Does My Company Need a CFO?

/in , , /by

As you know, a CFO can add value to your company. They have the strategic mind to financially engineer plans to raise capital, provide leadership, create and implement systems and processes that will support your business growth.

However, before making the decision to hire a CFO, you’ll likely have plenty of questions: 

  • What exactly do they bring to the table? 
  • Is my business in the right position to make the hire? 
  • How deep do my pockets have to stretch to bring a CFO on board?

To bring some clarification to the decision-making process, we’ve answered some of the top questions for determining if your company needs a CFO.  

What Does a CFO Do?

A chief financial officer wears many hats and each comes with valuable benefits for a business.

Oversees All Things Financial

It goes without saying that a strong financial position is a necessity if you hope to have a successful business. Including a CFO in your team makes this possible. 

Their primary goal is to understand the ins and outs of your finances. Meaning when it comes to managing cash flow, creating budgets, leaning into financial forecasts, ensuring accurate reporting, and everything in between, a CFO will have it covered. 

Strategic Advising 

Not only will a CFO have a strong understanding of your finances, but they will also be able to offer experienced and data-backed advice to help your business make the right decisions. 

They’ll serve as a planner and map out strategies with your goals in mind. From there, a CFO will implement and track the progress of those strategies to ensure your business sees success. 

Apart from the more obvious financial strategies like improving profitability and building cash flow, CFOs offer strategic advising for:

  • Organizational changes like mergers, acquisitions, and IPOs.
  • Negotiating vendor contracts to ensure you are getting the best out of your money.
  • Building relationships outside of our organization but within the financial community like lenders and potential investors.

Building Infrastructure

Everything within your business requires a process. Whether it’s from a production, operational, or financial standpoint, you have (or should have) a system. 

One of the roles of a CFO is to create systems and processes that help your finances stay organized and on track. This could include anything from:

  • Implementing a new payroll software
  • Creating a new way to track your cash flow
  • Integrating a new bookkeeping system

The idea behind this work is that your business will be able to run much more smoothly and efficiently with the proper infrastructure in place. 

Building and Developing the Team

CFOs serve as the right-hand to upper-level management. They analyze everything from a financial perspective, which can be incredibly useful when building and developing a team. 

A CFOs insight can be helpful for determining:

  • If it is the right time to hire. 
  • Feasible salaries and benefits for employees.
  • Productivity and efficiency among current employees.

When Does My Business Need a CFO? 

Typically, rapid growth plays the largest role in determining if your business is CFO-ready. As you grow, the need for financial assistance and expertise increases.

For example, a growing business often runs into the need for capital. A CFO understands the process of valuing your business, meeting with investors, pitching the deal, and then creating a plan for properly utilizing the money. They provide all of the support you would need to secure funding for growth.

As mentioned, the faster your business grows, the more financial support you will need. Your:

  • Budgets will have to be more detailed.
  • Reporting will have to be more accurate and advanced.
  • Forecasts will have to predict a multitude of different situations.

Every area of your business’ finances will require more attention and expert-level analysis, something only a CFO can offer. 

Once new strategies are in place and your finances begin trending in the right direction, your entire team will need to be on board. For your success, it’s essential your team sticks to their budgets, understands their role from a financial standpoint, and reaches their assigned goals. A CFO serves as a financial leader, providing your team with the information they need to understand why they play an intricate role in your business’ success. 

What Does a CFO Cost?

When a business owner is weighing the pros and cons of hiring a CFO, cost typically sits front and center. However, there are two routes you can take when it comes to reaping the benefits of a CFO. 

Full-Time CFO

A full-time, in-house, CFO spends all of its time building strong finances for your business. As an employee of your company, you’ll be required to pay them a salary with equity and offer additional benefits. 

If you choose the full-time CFO route, you’ll be paying anywhere between $300K-$400k a year to receive all of the benefits above. 

Part-time/Outsourced CFO 

The second option is to hire a part-time/outsourced CFO. They will take time to understand your business and your goals. Even though they are not full-time, they still offer the same services and you will receive the same benefits.

When you work with a part-time/outsourced CFO, your monthly bill will range between $6K-$12K per month. Oftentimes, with this option, you can pick what level of service you’d like, which is why the prices vary. 

If you are interested in working with a part-time/outsourced CFO, consider New Economy. We offer lite CFO services which include strategic planning, capital raising, and financial modeling for forecasting and future visibility. Our goal is to help entrepreneurs gain financial clarity and make smart decisions. 

Schedule a consultation with us today to learn how we can help you get the most out of your business!

Top 5 Tax Questions for Entrepreneurs

/in , , /by

As tax season gets underway and entrepreneurs begin their prep, plenty of questions come to the surface. 

When do I need to file? How can I save the most money? Will hiring an accountant be worth the investment? 

In this article, we will answer these questions and more so you can be confident you are filing accurately this tax season.

1. What are the due dates for my company’s returns?

As an entrepreneur, due dates for your company’s returns will vary depending on how your business has been organized. 

Tax Returns

If your business is structured as a c-corporation you will file using Form 1120. If your business has elected s-corporation status you will file using Form 1120S. LLCs may be classified as a disregarded entity, a partnership, or a corporation in the eyes of the IRS. 

Generally, C-corps are required to file by the 15th of the fourth month following the corporation’s tax year. S-corps and partnerships are required to file by the 15th of the third month following the corporation’s tax year. Disregarded entities follow the filing of the owner of the entity.  

1099’s & W-2

As an employer, you are required to report employee wages on Form W-2. This filing is required to be prepared and sent to your employees by January 31st. 

Other payments to non-employees may be required to be reported on Forms 1099. Payments to independent contractors, payments to attorneys, payments of interest, or rent are just a handful of scenarios in which Form 1099 may be required. Filing due dates for Forms 1099 are dependent upon different factors so it is best to consult with a professional.   

2. Are there any big changes in the tax code I should be aware of?

Due to the COVID-19 pandemic, the last couple of years have brought about many changes to the way businesses file their taxes. Changes to the tax code have likely affected your business.

One major change is related to the employee retention credit (ERC). Unfortunately, the employee retention credit program ended effective September 30, 2021, for the majority of businesses. However, a business may be able to retroactively claim the ERC. The IRS has provided a notice outlining conditions to avoid a failure to deposit penalty due to the abrupt end of this program as some businesses may have underestimated their tax obligations.  

Another mentionable change is related to the utilization of net operating losses. Generally, losses generated in years after 2017 are limited to 80% of taxable income and can only be carried forward.  The CARES act temporarily allows for losses generated in 2018-2020 to be carried back five years. Carryback of these losses may result in a refund of taxes paid previously – be sure to check with a professional on your unique tax situation.  

Typically, 50% of business meal expenses are deductible for tax purposes.  IRS Notice 2021-25 has provided for a temporary 100% deduction for business meals purchased from restaurants in 2021 and 2022. This increased deduction can save your business tax dollars.   

3. How can I save money and reduce taxes?

Figuring out how to save money on taxes is every business owner’s top priority during tax season. Here are the two best ways to do it.

Stay organized with a platform like QBO or Xero

A common flaw for many entrepreneurs during tax time is a lack of accurate records. Expenses fall through the cracks and trying to clean up your books at the end of the year becomes a nightmare. 

However, using a platform like Quickbooks Online or Xero can help you avoid this and save you money even though they come with a fee. These virtual bookkeeping platforms allow you to track all of your expenses, so when it comes time to make deductions, you’ll have everything in one place.

Logging your transactions throughout the year also makes year-end closing simpler, because hopefully, you will have caught any discrepancies ahead of time.

Capture credits

There are plenty of credits available for businesses. Tax credits are claimed by submitting the required form and will lower your tax bill dollar-for-dollar. The two credits you should be aware of are the R&D credit and ERC.

The Research and Development Tax Credit is meant to encourage businesses to invest in the creation or improvement of products and processes within your business. Please don’t hesitate to reach out to us if you think you may be eligible for this credit.

As mentioned earlier, there was a change made to the ERC inhibiting its use for the final quarter of 2021. However, it can still be claimed for the first three quarters of the year. Your business may qualify based on how many employees you have. 

4. Is my product or service subject to sales tax?

Whether or not your product or service is subject to sales tax boils down to where you are conducting business. It varies by state and while most states do have a statewide sales tax, some do not. The world of sales tax is frequently changing and is nuanced based on a variety of factors relating to business line, services, location of employees, etc.  

We can help you navigate sales tax laws and link you with a team of professionals so you can shift your attention to your business.  As you can imagine, making sure you are placing the correct sales tax on your products or services correctly is crucial to limit your tax penalty exposure. 

5. How much will it cost to have a professional handle my taxes?

Handing your taxes over to a professional is ideal. They will work with you to ensure you meet important deadlines and are claiming credits and deductions your business qualifies for. Accountants are well-versed in tax code, meaning they are on top of any changes or important information you need to know before filing. Your ROI for working with a tax professional will not go unnoticed.

If you’re interested in passing off your taxes to a professional, consider working with New Economy. We help small businesses and investor-backed startups gain control of their finances and make smart decisions. 

Schedule a discovery call to discuss the cost associated with our services and to learn how we can help your business grow! 

 

Sources of Capital and How to Evaluate Them

/in , /by

Capital is used to fund the day-to-day operations as well as the long-term growth of your company. You must obtain it and use it wisely to create a strong, healthy business. 

In most companies, the capital structure is a combination of various sources of capital. It’s important you understand each source and how it will affect your business goals and long-term success. With this information, you will be making smarter decisions for your business.

Sources of Capital

Let’s take a closer look at several types of capital and how they work.

Debt Capital

Debt capital refers to any type of money that is borrowed and must be repaid. 

There are a variety of ways you can secure debt capital including: 

  • Credit cards
    • Business credit cards function similarly to personal credit cards. You’re given a credit line and are expected to repay the credit within a given time period, if you do not repay in time, you will begin collecting interest. 
    • Credit cards will best serve your business if you need a smaller amount of financing or don’t qualify for loans.
  • Bank loans
    • Borrowing money through a bank lender isn’t always easy for new businesses. Banks can be leery of lending to businesses lacking proof of financial stability. However, this is one of the more common ways to secure debt capital. Usually, interest rates are low and the money can be used on anything. 
    • Bank loans are good for short or long-term debt, depending on the size of the loan and how quickly you plan to pay it back.
  • Government loans
    • The Small Business Association (and some other programs) offers loans and is the most popular way for entrepreneurs to acquire debt capital. However, you have to explain why you need the capital and show you are able to repay the loan. 
    • Again, depending on the size of the loan and how quickly you plan to pay it back, government loans may be a good option. 

Like most forms of debt, debt capital requires an agreement to pay interest. This can be a drawback to using debt capital because if you aren’t careful, you could create a much bigger financial burden for your business. Additionally, in the unfortunate event your business fails, you are still responsible for paying what is owed. 

On the other hand, leveraging debt capital comes with its advantage. Since your debt is finite you, or your lender, can calculate exactly how much is needed for repayment each month. As long as you don’t miss a payment, and once the debt and interest are fully paid, the burden is no longer on your plate. 

Another advantage to using this type of capital is that it does not dilute the owner’s interest in the company like other forms, such as equity capital which will be discussed in the next section. The debt is yours, meaning you pay for it with your revenue. You don’t have to worry about paying out your revenue to equity owners. Your money stays within your business. 

Equity Capital

Equity capital is money from invested shareholders. As mentioned in the previous section, using equity as a form of capital dilutes the owner’s interest in the business because each shareholder is considered part-owner, even if it is just a small fraction of the company. 

Here are the two most common forms: 

  • Common stock
    • Common stock is typically sold to shareholders to raise capital. Shareholders with common get some say in certain business decisions and could potentially receive random dividends.
  • Preferred stock
    • Preferred stock owners have no voting rights but businesses usually pay a fixed dividend to preferred shareholders before they pay common shareholders. However, businesses are not required to pay anything.

Unlike debt capital, equity capital does not need to be repaid, however, businesses will usually provide some return on the investment made by shareholders based on market performance. Equity is most useful when your company’s eyes are set on high levels of growth and you are looking to scale the company quickly. 

Like any source of capital, leveraging equity comes with its advantages. 

  • You and your business are not required to repay investors. Resulting in less risk because there isn’t a required payment due, even if your business fails.
  • Investors could end up being a significant benefit to your business, depending on the role they want to play. 
    • Types of investors: 
      • Angel investors – Angel investors usually are closely connected to the business, offer less than $500,000 as an investment, and typically stay out of management decisions. 
      • Venture capitalists – Venture capitalists are picky investors who generally want a say in business decisions. 
      • Accelerators – Accelerators offer mentorships, investors, and other support to new businesses. They will play a heavy role in the management of your business. 

While you may find benefits from equity capital, you may be put off by some of its disadvantages.

  • Leveraging equity requires a lot of your time.
    • You’ll need to provide your shareholders with a detailed look into your business plan and continually update them on your progress. 
  • There’s a chance you’ll lose control of your business. 
    • The more involved your shareholders are, the more say they will want in business decisions. 

Crowdfunding

Crowdfunding is a newer, growing type of capital that is accessible to companies. It is the use of small amounts of funding from a large number of people to reach the desired goal. Instead of turning to one lender, the funds come from many individuals.

Social media has aided in the uprising of crowdfunding because large amounts of people are easily accessible. Investors can come from anywhere to support your business.

Crowdfunding comes with its benefits: 

  • You won’t have to give up equity in your company. 
    • Multiple investors are giving your business money simply because they support the idea. They expect nothing in return. 
  • You can test the market. 
    • Investors are quite literally buying into your business. A high level of support in crowdfunding can often mean a high level of support within your market. 

However, a disadvantage to crowdfunding is that it can carry a negative reputation when it comes to public opinion because it is sometimes seen as a last resort to funding.

If your company does not have access to alternative forms of capital, crowdfunding may be an option.

Capital Grants

Capital grants are an award of money given to the company to achieve a specific goal or to incentivize performance. These are funds that do not have to be repaid but may come with some conditions.

A range of grant options are available and each is a bit different in terms of applying for and obtaining them. Most often, there is an application process for those that meet basic requirements. Companies must meet the specific eligibility conditions to apply. Usually, this means you are a part of a specific industry and your business has shown its ability to grow. 

If you have a specific need, this type of funding may be your best option, considering you often have to prove how you are using the money to meet that need.

Grants create a strong influx of funding and are beneficial because there are – usually – no costs associated with them. However, it can be difficult to track the success of grants and there is always the potential to lose a grant, which could put your business at risk financially.

Need Help Determining Which Source of Capital is Right for You?

Selecting which source of capital is right for your business can be difficult. As we’ve discussed, there are plenty of factors at play, and turning to the wrong source could result in financial distress. 

This is why we recommend working with a trusted accounting partner, like New Economy. We will learn the ins and outs of your finances and work with you to determine the best source of capital for your business, taking the work off your plate, and ensuring financial success. 

New Economy is ready to answer your questions and help you implement best practices for using capital to help you reach your business goals. 

Let us be the partner you need! Contact New Economy, to learn more! It 

Top 5 Reasons to Engage a Part Time Controller or Accountant

/in , /by

If we had to make an educated guess, we’d say you likely have a lot of tasks on your plate, and your accounting probably sits low on your “love list”. How did we do?

Accounting is time-consuming, tedious, and can be complicated. It’s not on many people’s list of favorite things. It’s certainly not where most entrepreneurs prefer to dedicate their time when priorities like customer relationships, operations, and logistics demand attention.

Still, whether to outsource accounting is a decision not to be taken lightly, so let’s look at the 5 top reasons small business owners like you are choosing to outsource accounting.

Top 5 Reasons to Engage a Part Time Controller or Accountant

1. Your Business is Growing

You can handle your finances now. You’re small scale and just need a few spreadsheets. It’s fairly easy to keep track of expenses because they’re predictable, and you don’t have that many. But something’s changing as you grow. It’s getting more challenging to keep everything straight or find the time to sit down with receipts and a calculator.

As you grow, you make more money, but you also face higher demands. Your payroll is growing too, and an increasing number of employees, vendors, and customers are counting on you to make smart business decisions and keep this ship moving in the right direction.

All of this means you have more to manage, but you can’t afford to let your accounting fall behind because you need those up-to-date figures to make informed decisions.

Outsourced accountants keep track of your numbers and offer sound advice, so you understand the next steps in growth.

2. You Need a Stronger Business Strategy

66% of small businesses say they have trouble with finances. They say their number one issue is maximizing cash flow.

86% of small businesses would struggle to maintain current operations if they lost just two months of revenue.

This house of cards business model leads to many small business failures, but when you strengthen your business strategy, you can improve cash flow and weather shifting markets, economics, and natural disasters. You can take calculated risks to grow your company.

Business strategies are key to a successful business. When you don’t have them, you make decisions on a whim or limited information at great risk. As you grow, so should your business strategy. If a business isn’t growing and looking toward the future, it will fall behind its competitors.

Financial statements may look like a bunch of numbers to the untrained eye. But to an accountant, they tell a story of where your business has been, how it’s doing, where it’s going, and what you do to influence that trajectory.

When you understand the numbers, you can set more meaningful goals so you have a foundation to refer back to and can push your company to its full potential.

3. Your Systems and Processes Will Improve

With a strong business strategy will come better systems and processes. A closer look at your numbers can help you spot overspending, waste, poor productivity, quality issues, and even careless errors (or fraud) that are costing you money.

Accountants will work with you to create systems that work best for your business, such as:

  • Customized reporting
  • Tracking
  • Payroll
  • Industry and financial compliance
  • Timely reconciliations
  • Accounts payable
  • Avoiding tax or other penalties
  • Accounting automation
  • Pricing analysis and strategies
  • Aligning business goals with financials to streamline and grow
  • Budgets vs. Actual

Better systems lead to a more financially healthy business.

4. You’ll Save Time and Money

Accounting will be their job, not yours. That’s not to say you won’t look at or engage with your financials. But accounting professionals can analyze, summarize, and deliver information to you in the most useful form.

Spend more time doing what you do best, running your business. And the best part is you don’t have to pay for an in-house accountant. Outsourcing is typically cheaper. You do not have to pay for someone full-time or manage benefits. You only pay for what you need.

How does outsourcing accounting save you time? It allows you to:

  • Focus on other areas of business so they perform better with fewer errors and fires to put out
  • Work with someone who knows their industry intimately and gains the same in-depth knowledge of your business to advise you, for swift, agile, and confident decision-making
  • Reduce risks as you experience fewer “wrong turns” that end up wasting your time and money
  • Speed up revenue generation with the right people, technology, business, goals, and strategies

5. You’ll Have a Trusted Financial Partner

Their only job is to manage your finances. They’re not being pulled in a million directions, putting out fires, or trying to juggle several priorities. This leads to accuracy and efficiency. You can trust there will be no costly mistakes. Accounting professionals have safeguards in place on top of learning to check, double-check, reconcile, and re-check everything.

If you have questions, they are there with answers, and their in-depth knowledge of your financials makes them the ideal person with whom to discuss important business decisions and how to adapt in competitive industries. Gain control of your business and its direction by working with a trusted accounting partner.

Would you like to learn more about the value that outsourcing accounting delivers to growing businesses? Turn to New Economy. We will manage your finances to run your business. Learn more about turn-key accounting services for entrepreneurs.

How to Manage and Proactively Build Cash Flow in Your Business

/in , /by

A strong cash flow is a deciding factor between a successful business and an unsuccessful one. It indicates the health of your business. This is why it’s so important to manage cash flow properly and take the necessary steps to build it up. 

Entrepreneurs who want to develop a cash flow system for best practices should follow these steps. From improving accounts receivable to better managing vendor contracts and product pricing, there are so many ways you should and could be building cash flow. 

Benefit from gains in revenue into the new year now with these tips for managing cash flow.

Track Everything and Utilize Forecasts

Keeping adequate records of revenue and expenses is one of the most important steps in managing cash flow. If tracking is off, your overall cash flow will be off. Good tracking also ties into creating a forecast. Cash flow forecasts show you where you expected your finances to be and can play a huge role in goal setting. 

Goals are a necessary means of making sure your business is striving and achieving in areas that will grow your company by leaps and bounds.

Use forecasts as a benchmark for reaching your cash flow goals. They will ensure you are on the right track and implementing the correct tasks and processes. Include forecast data and results after the fact in your financial reports. This will help your business keep on pace with any necessary changes that need to be made.

Keep a Close Watch on Your Accounts Receivable

Accounts receivable have a huge impact on your cash flow numbers. Keep accounts receivable prevalent so your cash flow is primed for smart financial growth. Do this by following and aiming to improve three simple processes you are doing anyway for your business:

  • Collect payments on time
  • Track exactly how much you are owed
  • Know what is past due

Improving these areas can be much easier if you automate the process. You can also implement the assistance of an online accounting firm or CFO services from a third-party associate to give your accounts receivable processes an edge.

Update Vendor and Partner Contracts

Vendor and partner contracts can sneakily decrease your cash flow. They may go up in price over time, or you could be overpaying. Either way, it’s important to know what is happening between vendors and their services. Keep track of when contracts end or prices change. That way you can find a cheaper route that improves cash flow.

Ask for an updated price list on a monthly basis or whenever pricing updates are made by each of your vendors. You should also take advantage of any sales or price reductions on similar products and services when they arise. By looking over updated pricing sheets your vendors provide, you will have the information you need for smart purchasing decisions.

Vendors may also have a customer rewards program you can sign up for to save even more money. Watch out for any subscriptions or reoccurring product purchases, though. These may loop you into fuel price surcharges or other unexpected market-related expenses. You want to avoid making the mistake of signing lengthy contracts for items that you may not need in the near future as well. Be cautious of those vendor deals that look too good to be true, and you’ll stay on course with spending in this area.

Run a Pricing Analysis

If your cash flow is suffering, it may be because you aren’t charging the right price. Maybe you’re charging too much and customers aren’t making the purchase. Maybe you aren’t charging enough and your expenses are outweighing your revenues. A pricing analysis will help you set the right price for your business and, in turn, boost cash flow.

Tools and software are essential to this part of the process. You are able to increase cash flow through the smart implementation of free tools that will greatly benefit your business. Figure out where these tools can best serve your company with pricing analyses before you make any purchases. This will also make you savvier within the retail market for products that your company needs to use.

Work With an Experienced Accounting Partner

Cash flow problems are not something to let slip through the cracks. You need to manage cash flow issues properly by constantly working to find ways to correct them for your business. When you work with an experienced accounting partner, like New Economy, you can be sure everything is being done to move your cash flow in the right direction.

Right now, you can also take advantage of our free cash flow projection tool. Determine what else you can do on your own, for free, with our five pro tips for cash flow stimulation and confidence-boosting. 

We also want to hear from you directly. Schedule an appointment with us today to learn how we can help you grow your business.

Evaluating Your Growing Company’s Budget as Year-End Approaches

/in , , /by

Budgets are essential for success in your growing company. They work as a guide to determine the resources needed to execute your vision, help with decision-making, and can serve as the backbone of a financially healthy business. 

However, plenty of growing companies create a budget and then push it to the side. If growth and a strong financial system are important to you, you’re going to want to keep your budget close, and consistently refer back to it each month to ensure you are on the right track.

Not only does properly evaluating your budget serve you in the current year, but it better equips you for the year ahead. 

Here are several ways you can evaluate your budget as year-end approaches. 

Compare to Actuals and Make Adjustments

Running a budget variance report is one of the most effective ways to evaluate your budget. Budget variance looks at your budget and compares it to your actuals. This will show you all of the areas where improvements could be made. 

From there you can make adjustments, based on data, that will redirect or improve your spending for the remainder of the year, making sure you finish strong and have a solid foundation for the year ahead. We refer to this as forecasting and you still want to hold yourself accountable to the original budget.

Making changes now will put you in a good place as you dive into creating your budget for the upcoming year. Spending that is recurring or on your budget in the previous year will be accounted for, meaning you can lean into those numbers and be confident in your spending plan. 

Plan for Changes

As you wrap up the current year and head into the new, you probably have a good idea of any new changes and resources that will be needed to drive your future vision.

Maybe you’re hoping to boost sales and believe launching a new marketing campaign will do just that. Be sure you account for this increase when preparing your budget for the year ahead. You also should consider other expenses like:

  • Changing to higher-priced vendors
  • Outsourcing work
  • Hiring new team members

These are all expenses you may not have had in the previous year but can foresee for the year ahead. 

Inversely, you may be cutting back your expenses by:

  • Changing to lower-priced vendors
  • Improving your sales channels
  • Lowering your costs of goods sold 

Also, consider the ways in which you will fund your budget based on your plans:

  • Maybe you need to raise capital through equity financing to support growth
  • Or perhaps there is debt capital available for cash shortfalls
  • Or maybe your plan is supported through self-generating cashflows

Be sure to plan for changes either way and incorporate them into your budget. This will help strengthen your budget and hopefully lower the number of changes you’ll need to make throughout the year.  

Tie Your Budget Back Into Your Goals

Your budget was likely created with your goals in mind, so have you checked to make sure you’re still on track to reach those goals? And what have you learned in this process that can be applied moving forward?

Being within your budget is great, and is a goal within itself, but if you aren’t reaching your other previously set goals, you still may need to make adjustments. 

For example, let’s say you want to lower your debt by year-end and you’ve been evaluating your budget to see if there are any areas where money isn’t fully being used. You notice you’ve been within your expected spending for marketing, in fact, you have allocated more money to marketing expenses than needed, and you have extra funds in this area. This may be the perfect opportunity to shift some of that remaining cash towards paying down your debt. 

One of the most important takeaways from the budgeting process is learning. And then becoming better predictors based on that learning as we apply it to the future.

Involve Your Team

There’s a good chance you relied on your team to help you create a budget, so it’d be beneficial for you to turn to your team to help you evaluate it as well. They may be more familiar with spending and the pulse of day-to-day operations. 

Involving your team can bring about new insight for: 

  • Lowering spending in certain areas
  • Being aware of areas the budget could be adjusted
  • Knowing where there may be changes coming

An added benefit to involving your team is that it creates an extra layer of accountability to their spending. When they are active in creating and evaluating the budget, they have a better idea of what is going on financially and how and where money should be spent. 

Turn to a Trusted Financial Partner

Evaluating your budget prior to year-end is incredibly important. Not only will it help you make adjustments to get you where you want to be this year, but it will also assist in creating a strong budget for the year ahead. 

To make sure your evaluation process is giving you all of the information you need to be successful, consider working with a trusted accounting partner, like New Economy. We’ll make sure your budget is accurate and focused on reaching your goals and take time to create a budget strategy with you that makes sense for your business. Through our partnership, you can confidently be prepared for the year ahead. 

Want to learn more about how we help growth-minded entrepreneurs? Schedule an appointment and we’d love to learn more about your business.

Download Our Free Cash Flow Tool

Want to dig deeper into your cash flow insights? We’ve created a free tool that will help you truly understand cash flow projection.

Download our cash flow tool here

CONTACT US

 (401) 256-2404

CONTACT US

 (401) 256-2404

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

Subscribe to my bi weekly Newsletter for tips, tricks and curated content on how we grew New Economy from $0 to $3M in revenue.

Subscribe