lottery Ticket: Show them you’re not a one-hit-wonder, but a sustainable, profitable venture who is prepared for the long haul.
  • Financials Are Your Resume: Your Profit & Loss statement, Budget, and Balance Sheet are your business’s resume. Make sure they are clean and up-to-date.
  • Cash Flow is King (or Queen) (or President): Make sure you can demonstrate strong cash flow. Check out our free cash flow projection tool which can help. 

Pro Tip: Organize your records like your business depends on it. Because in many cases, it does!  

Key 2: The Business Plan: Your Dating Profile!

Think of your business plan as a first date with the bank. 

You need to woo them with your vision, strategy, relationship experience, confidence, and potential. 

  • Your Love Letter: Tell them what your business is all about, why you’re so passionate about it, where it’s headed, and why they should invest in your love story.
  • Show Off Your Smarts: Market analysis, competitor research – prove you’ve done your homework and know your stuff.
  • Financial Projections: Show them the money – the money you’re going to make them with your brilliant business.

Pro Tip: Be ambitious, but realistic. Lenders love a visionary who’s also got their feet on the ground.

Key 3: Credit History: The Ghosts of Your Financial Past 

Your credit history shows highlights (and lowlights) of your past money adventures.  

A history of bad credit doesn’t necessarily exclude you from a loan, but you need to demonstrate you’ve since taken responsible action to set things right. 

Work towards paying off any debts and building back up your credit score, otherwise, they’ll come back to haunt you. 

Some banks will have strict criteria for what they’ll allow historically for someone to be eligible for a loan, but others are flexible, especially if you’re able to win them over with your current financials and business plan. 

Remember that both your personal and business credit histories will be considered when applying for most bank loans. 

Pro Tip: Check your credit report before you apply for a loan. It’s better to face any financial ghosts now than have them surprise you later.

Reminder: Shopping Around is Okay!

You don’t need to limit yourself to your current bank. It can take a bit more effort to find a new place for a loan, but each has its advantages. 

Pros of Getting Loans from Your Current Financial Institution 

  • If you already have a good working relationship, it may be easier for you to manage communication channels, and know what to expect.
  • Your “home” bank may have discounts for long-standing clients.
  • It can be a real sanity saver to have all your finances in the same place. 

Pros of Shopping Around

  • You might find some favorable rates and terms for new banks looking to woo you. 
  • Some banks will be more flexible in terms of offering loans if your credit isn’t stellar. 
  • You may find a new bank with incredible customer service, and decide to switch all your banking over at some point (that may be part of their “evil” plan, after all!).
  • Some online lenders are extremely convenient and price-effective (but do your homework to ensure you’re not being scammed).

Bank Loan

3 Key Takeaways

At New Economy, we want to help you flourish by taking control of your finances and getting the financing you need. Here are 3 key takeaways:

    1. Make sure your financials and business plan are organized and showing your growth and potential. 
    2. Become familiar with your credit history so you don’t scare your lenders. 
    3. Shop around and don’t forget about credit unions! You may find some more favorable rates and terms.

There you have it 🙂

New Economy Team Members are Experts in Accounting for Entrepreneurs

If you need help getting your finances organized, decreasing your taxes, and getting ready for a loan, New Economy is an excellent partner. 

We’ll help you get your accounting and taxes done, and done right.

Schedule a time to meet with our Founder, Jeff, and discuss how we can add value to your situation.

Businesses Fail

Top Reasons Why Most Businesses Fail After 10 Years and How to Avoid It

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Built a business you’re proud of?  Now the real challenge begins.

It’s no secret that businesses fail.

In fact, the majority fail within the first 10 years. 

A thrilling entrepreneurial dream can turn into a nightmare if not managed well.

But it’s not inevitable. 

Let’s equip ourselves with insights to prevent this from becoming your reality. 

Businesses Fail

So, what are the chances a business will fail?

According to the Bureau of Labor Statistics: 

  • 20% of businesses fail within the first year
  • 45% within five years
  • 65% within the first 10 years

One of the interesting things is that these statistics remained fairly consistent for the past few decades. That means there’s a lot we can learn from the past years. 

Here are the top reasons why businesses fail:

  • Finances – Especially Cash Flow
  • Financing Challenges
  • Minimal Operational Efficiency 
  • Not Focusing on The Customer and Evolving Marketing Trends
  • Lack of Effective Business Vision, Strategy and Execution

Finances – Especially Cash Flow

According to SCORE, a whopping 82% of small business failures can be traced back to cash flow issues.

That doesn’t mean the business isn’t profitable. But without the cash to pay employees and vendors, the business isn’t going to last long. 

While profits are important, they can be a lagging indicator. Cash flow, on the other hand, is a real-time reflection of your financial health.  

Don’t get caught up in the illusion of profitability on paper – focus on managing your cash flow effectively.  

There are many reasons for cash flow problems

  • Poor budgeting and forecasting 
  • Slow collections from clients
  • Unexpected expenses and emergencies
  • Inventory mismanagement
  • Expanding quickly without a cash flow management plan

While we can’t solve every cash flow problem in one day, we do have a ton of articles about cash flow because it is such an important topic, including:

Here are some key strategies to keep your cash flow healthy:

  • Embrace the “lean and mean” startup mentality: Especially in the early years, avoid major expenses and prioritize a conservative approach. This doesn’t mean stifling growth; it means being strategic with your resources.
  • Develop a budget and stick to it: A well-crafted budget is your roadmap to financial health. Track your income and expenses meticulously, and identify areas where you can optimize spending.
  • Inventory management is crucial: Implement a system to track inventory levels, forecast demand, and avoid overstocking. This prevents unnecessary costs and ensures you have the right products available to meet customer needs.
  • Consider partnering with an accounting service: A qualified accounting service that fits your vibe can be a valuable asset, especially in the initial years. They can help you set up strong accounting practices, optimize your accounts receivable/payable systems, and ensure you’re on top of your tax obligations.

Other financial threats

Now that cash flow is covered, here is a bit more you’ll want to keep an eye out for in your finances: 

  • Inconsistent Budgeting and Record-Keeping:  Without a solid budget and meticulous tracking of income and expenses, it’s difficult to identify areas for improvement or predict potential cash flow challenges.
  • Tax Neglect: Taxes are a fact of life. Neglecting your tax obligations can lead to hefty penalties and interest charges.
  • Limited Financial Network: Not building strong relationships with lenders and financial advisors can leave you with limited options when challenges arise. These professionals can provide valuable guidance, access to financing, and help you navigate complex financial situations. Take the time to foster these relationships as soon as possible – you’ll be better equipped to weather financial storms and seize growth opportunities.

Financing Challenges

While cash flow management is crucial, it all starts with having enough financial resources in the first place. 

“Of course!” you say. 

Doesn’t everybody wish they had a blank check from a wealthy, ethical, no-strings-attached funder? 

Well sure, and we’d be happy if you’d give them our number!

But the reality is, many businesses with millions in funding still don’t succeed. A blank check isn’t the answer to everything. 

Unrealistic Funding Expectations

Launching a business requires investment. 

Whether it’s personal savings, loans, or venture capital, not having enough capital to cover initial expenses and operational costs can hinder your ability to gain traction and establish a strong foundation. Entrepreneurs are often brimming with optimism, but it’s important to have realistic expectations about how much funding you’ll need to get your business off the ground. Underestimating your financial requirements can lead to a funding gap that limits your progress.

For example, if you’re thinking of launching a business that will require significant marketing efforts to succeed, it may be better to wait until you’ve secured enough funding for marketing before taking the leap.

The “lean” method can only take you so far, and it varies wildly based on industry and situation.

Poor Financial Planning

Beyond simply securing funding, a well-defined financial plan is essential. This plan should outline your funding needs, potential revenue streams, and strategies for managing your cash flow. 

By carefully considering your funding needs, developing a sound financial plan, and securing adequate resources, you can set your business up for long-term success…with or without that magical blank check!  

Operational Efficiency: Streamlining Your Path to Success

Operational efficiency is all about optimizing your processes to achieve maximum results with minimal wasted resources. Here’s how inefficient operations can impact your business:

  • Wasted Time and Resources: Inefficient processes can lead to wasted time spent on repetitive tasks, unnecessary rework, and underutilized resources. This not only frustrates employees but also translates to lost productivity and higher costs.
  • Inconsistent Quality: Inefficiencies can lead to inconsistencies in product quality or service delivery. This can damage your reputation and customer satisfaction.
  • Hindered Growth: As your business grows, inefficient processes become bottlenecks, hindering your ability to scale effectively. Streamlining your operations allows you to handle increased demand and grab those growth opportunities.

Here are some ways to improve your operational efficiency:

  • Embrace Technology: Automation and digital tools can free up your team’s time for more strategic tasks. Invest in software solutions that automate repetitive tasks, streamline workflows, and improve data analysis.
  • Standardize Processes: Develop clear and consistent procedures for various tasks within your business. This ensures everyone is on the same page, reduces errors, and improves overall efficiency.
  • Regularly Analyze and Improve: Don’t settle for the status quo. Regularly evaluate your processes, identify areas for improvement, and implement changes to optimize your operations.
  • Foster a Culture of Efficiency: Encourage your team to identify inefficiencies and suggest improvements. By empowering your employees and fostering a culture of continuous improvement, you can create a more efficient and adaptable business.

By prioritizing operational efficiency, you can free up valuable resources, improve your bottom line, and position your business for sustainable growth. 

Remember, efficiency doesn’t mean cutting corners; it’s about working smarter, not harder.

Focusing on The Customer and Evolving Marketing Trends

“Over 40% of small businesses fail because there’s an insufficient need for their product or service.” – US Chamber of Commerce 

The business landscape is dynamic, constantly evolving with new technologies, consumer preferences, and economic shifts. 

Business owners need to stay on top of this – just think of how much happened in our world in the last 10 years! 

Many businesses lose touch with their audience, assuming their needs are the same as when they first started out. 

Others fail to keep their fingers on the pulse of evolving markets, missing out on perfect pivot opportunities and untapped market segments. 

Don’t let this be your story!

How to stay relevant and thrive in an evolving marketplace

  • Embrace Customer Centricity: Put your customers at the heart of everything you do. Gather customer feedback, analyze buying patterns, and adapt your offerings accordingly.
  • Foster a Culture of Innovation: Encourage a culture of creativity and experimentation within your organization. Invest in research and development, explore new technologies, and actively seek ways to improve your products and services to better meet your customers’ needs.
  • Stay Agile and Adaptable: Be prepared to change your strategies and business model as necessary.

Business Vision, Strategy, and Execution

A business without a clear vision and well-defined plan can flounder. And even with that, the Founder of EOS Gino Wickman states “Vision without execution is just a hallucination”.

Without a clear strategy, it’s hard to create and measure goals. 

Employees might be unsure of their goals and priorities beyond the day-to-day tasks, resulting in frustration, stress, and wasted effort. 

And of course, businesses get stuck in reactive decision-making, instead of being able to anticipate what’s needed for their success. 

How to Build a Roadmap for Success

  • Develop a Clear Vision: Clearly articulate your company’s long-term goals and aspirations. What impact do you want to make? What problem are you solving or what need are you fulfilling? A clear vision inspires your team, attracts talent, and guides your strategic direction.
  • Don’t Throw Out the Business Plan: Business plans aren’t just for the first days of business and getting funding – revisit your plan and adjust it based on what you’re learning. 
  • Embrace Forecasting: Don’t just use your budget as a guide, transform it into a forecast. Some of our customers re-forecast weekly! It’s simply part of their regular weekly process. At New Economy, we do the same. 
  • Systemize Strategic Planning: Make sure you have it in your calendar and are regularly taking the time to update your strategy as needed. 
  • Focus and measure execution: Measure your progress. Hold the team accountable for completing the top priorities in the Strategic Plan. 

Other factors

This list isn’t exhaustive. There are countless reasons why a business could fail:

  • Lack of supportive company culture
  • Founder or employee burnout 
  • Not finding and keeping the right team
  • Competitors  
  • Poor customer service

It doesn’t mean you have to be scared. 

It just means you need to take some deep breaths and put business planning into your calendar as a recurring appointment. 

3 Key Takeaways

At New Economy, we help you use financials to make more money and better business decisions so you’ll be in business as long as you want.

Here are 3 key takeaways:

  1. Master Your Cash Flow: Don’t be fooled by profitability on paper. Focus on strategies like budgeting, inventory management, and building strong relationships with lenders and financial advisors to maintain a healthy cash flow.
  2. Embrace Change and Agility: The business landscape is constantly evolving. Stay on top of customer trends, adapt your marketing strategies, and be prepared to pivot your business model as needed. A culture of innovation and customer-centricity is key to staying relevant.
  3. Plan for Success: Develop a clear vision, create a comprehensive business plan, and revisit and revise your strategy regularly. This roadmap will keep your team aligned, focused, and prepared for future challenges.

There you have it 🙂

Businesses Fail

New Economy Team Members are Experts in Accounting for Entrepreneurs

If identifying ways to decrease your taxes is not in your skill set or you want to gain control of your finances to make smart decisions to build and grow your business, New Economy is an excellent partner. 

We’ll help you get your accounting and taxes done, and done right.

Schedule a time to meet with our Founder, Jeff, and discuss how we can help your business survive and thrive each year!

financials

3 Ways to Use Your Financials to Make More Money

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You’ve got a good feeling about a new idea, but is it the right investment? 

Where can you tighten the belt without sacrificing quality? 

Sales are steady, but you know your business can do more. 

These types of scenarios keep many entrepreneurs up at night, but the answers are within your grasp. 

Your financial data is a treasure trove of insights, just waiting to be used to make more money. 

Ahoy, mateys! 

In this article, we’ll explore three strategies to transform your finances into some well-deserved bounty for your business.

  • Strategy 1: Uncover Untapped Revenue Opportunities
  • Strategy 2: Turn Forecasts Into Cash Flow
  • Strategy 3: Reduce Waste and Streamline Operations

Let’s dive in! 

financials

Strategy 1: Uncover Untapped Revenue Opportunities

Your financials are a compass for your business, guiding you toward untapped profits. They can reveal hidden gems within your existing operations.

Even small tweaks can result in significant gains. Here are some examples where financials can become your trusty first mate in finding hidden riches:

Shine a light on underperforming products

Sales data can expose product or service lines quietly dragging down your overall profitability. 

Is a specific offering consistently failing to meet sales targets? 

Maybe it’s time to re-evaluate its pricing strategy or consider phasing it out to focus on more promising ventures.

Optimize your pricing

Financial data can help you understand customer behavior and price sensitivity. 

Are you leaving money on the table by undervaluing your products? 

Or are you potentially driving your target customers away with higher prices? 

Your financial data can help reveal the sweet spot – the price point that maximizes both sales volume and profit margins.

Negotiate like a pro

Financial data empowers you to become a stronger negotiator with vendors and suppliers. 

By understanding your cost structure and past purchase history, you can confidently negotiate better deals, squeezing unnecessary expenses and boosting your bottom line.

Strategy 2: Turn Forecasts Into Cash Flow

Using your financials to create forecasts helps you prepare for stormy seas. 

If you’re only working with a budget so far, fear not! You can easily use budgets as a base for your forecast.  

You can also learn more about creating and following a cash forecasting model in this article, where we’ve swapped the pirate analogies for Star Wars, if that’s more your speed.

But forecasting is only half the battle. You must then adjust your sails accordingly, or the effort will be wasted. 

Here are some examples:

Your forecast predicts a surge in sales during the holiday season. 

Instead of investing in a new marketing campaign right now, focus on optimizing your inventory management and staffing levels.

This will ensure you have enough supplies and crew on board to handle the influx of customers and avoid stockouts, which can leave money on the table.

Your forecast predicts a surge in demand for a specific product line.

Reallocate resources from underperforming areas to invest in marketing and production. 

This hidden gem may soon become your most profitable product line.

Your forecast predicts an economic downturn in the coming months. 

Instead of launching a new product line that requires a significant upfront investment, you can focus on tightening your budget.

Renegotiate contracts with suppliers, or offer discounts to boost sales and maintain cash flow during the rough weather.

At New Economy, we re-forecast our financials weekly! It’s a simple process that takes about 15 minutes, where all department leaders discuss and revise based on any material changes we’ve noticed. 

Strategy 3: Reduce Waste and Streamline Operations – Plugging the Leaks in Your Ship

Any captain worth their salt knows even the sturdiest ship can sink from a tiny leak. 

Inefficiencies and waste within your business can be pesky leaks, slowly draining your profits. 

But fear not, matey! 

Financials help you identify and patch those leaks before they become a major catastrophe.

Every penny saved is a penny earned, and financial data empowers you to become a swashbuckling cost-cutter. 

By analyzing your financial statements, you can pinpoint areas where expenses can be minimized or eliminated, ensuring your treasure chest remains overflowing.

  • Chart a course for lean operations: Financial data can reveal areas of unnecessary overhead costs. By analyzing expenses, you can identify potential areas for streamlining operations, such as eliminating redundant subscriptions or renegotiating service contracts.
  • Mind yer inventory! Inefficient inventory management can lead to overstocking, which ties up your valuable resources. Financials can help optimize your inventory levels, ensuring you have enough supplies on board to meet customer demand without unnecessary stockpiling.
  • Embrace the power of automation: Financial data can highlight repetitive tasks that are ripe for automation, causing a drain on your team’s time and energy. Freeing up your crew allows them to focus on higher-value activities. 

3 Key Takeaways

At New Economy, we help you use financials to make more money and better business decisions. 

Here are 3 key takeaways.

  1. Unearth Hidden Profits: Financial data is your treasure map, guiding you towards hidden opportunities within your business. By analyzing key metrics like sales data, cost structures, and customer behavior, you can identify areas for increased profitability.
  2. Chart Course with Forecasts: Financial data empowers you to create forecasts, acting as your compass in uncharted waters. These forecasts help you regularly adjust your sails for stormy seas or fairer weather.
  3. Plug the Leaks: Analyze financial statements to pinpoint areas of inefficiency and waste, like unnecessary overhead costs or bloated inventory levels. Every penny saved is a penny earned!

There you have it 🙂

financials

New Economy Team Members are Experts in Accounting for Entrepreneurs

If identifying ways to decrease your taxes is not in your skill set or you want to gain control of your finances to make smart decisions to build and grow your business, New Economy is an excellent partner. 

We’ll help you get your accounting and taxes done, and done right.

Schedule a time to meet with our Founder, Jeff, and discuss how we can keep your treasure chests overflowing! 

financial data

3 Reasons Every Business Needs Timely and Accurate Financial Data

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Your business is ready to grow. 

The team thinks you’re just one marketing campaign away from surpassing your goals this year.

But can you do it?

How much can you realistically invest in this campaign without jeopardizing other areas of your business? 

At New Economy, we use financial data to make nearly every decision. 

It’s guided us to the growth we are seeing today. 

So, it’s said with confidence and experience when we say: 

Without timely and accurate financial data, you can’t answer your business’s most pressing questions. 

Of course, intuition has its place.

But fuel your gut with delicious data to ensure your decisions have a foundation for success. 

financial data

Timely and accurate financial information is the cornerstone of smart business decisions, big or small. 

In this article, we’ll explore the reasons why every business, regardless of size or industry, needs up-to-date and reliable financial data to thrive.

Reason #1: Make informed decisions with confidence. 

Reason #2: Navigate challenges and opportunities effectively.

Reason #3: Gain a competitive edge and secure funding. 

Before we jump in, ask yourself these reflection questions:

  • Do you feel confident making strategic decisions based on your current financial information? 
  • Are you prepared to react quickly and effectively if a sudden market shift impacts your business? 
  • Have you ever missed out on a potential business opportunity because you lacked clear financial insights?
  • If you were to seek funding for your business today, are you confident your financial information accurately reflects its true potential?

Ready?

Reason 1: Make Informed Decisions with Confidence

Do you ever feel like you’re navigating your finances in the dark? 

At New Economy, we understand how a lack of direction can keep an entrepreneur up at night. 

But think of financial data as a compass – guiding your decisions and keeping you headed toward success.

With timely access to your financial information, you can:

  • Track progress towards goals by measuring how your current performance compares to your budget and identify areas exceeding or falling short of expectations.
  • Identify areas for improvement by analyzing trends in sales, expenses, and profitability.
  • Make data-driven decisions instead of relying on guesswork.

Let’s revisit the marketing campaign from the beginning of this article. 

By analyzing past marketing data, you can see which strategies brought the best return on investment (ROI). 

This allows you to allocate your budget more effectively for the upcoming campaign, maximizing your chances of success

Here are some more ways to use financial data to boost your confidence as a business owner. 

 

Reason 2: Navigate Challenges and Opportunities Proactively

We all know to expect the unexpected as entrepreneurs! 

Whether it’s a global pandemic, supply chain disruptions, or a strangely eventful pop culture event… 

there’s no crystal ball to prepare us for the future. 

But, smart businesses can still be reasonably prepared for the future with timely and accurate financial data. 

It lets you pivot at a moment’s notice.

You can mitigate potential damage or explore a new opportunity with the click of a button if you’ve got the right data on your dashboard.

Here’s how:

  • By analyzing trends and historical data, you can identify potential financial risks and develop contingency plans to mitigate their impact.
  • Having a clear picture of your current financial situation allows you to react quickly to unexpected events and adapt your strategies accordingly.
  • Timely financial data can reveal new market trends or opportunities you might otherwise miss. This allows you to capitalize on these opportunities and stay ahead of the competition.

Now, back to the marketing campaign. 

Your sales data starts showing a decline in a specific product category just before launch. 

You realize it’s showing a shift in a market trend. 

Thanks to the early warning, you can do some research to identify the causes.

Then you can adjust your campaign messaging or even pivot your marketing strategy to target a different product line that’s experiencing higher demand. 

Reason 3: Gain a Competitive Edge and Secure Funding

Financial health is a top priority for investors and creditors. 

Regardless of the type of funding you seek, your financial health will be reviewed thoroughly before getting anywhere near the purse strings. 

Timely and accurate financial data can be a key indicator of your business’s growth potential and ability to repay loans.

Here’s why:

  • Up-to-date financial statements give a clear picture of your company’s financial performance, profitability, and debt levels. This builds trust with investors.
  • Financial data can be used to create forecasts and projections for future growth. This allows you to showcase your company’s potential to generate strong returns for investors.
  • Your funders love when you can answer questions with accurate financial data that was generated recently, instead of bumbling about how they’ll need to wait a few weeks for you to get the data to answer their questions. 
  • A solid understanding of your financial position empowers you to negotiate more favorable terms with lenders and suppliers.

Beyond attracting funding, reliable financial data also helps you stay competitive:

  • Set competitive prices while maintaining healthy profit margins by analyzing your cost structure and customer behavior.
  • Identify areas where you can streamline operations and reduce unnecessary expenses. 
  • Gain a clear financial picture to make informed decisions about resource allocation, investments, business expansion, and more.

Let’s come back to our marketing campaign. 

You’ve crunched the numbers and decided you just can’t risk dipping into your business savings to launch a massive marketing campaign. 

The team decides taking out a short-term, low-interest loan could maximize your outcomes and minimize your risk. 

By demonstrating your financial stability and growth potential with accurate data, you’re in a much stronger position to secure funding for the campaign. 

When you share how you made your decision to pivot the focus of your marketing campaign based on the most recent data, your funder feels more confident you’re making decisions based on real-world data. 

3 Key Takeaways

At New Economy, we want to help you gain control of your finances to make smart decisions. 

Part of that is understanding your finances and how to drive business performance.

Here are 3 key takeaways.

  1. Make informed decisions with confidence. Timely and accurate data means you have a more complete picture of your business. 
  2. Be prepared for challenges and opportunities. Being able to see your financial records quickly means you can change direction when the time is right. 
  3. Secure funding and gain a competitive edge. Showcase your company’s financial position with ease, preparing you for investment, loans, and the ability to gain a competitive advantage. 

There you have it 🙂

financial data

New Economy Team Members are Experts in Accounting for Entrepreneurs

If collecting timely and accurate data is not in your skill set or you want to gain control of your finances to make smart decisions to build and grow your business, New Economy is an excellent partner. 

We’ll help you get your accounting done, and done right.

Schedule a time to meet with our Founder, Jeff, and discuss how we can add value to your situation.

Top Takeaways to Grow Your Business from the EOS Conference

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We run on EOS. 

EOS is the Entrepreneurs Operating System. It is a simple yet impactful operating system to run your business on.

It has helped up to 3x the business in a sustainable way.

If you want to learn more about EOS click here.

We recently attended the EOS conference in sunny San Diego.

The keynote speakers were motivating and inspiring.

The breakout sessions covered practical tips on leveraging the tools.

But the thing that really stuck out to us was the tone of the conference.

Everyone seemed to have a level of vulnerability that was so refreshing.

There were lots of top-notch leaders getting very honest with themselves and the people they were sharing their stories with.

We believe that Companies rise and fall based on leadership and management. 

So we wanted to share our top takeaways that you can apply to your business to help it grow.

In this article, you will learn about: 

  1. Top insights from the EOS conference
  2. Actionable steps you can take even if you don’t run on EOS
  3. Top 3 takeaways

Let’s dive in.

EOS

Top Insights from the EOS Conference

Even if you don’t run on EOS, the tools and insights can help you grow your business.

We are living proof that they work.

Attending the conference was like drinking from a fire hose.

We are going to blast you with a list of our insights from the speakers and then dive a bit deeper into a few that really resonated with us.

Here we go:

  1. Mastery of the right tools and critical skills is important to grow your business. So ask yourself, have I mastered “this tool” and do my results prove I have mastered this?
  2. Our greatest power lies in our ability to be fully present.
  3. Our proven process is critical to getting out of the commodity trap and helps customers and team members know what they will become.
  4. People are the number one thing to help your business grow. So ask yourself, what is the number one move I need to make each quarter?
  5. Success loves discipline.
  6. Discipline and consistency around the process will set you and your business free.
  7. Truth equals freedom. The more true you are with yourself and others, the more freedom you will experience.
  8. The more people that are vulnerable, the greater the chances of a breakthrough to happen.
  9. Constantly leverage the delegate to elevate the tool. This will help you as the CEO or leader to get to the next level.
  10. Identify and have the difficult customer or employee conversation you need to have. Then go have it.

These takeaways were golden nuggets offered up by the keynote speakers.

We are reflecting upon them and finding ways to apply them to our situations. And you can do this too.

As you can see, the tone was that of being open, honest, and having the courage to lean in to do the difficult work.

We are going to dive a little deeper into #1, #4, and #9 and tease out some actionable steps.

Actionable Steps You Can Take

As you can see we have identified 10 insights. Actually, there were more, but we are starting with these.

We believe that these learnings need to be applied in an effort to drive change which will drive success.

So we will break down our reflections on #1, #4, and #9 and provide some actionable “to-do’s” that we can all apply to our businesses.

Reflection #1 

Mastery of the right tools and critical skills is important to grow your business. So ask yourself, have I mastered “this tool” and do my results prove I have mastered this?

EOS has many tools. 

In fact, they have a toolbox that has about 20 tools that can be applied to help your business grow.

Click here to get a copy of the toolbox.

In the meantime, here are 3 of the tools:

  • The people Analyzer
  • The 3-step process documenter
  • Accountability chart

Let’s dive into the accountability chart.

The Accountability Chart (AC) is similar to your Organizational Chart.

The main difference is you are focused on listing the top 3-5 core functions the team member is accountable for in the seat they are sitting in.

 

EOS

 

Ok, so you get it.

The tool is pretty simple and straightforward.

But here is the question.

Have you mastered this tool and do your results prove that you have mastered it?

We believe a big part of success is driven by identifying the right seats and then getting the right people in those seats.

And businesses are constantly changing and growing.

Is your AC changing and growing every 90 days? 

Here are some indicators that you have probably not mastered this tool.

  • You had no changes in the AC over the past 90 days
  • You are frustrated with a team member that is not adding value
  • You are not achieving your annual goals 
  • You are not achieving your financial measurables

Many issues come down to people, it is a fact.

Your AC is a tool that will help you to identify the right seats and then the right people needed in the seats to win.

By win, we simply mean to achieve the things that you are trying to achieve.

At New Economy, we are going through an internal restructuring.

On the one hand, this is difficult. Sometimes it is easier to just keep moving as is.

However, we have realized that what worked for us in the past as it relates to people and the roles they performed to get us from $1M to $1.5M in revenue will not be the same as getting us from $1.5M to $2.5M in revenue.

And that is ok.

So mastery of this tool is an ongoing task.

Consider the following questions that may relate to actionable items for your Company:

  • Do you have an Accountability Chart or Organizational Chart? If not, your to-do is to create one.
  • If you do have one, have you updated it for the new quarter? If not, your to do is to update the seats to make sure you have the right structure in place to support your business over the next 12 months.
  • Do you have people who no longer fit in the seat they are in for whatever reason? If so, your to do is to determine if there is another seat for this team member. And to get the right people in the right seat.

This all sounds simple. 

In some ways it is but in other ways, it is not.

The tool requires mastery which entails going deep and doing the work.

This requires focus, intentionality, and often difficult decisions to be made.

And once you do this, you will start to see your business grow and produce the results you are looking to achieve.

Reflection #4 

People are the number one thing to help your business grow. 

People matter.

We believe every person has unique gifts, and strengths and loves to contribute to the mission, vision, and goals of every organization.

Your job is to find the right people and get them in the right seat. 

And this can be hard, especially with a growing business.

This should be an ongoing continuous process.

And let’s face it, with people, you encounter challenges.

Think for a moment.

Are you feeling frustrated about a team member? And to this point, you have spent a lot of time talking about that frustration and have not actually done something about it?

You are not alone. But you owe it to your Company, your customers, and your team to fix the people issue.

Why? 

People are the ones that will help you achieve your goals.

Oh, and there is a tool for this, it is called the people analyzer which you can find here.

This tool measures employees against your core values and what you are asking them to do. You are trying to determine if they are receiving a “passing grade”. 

If they are not, then you give them 30 days to fix it by placing them on a development plan. And you give them a few chances over a 90 period.

If things don’t change, you counsel them out.

So, mastery of this tool is an ongoing task.

Consider the following questions that may relate to actionable items for your Company:

  • Do you provide your people with feedback every 90 days? And do you hold them accountable for areas where improvement is needed? If not, your to-do is to start booking meetings and provide real feedback.
  • Are you making key people moves every quarter? This requires some vision in your staffing plan. If you are not considering key hires to make every 90 days, start building out a future staffing plan based on the AC tool above.
  • Are you investing in training and development for your team? Especially your leaders and managers? If not, your to-do is to create a training budget and plan to increase your team’s skills which will allow them to contribute more value into your mission and goals.

This is simple stuff, but we often get distracted and don’t focus on things that matter, like people.

Do the work.

 

Reflection #9

Constantly delegate to elevate

Want to make $250,000 per year?

Then stop doing $25 per hour work.

That should get your attention 🙂 

And we actually did a longer post on this topic here.

As we grow and build our companies, AC charts, and people up, we need to let go of things that do not require our unique ability.

We need to constantly be pushing work down.

Every 90 days, we encourage folks to delegate one thing down.

This frees you up to focus on your top priorities that will get you closer to your goals.

Consider the following questions that may relate to actionable items for your Company:

  • Are you doing work that does not bring you joy or is not in your sweet spot? If so, your to do is to delegate this work to someone else.
  • Do you understand the things that only you can do based on your gifts? If not, your to-do is to reflect upon that. If so, your to do is to do a self-evaluation to make sure you are spending your time in that area.

These are some powerful insights, they are golden nuggets.

We have found that when we take this knowledge and apply it it becomes wisdom that changes things for the better.

You got this, let’s go!!

 

3 Key Takeaways

At New Economy, we want to help you gain control of your finances to make smart decisions. Part of that is understanding your finances and how to drive business performance.

Here are 3 key takeaways.

  1. We believe that you need to unplug and connect. We have found it very motivating, inspiring, and great learning opportunities to attend the annual EOS conference. So ask yourself, if you are investing enough yourself to fill yourself up so you can then fill up others.
  2. Master the tools. Maybe you don’t run on EOS but there are common business tools that require mastery. Make sure you have a solid understanding of these tools like the organizational chart, budget, and even scorecard. Master them as they will help you get the results you are looking for.
  3. People matter. You matter. Invest in yourself and the people around you. By leaning into tools and even taking the time to reflect on the insights mentioned above you will increase the probability of achieving your goals and financial measurables.

There you have it 🙂

EOS

New Economy Team Members are Experts in Accounting for Entrepreneurs

If identifying ways to decrease your taxes is not in your skill set or you want to gain control of your finances to make smart decisions to build and grow your business, New Economy is an excellent partner. 

We’ll help you get your accounting and taxes done, and done right.

Schedule a time to meet with our Founder, Jeff, and discuss how we can add value to your situation.

culture

Tips to Building a Healthy Culture That Can Grow Your Business

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We are focused on building a long-term business. 

Heck, we are at the 11-year mark so we are learning and applying what we learn.

Without a doubt, at the foundation of that is people.

And the people need vision, clarity, values, and a mission to get behind. 

Prompts to get everyone aligned and moving in the same direction.

People also need to be supported, heard, cared for, and loved. 

Yup, you heard that right, loved.

culture

If you are building a business or organization, culture should be a top priority. You should be constantly thinking about how to shape, cultivate, and prune the culture.

Before we jump in, here are a few reflection questions for you:

  • How would you rate the culture in your organization on a scale of 1-10?
  • How do you define culture? And what does a healthy culture look like?
  • What investments are you making to nurture the culture that you are looking to build?

As for us, we let our customers rate us. We believe that the awesome service we strive to deliver is a reflection of the culture we have created. So we ask our customer.

Check out what clients are saying here.

We believe that culture can be defined as a set of attitudes, behaviors, and practices shared within an organization which gives it a distinctive identity.

And as for investments, we make lots. 

We have developed a care team, called Wrap Around, to care for our employees. We constantly clarify our mission, vision, and values and share ways the employees can participate in building culture. And we set aside time each month to just have fun together. But more on that later.

We believe that one of the single most important investments you can make in your business is in creating a healthy culture. And this is critical in supporting the growth of the business.

In this article, you will learn about: 

  1. Why culture matters
  2. Who’s responsible for creating and building a culture
  3. Key investments to make in culture
  4. Top 3 Takeaways

Let’s dive in.

Why Culture Matters

Legendary management expert Peter Drucker said that “Culture eats strategy for breakfast”.

Ain’t that the truth?

We believe that culture sets the foundation. 

It sets the tone for how your people operate, communicate, treat each other, make decisions, and treat your customers.

Want more?

It also sets the tone for how you hire, how you fire, and how you promote. It helps you identify customers, vendors, and partners that will align well with your organization.

In Built to Last, Jim Collins discovered that enduring companies have a culture that defines who they are and what they value to attract like-minded individuals to them. 

People who fit the culture know what to do because they can feel why it is important. Conversely, those that don’t fit the culture feel out of place.

Culture matters because it scales. 

It permeates every aspect of the business.

We are living proof of this.

Here are some outcomes of a healthy culture that we have experienced:

  • Lower employee turnover and higher engagement
  • Increased profitability
  • Increased job satisfaction
  • Stronger relationships built on trust
  • Less time wasted on non-sense such as gossip, here say and drama
  • Higher probability of achieving Company and Individual goals
  • Alignment and focus on the greater good

Here are some outcomes of an unhealthy culture that we have witnessed:

  • Higher employee turnover and lower engagement
  • Decreased profitability
  • Decreased job satisfaction
  • Weaker relationships 
  • More time is wasted on non-sense such as gossip, here say, and drama
  • Lower probability of achieving Company and Individual goals
  • Lack of alignment and focus on the great good. 

As you can see there are healthy outcomes related to a healthy culture.

And there are unhealthy outcomes relating to an unhealthy culture.

In our experience, this is a very important part of any organization. 

We believe that there is no silver bullet and it takes time to create, shape, and build a culture that will last.

Who is Responsible for Creating and Building Culture?

We believe that everyone has a role in creating and building culture.

From the newest team member to the most experienced team member folks will be either adding to or taking away from culture.

But the buck stops with the CEO or Visionary. 

The CEO needs to take ownership of the culture.

Sure we want to get the leadership team involved. This will help to multiply the efforts and bring the culture alive in the organization. 

A key point is that if the CEO does not create, and then support, the building of the culture someone else will.

Do you want your unhappy employee, who is not a right fit for your company, to go around and create the atmosphere in the company?

Probably not.

So the leadership team needs to do some groundwork in the following areas to set the baseline:

  • Define the mission
  • Define the vision
  • Define the core values

Then the leadership needs to take the following steps to build the culture:

  • Remove employees or customers that are not a core value fit
  • Provide positive feedback to employees living in the culture
  • Provide constructive feedback to employees not living in the culture
  • Bang the drum and constantly get the Mission, Vision, and core values in front of the team

At New Economy, we have a quarterly company rollout. During that meeting, we review and bang the drum on the Mission, Vision, and Core Values.

Also, we use Slack as an internal communication platform. We have a channel called core value callouts. We encourage employees to “call out” an employee and give recognition when a core value is being lived out. This helps with positive reinforcement.

There are so many different directions you can take this in.

The Company needs a Core Value Champion which is typically the CEO.

Key Investments to Make in Culture

A healthy culture takes investments.

It takes investment in time, talent, and treasures.

The more you invest, the bigger your return.

Are you willing to make investments in your organization’s culture? 

Investments in Time

We believe that building a healthy culture happens over a period of time, and it is a lifelong pursuit.

Here are some of the examples of investments that we making in time at New Economy:

  • Monthly Culture Zoom – All employees participate. This is a fun event where we create time and space to get to know each other and have fun. It is not work-related.
  • Quarterly Wrap-Around Zoom – All employees participate. We have a care team called Wrap Around. Each quarter they host an event to “wrap their arms” around the team. Our last topic of discussion is generosity in the workplace. 
  • Monthly One-On-One Zoom – All employees participate. Our first question on these is “How are you doing and how can we help?” We make these about the employees and try to remove obstacles that are preventing them from being successful.

Investments in Talent

We believe that Companies rise and fall based on leadership. As we noted above, the Leadership team has a responsibility to create a culture.

Here are some of the examples of investments that we making in talent at New Economy:

  • We have training budgets for all team members of about $1,000 per year.
  • We invite all team members to attend the Global Leadership Summit.
  • We have created a Leadership Team Oath that leaders put into
  • We have our leaders participate in coaching programs like C12, Key Players, and How to Be a Good Boss

Investments in Treasure

All we are referring to with treasure is money. Beyond developing talent and creating time for developing culture it takes monetary investments.

We have mentioned a few above in the form of the value of time through meetings and training.

Here are a few more.

  • Above we mentioned our Wrap Around team. They invest $50 per month to partner with each employee in investing in a charitable organization picked by the employee. This is $600 per year of cash donated to good causes.
  • Above we mentioned our Wrap Around team. They invest $50 per month to partner with each employee in investing in their emotional, spiritual, and physical well-being. Think gym memberships, meditation apps, and meal delivery services. This is $600 per year of cash donated to good causes.

Building a healthy culture that will last takes time.

Also, it takes investments in the form of money, talent, and more time.

But it is so worth it.

Imagine working at the place you always dreamed of working.

You can make that happen by investing in building and growing your organization’s culture.

3 Key Takeaways

At New Economy, we want to help you gain control of your finances to make smart decisions. Part of that is understanding your finances and how to drive business performance.

Here are 3 key takeaways.

  1. The CEO needs to take ownership of being the Chief Culture Officer. And he has to encourage and hold the Leadership team accountable for building and nurturing the desired culture.
  2. There are no shortcuts. Building a culture takes time and lots of work. Do the work and you will reap the rewards.
  3. Make sure you are making investments in culture. Invest in people. Invest the time in the right meetings. Invest money in the right support to help people succeed. People who buy into your culture will champion it for you.

There you have it 🙂

culture

New Economy Team Members are Experts in Accounting for Entrepreneurs

If identifying ways to decrease your taxes is not in your skill set or you want to gain control of your finances to make smart decisions to build and grow your business, New Economy is an excellent partner. 

We’ll help you get your accounting and taxes done, and done right.

Schedule a time to meet with our Founder, Jeff, and discuss how we can add value to your situation.

3 Keys to Turn Your Financial Budget into a Financial Forecast

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We are coming to the end of the quarter.

So how did your Company do?

At New Economy, we hit our measurables of revenue of $614K, gross profit of 50%, and net profit of 12%. 

Also, we hit 80% of our rocks. These are the top priorities for us in the quarter.

What did you learn?

At New Economy, we learned a lot. 

financial forecast

We learned that we need to keep making financial investments in our team members through training and growth opportunities. 

We also learned we need to increase our financial investments in marketing to help let entrepreneurs know we are here to help them gain control of their finances to make smart decisions.

But what do we do with these learnings from a financial perspective?

At New Economy, we believe you can use this information to forecast for the next quarter.

For a bit of background on creating a budget, check out our blog posting Here.

Your financial budget is set for the and will not change. 

However, your financial forecast can change based on what you have learned.

In this article, you will learn about: 

  1. The difference between a financial budget and a financial forecast
  2. When and why to update your financial forecast 
  3. Top 3 Takeaways

Let’s dive in.

The Difference Between a Financial Budget and a Financial Forecast

Most Companies, including New Economy, perform their financial budgeting towards the end of the year. 

Being a December year-end, we typically begin the process in November and wrap up in the first week of January.

The financial budget is the goalpost – think football and field goalposts. You are aiming to kick the ball through the goalposts to score. Or from a financial point of view, achieve the budget which keeps you on the path to achieving your overall goals.

You are estimating things like the investments you need to make into the business that will get allocated to hiring, marketing, and operating expenses. 

Further, you are determining your revenue goals and the direct costs to support that revenue.

It is your best guess.

You are painting the financial road map month to month to help you achieve your annual financial goals.

It’s important to note that your budget should not change.

You don’t want to move the goalposts.

We call that cheating 🙂

However, there is another very helpful tool.

It is your financial forecast. 

Your financial forecast is identical to your budget. It is set up the same way, looks the same and even works the same.

The biggest difference is you can change your financial forecast. 

In fact, at New Economy, we are constantly changing our forecast. 

But we are also continuously lining up the financial forecast against the financial budget. 

The idea is the financial forecast is updated for what is happening in the business, and in our experience that is lots of change.

At the end of the day, we hold ourselves accountable to the financial budget that was set and use the financial forecast as the real-time road map to get to the intended destination.

It’s kind of like the direction app, Waze.

You enter your destination and ways will give you the directions to get to your destination. This is like your financial budget.

However, then an accident happens. 

Waze then recalibrates and provides an alternate route. There are changes but it will still get you to the original destination. This is like your financial projection.

So, we suggest you make sure you have a financial budget.

Then modify that budget by bringing it alive based on changes or real-time information and call that your financial forecast.

In the next section, we will talk about when and why to update your financial forecast.

When and Why to Update Your Financial Forecast

When to change your forecast 

By now you should know the difference between a financial budget and a forecast.

The next question is when do we update the financial forecast?

There is a wide range of answers to this question depending on:

  • The business
  • The visibility required
  • The investment of time that’s willing to be made 

We have some customers that re-forecast weekly. 

They have built a weekly process around this and have determined that weekly forecasting gives them real-time insights that they need to manage the business.

We have some customers that re-forecast monthly or even quarterly. 

They will access real-time changes but more so look at monthly budget versus actual information. When items are on and off track, they will trigger changes to the model.

At New Economy, we re-forecast weekly. 

We have created a simple process where all the department leaders provide any material changes. It takes us about 15 minutes per week to do this and we will discuss why we do it this way in a bit.

In any case, updating on a weekly, monthly, or quarterly basis you are on the right track. 

You need to turn your budget into a forecast applying what you have learned.

Why change your forecast 

One of our taglines is we help entrepreneurs gain control of their finances to make smart decisions to build and grow their businesses.

To make smart decisions you need timely and accurate financial information like a financial forecast.

The forecast gives you the most accurate picture of how your business is performing from a financial perspective at any point in time.

Having that timely and accurate financial information allows you to do the following:

  • Determine if you are on or off track to your budget
  • Identify areas of opportunity or improvement
  • Run decision-making scenarios that show the financial impact

The reason New Economy updates the forecast weekly is to have good data for our weekly Leadership Team meeting called our Level 10 meeting. 

As part of that weekly Level 10 Meeting, we review a weekly, monthly, and quarterly scorecard which has the financial data we’re measuring. 

And you guessed it, one of the sources of that data is our financial forecast.

One last thing to note on the financial forecast.

Once a month has closed, we drop the actuals into the forecast. Refer to more information on the financial close here.

For example, if we are through Q-1, the months of January, February, and March would have actual results in the financial forecast. The remaining nine months would be the projected results.  

And we continuously analyze the financial forecast against the original budget.

A financial budget and financial forecast are very powerful business tools. So don’t sleep on the importance of implementing them into your business.

3 Key Takeaways

At New Economy, we want to help you gain control of your finances to make smart decisions. Part of that is understanding your finances and how to drive business performance.

Here are 3 key takeaways.

  1. Make sure you have a budget in place. Don’t change the budget once you set it. And build the budget showing details such as monthly and by-line items.
  2. Make sure you transition your budget into a forecast. Your forecast can be updated weekly, monthly, or quarterly. It can be changed and should be compared back to the budget.
  3. Leverage these tools in your business. They are powerful tools to help you achieve your business goals.

There you have it 🙂

financial forecast

New Economy Team Members are Experts in Accounting for Entrepreneurs

If identifying ways to decrease your taxes is not in your skill set or you want to gain control of your finances to make smart decisions to build and grow your business, New Economy is an excellent partner. 

We’ll help you get your accounting and taxes done, and done right.

Schedule a time to meet with our Founder, Jeff, and discuss how we can add value to your situation.

financial close

5 Keys to an Awesome Financial Close!

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We all know financial statements are important.

Really important.

But why and how do we get there?

We believe that financial statements are important because they can be used to help you make smart decisions to build and grow your business.

It is really that simple.

financial close

But getting there is where we see most businesses struggle.

The bridge to getting timely and accurate financial statements is the month-end close process.

Most entrepreneurs and business owners don’t realize there is actually a process. And why should they since they are not accountants?

For those that do, there are a bunch of reasons why the process is not working which we will get into later in this post.

So the end game is getting timely and accurate financials using an awesome month-end close process.

Before we move on, for more background information on financial statements check out these quick posts “3 Key Financial Statements to Leverage for Growth” and “5 Ways to Understand Your Financials to Get Closer to Your Goals”.

Now back to the financial close process.

In this article, you will learn about: 

  1. The financial close process
  2. 5 keys to an awesome close process
  3. Top 3 Takeaways

Let’s dive in.

Demystifying the Financial Close Process

Full disclosure, we just set up a ChatGPT account. 

We are excited 🙂

Here is how ChatGPT defines the month-end close process.

The financial close process, often referred to simply as “the close,” is a series of steps undertaken by organizations at the end of an accounting period to ensure that all financial transactions for that period are accurately recorded and reported. This process typically occurs monthly, quarterly, or annually, depending on the reporting requirements of the organization.

The financial close process involves several key activities, including:

  • Reviewing Transactions: Accountants review all financial transactions recorded during the period to ensure accuracy and completeness. This includes verifying that transactions are properly classified and documented.
  • Adjusting Entries: Any necessary adjustments are made to account for items such as accruals, prepayments, depreciation, and other timing differences. These adjustments ensure that the financial statements reflect the true financial position of the organization.
  • Reconciliation: Various accounts, such as bank accounts, accounts receivable, and accounts payable, are reconciled to ensure that the balances reported in the financial statements match the supporting documentation.
  • Closing Entries: Temporary accounts, such as revenue, expenses, and dividends, are closed to the appropriate permanent accounts, such as retained earnings. This process resets the temporary accounts to zero in preparation for the next accounting period.
  • Financial Reporting: Once all adjustments and closing entries have been made, financial statements are prepared, including the income statement, balance sheet, and statement of cash flows. These statements provide an overview of the organization’s financial performance and position during the period.
  • Review and Approval: The finalized financial statements are typically reviewed by management and may require approval from stakeholders such as the board of directors or external auditors.
  • Archiving Documents: All supporting documentation related to the financial close process, including journal entries, reconciliations, and reports, are archived for future reference and audit purposes.

The financial close process is crucial for ensuring the accuracy and integrity of an organization’s financial reporting. It allows stakeholders to make informed decisions based on reliable financial information and helps maintain compliance with regulatory requirements. Additionally, a well-executed close process can identify potential errors or discrepancies early, allowing for timely corrective action.

Darn, that was pretty good. Thanks Chat GPT!

Our simple and high-level definition is:

The Financial Close process is a series of steps to help ensure that each month the financial statements are delivered in a timely and accurate manner.

Entrepreneurs and business owners need the financial statements for the following reasons:

  • Access if the business is on track with its financial goals
  • Determine the financial health of the business
  • Have data to make smart decisions

Now we have an understanding of this process and why it’s important.

Let’s jump right into 5 Keys to make it awesome.

5 Keys to an Awesome Financial Close Process

Here are 5 important considerations to create an awesome close process.

Key #1 – Make sure there is a month-end close checklist.

We love checklists. They provide clarity around the steps that need to be performed to get the desired outcome.

For the desired outcome to be accurate financial statements then some steps need to be performed to accomplish that desired outcome.

Let’s look at Chick-fil-A as an example, since we love their chicken sandwiches.

Whether you go to a Chick-fil-A in Rhode Island or California your spicy deluxe chicken sandwich will taste the same, take the same amount of preparation time, and be delivered with a smile.

Why?

They have checklists covering the various components of preparation and service. And they do this at scale.

So relating to the month-end close here are a few examples of items that should be on that checklist.

Bank Accounts

  • Ensure all transactions are properly flowing into QBO
  • Ensure all transactions are properly coded to the proper GL account
  • Ensure that the bank reconciliation is prepared
  • Ensure that the reconciling items are identified around outstanding checks
  • Ensure that the reconciling times are identified around deposits in transit

Fixed Assets

  • Ensure that assets purchased over $1,000 are capitalized
  • Ensure depreciation is booked on all assets each month
  • Ensure that assets no longer being used are removed 
  • Ensure that your depreciation schedule agrees with your balance sheet
  • Ensure that  your depreciation expense agrees with your profit and loss statement
  • Ensure that repairs and maintenance are properly expensed in your profit and loss

An accountant at the staff level should be able to perform the above procedures to ensure that the accounts are properly stated on any balance sheet.

This can be replicated each month and over many types of accounts. 

You get the point, the checklist allows for scalability just like the chicken sandwich in different states at different store locations. Yummy.

Key #2 – Make sure you create accountability and set due dates.

This one is very important.

It is simple yet at the same time complicated.

Take the above example and apply it to bank accounts.

We can simply create accountability by assigning those steps to Tom with a due date by the end of the second week.

That’s pretty clear and straightforward. The complexity comes into play when Tom gets sick or information is not ready. 

The key here is to manage well, be flexible, communicate new due dates, and hold the line on accountability.

Here are some of the challenges we see that are easily avoidable:

  • No one is a named owner of the task
  • There are multiple owners of the task, thus no owner
  • There is no set due date
  • If expectations change, there is no new due date set
  • There is no conversation around accountability for missed deadlines

Keep in mind how important this is. 

The reason for our month-end close process is to deliver timely and accurate financial information and if Tom is not timely, our goal will be missed.

The answer here is to lead, manage, and hold Tom accountable. 

Key #3 – Establish a quality control review of the financials. 

Ok, so the checklist is complete and Tom has met all his deadlines.

Now we are onto the quality control process.

Remember, Tom is a staff accountant. His work needs to be reviewed and checked by Jerry the Quality Control team member.

Since we are using financial statements to make smart decisions, we want to make sure the financials are reviewed by an experienced team member.

This goes back to steps #1 and #2.

A checklist should be prepared for the quality control reviewer to perform.

Further, Jerry should have deadlines as well and should be held accountable so that we can meet the desired outcome.

It could create some real pain around cash flow if an entrepreneur makes bad decisions due to relying on bad financial statements.

A quality control review is a good investment in making good decisions.

Key #4 – Establish a month-end close meeting where the financials are reviewed.

This is one of our favorite meetings at New Economy.

Here we get to focus on our core value of delivering awesome service.

We schedule 30-minute monthly zooms to provide our entrepreneurs with financial results from the month and LOTS of knowledge that we derive from the financial statements is spoon-fed to our customers.

Here are some examples of what we discussed during the close meeting:

  • Budget versus actual results by line item with a narrative
  • Cash burn for the month 
  • Reporting on KPIs with the narrative
  • Focus on spend management
  • Connect actual results to financial goals

It’s pretty fun to tease this information out of the financial statements.

We are providing visibility and information on changes needed in the next month, based on the learnings.

Key #5 – Apply what you are learning during the financial review.

Don’t get me wrong.

There is a lot of work in steps #1-#4.

But the real magic happens here.

After that month ends, the big question is “What did we learn?”.

Maybe we learned in our budget versus actual analysis that we are overspending on software costs. This is causing us to be off track from our goals.

Our advice is to dig in. 

Is this overspending going to keep happening? Do we have to shut it down? Was it a one-time thing and it will fall back in line next month with some underspending?

I think you get the point.

There is a lot of learning in the financial statements that have action items that can improve the financial performance of the business.

This is gold for any entrepreneur.

And you don’t need a full-time accountant to pull this off.

Learn more in our blog post on outsourcing your accounting to a part-time remote accountant.

3 Key Takeaways

At New Economy, we want to help you gain control of your finances to make smart decisions. Part of that is understanding your finances and how to drive business performance.

Here are 3 key takeaways.

  1. Make sure you have a monthly close checklist. It should be written and updated quarterly. This will help you get to the desired outcome. Further, if you and your accountant should part ways you have a road map for performing the month-end close specific to your business.
  2. Make sure you are clear with deadlines and hold your team accountable. This is key to getting timely financial results. And you are also striving for accuracy so setting up a monthly quality control review is important.
  3. Once you get your financial statements, use them. Learn how to read them. Learn what they are telling you about your business. And then go take that learning to improve the financial condition of your business.

There you have it 🙂

financial close

New Economy Team Members are Experts in Accounting for Entrepreneurs

If identifying ways to decrease your taxes is not in your skill set or you want to gain control of your finances to make smart decisions to build and grow your business, New Economy is an excellent partner. 

We’ll help you get your accounting and taxes done, and done right.

Schedule a time to meet with our Founder, Jeff, and discuss how we can add value to your situation.

5 Ways to Know You Need a New Accountant

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Having the right accounting and finance team is important. 

Really important.

Why?

Contrary to popular belief, your accounting team is not just overhead.

You need timely and accurate financial information to make smart decisions to build and grow your business.

Accountant

At New Economy, we think about the right seats needed to support the accounting department for any business. Then we think about getting the right people in those seats.

Most small businesses need some form of an Accountant, Controller, or CFO. 

It really depends on the type of business, the stage the business is in, and the growth plans the business has for the future.

And each of these seats has a different skill set and value they bring. It goes from tactical to strategic in nature.

For more information on the differences between each seat check out our post on Do you know the difference between an Accountant, Controller and CFO.

But what are the signs that your accounting team is not working?

In this article, you will learn about: 

  1. The top reasons your accounting set up is no longer working
  2. 5 ways to tell it’s time to change accountants
  3. Top 3 Takeaways

Let’s dive in.

The Top Reasons Your Accounting is No Longer Working

There are several reasons why this can be the case but here are a few.

Reason #1 – Sorry, You really don’t have an accountant.

Very early on in the life of your business, you might have had Tony’s aunt doing the accounting. 

There is nothing wrong with Tony’s aunt. However, she is self-taught and doesn’t fully understand what she is doing. Sure, she can pay bills and is wicked cheap, but she’s just a family friend, not an accountant.

This is common and ok, but this will hold you back if you don’t make a move.

Reason #2 – The business outgrew your current accountant.

You have a vision of where you want to be. You are chasing down that vision and raising capital, hiring people, building processes, and executing your plan.

Your business is growing and evolving, and when that happens things can get complicated in the various departments, such as your accounting department.

But your current accountant is stuck in the old way of doing things. They don’t have a grown mindset and they are not open to technology and new ways of doing things. 

This results in delays and inefficiencies because the business is growing but your accountant is not growing with it.

This too will hold you back. 

Perhaps you have a good tactical person but need to layer on a more experienced person who focuses on strategy from an internal perspective.

Reason #3 – Your accountant is overhead and is doing too many administrative tasks.

Many internally placed accountants get very comfortable and are overpaid. 

Yup, I said it.

They have a high-level technical skill set and are compensated for it. 

But they are given tasks that don’t relate to this skill set. They start doing administrative work, they get pulled into a bit of human resources or even managing technology.

They get pulled in too many directions, are overpaid, and are no longer adding value. 

They become overhead as opposed to an investment that is helping you get closer to achieving your goals.

Reason #4 – You don’t need a full-time accountant.

Once you really dive into point #3, you may realize that you don’t need a full-time accountant. 

How can this be?

You have them focus on the functions that require their specialized skill set. Nothing more, nothing less.

For more information on this check out our blog post on hiring a part-time remote accountant.

Also, as part of not needing a full-time accountant, you can save money. You are not covering insurance, benefits, training, or even internal time to manage this person. We believe the cost of a part-time remote accountant can be a big savings with a better return on your investment.

For more information on this check out our blog post. “What will it cost to outsource my accounting?”

Ok, so now you have some reasons as to why our accounting might not be working.

And it’s ok. 

You are not alone. Part of your job is to ensure the right people are in the right seats to help you achieve your plan.

In the next section, we will discuss some of the indicators that it’s time to start thinking about some changes on your accounting team.

 

5 Ways to Tell It’s Time to Think About a Change in Accountants

So we know why you might be having issues.

But how exactly do those issues manifest?

After years of experience, we have identified 5 key ways to tell it’s time to make a change.

Here they are in no particular order:

Reason #1 – You are not getting timely financial information.

If you are not getting the following reports within the following timeline a red flag should go up:

  • Cash Flow reporting – Weekly
  • KPI / Scorecard reporting – Weekly, Monthly, Annually
  • Financial statements – Within 20 days of month end
  • Budget vs Actual reporting – Within 20 days of month end
  • Forecasting – Updates within 20 days of month end

Having timely information is important. You want to make real-time decisions based on data that is current.

Reason #2 – You are not getting accurate financial information.

If you are not getting accurate financial information a red flag should go up. The information is the same as that listed above. 

But how do you know it’s accurate considering you’re not an accountant and an entrepreneur?

Here are some thoughts:

  • Use your gut, it got you this far
  • Share the information with a peer group and compare information
  • Ask a trusted advisor or mentor with a financial background to have a look

Timely and accurate information are the keys to making smart business decisions.

Reason #3 – You keep getting surprised and are not learning from the past.

No one likes surprises. 

So if you’re looking at your budget versus actual reporting and are surprised when something is off track, a red flag should go up. 

Or if you get to year-end and your monthly financials that have been reported on change, a red flag should go up.

Or if you are caught off guard by an unexpected tax bill, a red flag should go up.

Things change fast in business, but learning and applying is key. 

Remember the old saying “Fool me once shame on you but fool me twice shame on me”?

Reason #4 – You can’t see into the financial future.

Your historical statements are very important. 

As we stated, they need to be accurate and delivered on time.

But we also need windows out into the future from a financial perspective. So if you can’t see out into the future whether it be 13 weeks of cash flow into the future or 24 months of your profit and loss out into the future, a red flag should go up.

Reason #5 – You are frustrated and feel pain and confusion on the financial side of your business.

We have said it before, trust your gut. You have great intuition.

So if even hearing the word financials causes you to feel pain or frustration, a red flag should go up.

Or if your accountant is confused and can’t seem to give you straight answers, a red flag should go up.

So there you have it; 5 examples that can give you an indication it’s time to think about changing your accounting team.

3 Key Takeaways

At New Economy, we want to help you gain control of your finances to make smart decisions. Part of that is understanding your finances and how to drive business performance.

Here are 3 key takeaways.

  1. Make sure you have the right people in the right seats on your accounting team. Early on Tony’s aunt might have been a great fit. But since you have raised some capital, have 10+ employees, and are on your way to profitability it’s time to increase the firepower of your accounting team.
  2. Make sure you are not flying blind. You should have timely, accurate historical financial statements and visibility into the future financial condition of the business based on your forward-looking projections.
  3. Trust your gut and invest in your accounting and financial team. They are an investment that should help you to get closer to your goals by providing you with invaluable insight to make great business decisions.

There you have it 🙂

Accountant

New Economy Team Members are Experts in Accounting for Entrepreneurs

If identifying ways to decrease your taxes is not in your skill set or you want to gain control of your finances to make smart decisions to build and grow your business, New Economy is an excellent partner. 

We’ll help you get your accounting and taxes done, and done right.

Schedule a time to meet with our Founder, Jeff, and discuss how we can add value to your situation.

CONTACT US

 (401) 256-2404

CONTACT US

 (401) 256-2404

Grow your business by leveraging your financial data. We’ll show you how.

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