Tag Archive for: outsourced accounting

Why Companies Running on EOS Need a Remote Accountant in their Accountability Chart

/in , , /by

New Economy runs on EOS. 

We successfully graduated from a full implementation of EOS with a hired implementer back in 2020. The system has been instrumental in allowing us to build our team, systems and processes, and create company alignment around mission, vision, and values. It’s also helped us support our 3.5x revenue growth since implementation.

So clearly, we see the value in the EOS system. 

Further, we greatly appreciate the EOS community’s shared values which encompass an abundance and growth mindset, doing the right thing, giving before you get, and doing what you say.

We are grateful to be a part of the community and want to help others just as we have been helped.

We have unique abilities in the data component that can be leveraged to help EOS companies achieve their vision and goals.

We want to help you gain control of your finances to make smart decisions to build and grow your company. 

In this article, you will learn about: 

  1. Why to consider hiring a remote accountant and what to look for
  2. The proper seats and core functions to set you up for success
  3. The right tools and meeting rhythms
  4. 3 key takeaways

Let’s dive in.

What to Look for When Hiring a Remote Accountant and Why to Consider it as an Option

What to look for

New Economy is a fully remote Company. We have 15 team members in 15 different states. Further, we have 45 recurring customers that get us into another 5 states, totaling 20 states between employees and customers.

So we know firsthand that remote working works. We have leveraged the EOS tools and meeting rhythms which increase the probability of success. 

We focus on:

  1. Lots and of Leading, Managing, Accountability (LMA)
  2. Focused and consistent Level 10’s, monthly check in’s, 90-day check-ins, Quarterly and annual roll-outs
  3. Focused and consistent weekly, monthly and quarterly scorecards
  4. Documented process
  5. Technology to support the team and customers

Further, we outsource our marketing (awesome plug for Full Stadium 🙂) and legal (awesome plug for Howell Legal 🙂) to remote Companies. So not only are we a remote and outsourced service provider but we successfully leverage the service of others

So here is tip #1 –  Make sure the company has proven experience and examples of success when working in a remote environment. 

Many companies are trying to take advantage of remote working but they have not invested in the technology, process, or systems. They just are not equipped to provide awesome service (core value call out).

Another key component is alignment. Being an EOS company, we have a set of core values:

  • Deliver awesome customer service
  • Embrace learning and growth
  • Be passionate and own it
  • Build open and honest relationships
  • Continuous learning and growth

And we even look at our core values and seek to find alignment with our customers by asking questions during the early stages of the customer journey. Further, by leveraging our core values we have created the characteristics of our ideal customer:

  • Mission-driven, values-based, and growth-minded
  • Revenues and/or investor funding in excess of $2M 
  • 10+ Employees
  • Located anywhere in the US
  • Leverages technology and process
  • Wants an engaged accounting and finance partner to help them use data to grow

 

If this is you, let’s talk.

 

This leads to tip #2 – Make sure there is a degree of alignment around core values, working and communication styles. 

This takes a bit of hard work, but as an EOS company, we know it’s all about getting the right people in the right seats, and the right person just might be someone that is remote.

So now we have a sense of what to look for.

But why should I consider outsourcing to a remote company?

Why to consider outsourcing

Back in June we wrote a detailed blog posting giving 3 key reasons why you should consider outsourcing to a remote accountant. For your reading pleasure, we are including a link here.

But if you like summaries, here are the top 3 reasons why:

  1. You will likely save money as you probably don’t need a full-time hire. You won’t need to worry about space, technology, or benefits. Further, you will not be overpaying a technical person to do admin-type work. We stay in our lane and focus on what we are good at which aligns with the seats and core functions which we will talk about later.
  2. Considering outsourcing will require you to focus and evaluate your accountability chart, your people, your processes, and your technology. And this is a good thing for your business. It will require you to take a hard look at what is working, not working, and why. And one of the things about remote working and leveraging technology and process is effectiveness and efficiency because we have to.
  3. You will have a resident accounting expert on your team who does not need to be trained or managed. They work with different companies so have an inside look into many businesses and acquire best practices. They are focused and specialized in core functions that are specific to their skill set. 

So, by now you should have a sense of what to look for and why to consider outsourcing to a remote accountant.

Keep reading if you want to get a glimpse of seats and core functions in the accountability chart that will help you gain control of your finances to make smart decisions to build and grow your business.

The Proper Seats and Core Functions to Set You Up for Success

ou are probably familiar with the accountability chart if you run on EOS, and if not check out this quick video here. It acts like an organizational chart by really focusing on identifying the core functions of each role.

This is all about getting the right people in the right seats and focusing on accountability for the tasks they are responsible for. 

We figured the best way to explain the ideal chart for a growth-minded organization is to just show it.

We prefer to build this from the bottom up:

First up is your staff accountant. This team member is leveraging processes and technology to perform their core functions. They are the foundation of your accounting team. The old saying is garbage in, garbage out. The tactical inputs of this team member will be at the front end of the strategic outputs you are looking for. 

 

Staff/Senior Accountant

*AR and AP

*Payroll

*Bank & Credit Card recs

*Maintain QB

 

Next up is your Controller. This team member leads and manages the staff or senior accountant. Further, they work with creating processes and policies, and are focused on delivering timely and accurate financial information. 

 

Controller

*Lead, Manage, Accountability

*Month-end close

*Financial process

*Budgeting & cash flow

 

Next up is your CFO. This team member sits on your leadership team. They are focused on being the right hand to the CEO and supporting the overall strategy of the business. 

 

CFO

*Leadership

*Strategy

*Capital raising

*Risk

 

The above 3 seats are key for really every business, but it’s hard for a CFO to be effective if the foundational pieces are not in place. Remember, each role requires unique abilities and skills, so make sure you are setting everyone up for success. 

Here is what a health accountability chart for a growth-minded company should look like:

 

CFO

*Leadership

*Strategy

*Capital raising

*Risk

                    

Controller

*Lead, Manage, Accountability

*Month end close

*Financial process

*Budgeting & cash flow

                   

Staff/Senior Accountant

*AR and AP

*Payroll

*Bank & Credit Card recs

*Maintain QB

 

For more information on the difference between an accountant, controller and CFO, check out this blog posting here.

And here are a few pro tips:

Tip #1 – Start from the ground up. Get the tactical foundational stuff set up before bringing in a controller or CFO.

Tip #2 – Don’t over-hire. Meaning, your CFO or Controller should not be doing admin-type work. Actually, they should not be doing any work outside of the core functions listed above.

Tip #3 – The reality of it is outsourcing can save you money. Focus on the core functions which are based on specialized skills. Use Admin and operations people for all non-accountant and finance core functions.

If you are feeling pain in this area, let’s talk. We have this figured out for you so you can focus on building and growing your Company.

The Right Tools and Meeting Rhythms

Now let’s talk about tools and meeting rhythms.

The Tools

Being a fully remote company, we operate in a paperless environment with all web-based applications. There are hundreds of web-based platforms out there to meet your needs and we don’t have time to go over all of them here, but here are some essentials:

  • Quickbooks Online – Maintains all of your accounting and produces your financial statements
  • Bill.com – Provides bill payment solutions that automate and help with internal controls 
  • Expensify – Provides expense reimbursement solutions that automate and help with internal controls
  • Fathom – Provides month end dashboards and analysis like budget versus actual
  • Jirav – Provides budgeting and forecasting

And the list goes on. The key is to find a tool that is in the cloud and will add value to your life. The goal is to become more efficient as a result of the technology.

The Meeting Rhythms

Being remote, we live and die based on accountability. One of the ways we drive accountability is by having preset meeting rhythms. Much of this depends on the services our customers want but here is a glimpse into the preset rhythms we have in place:

Internal

  1. Weekly Team Level 10’s – Here we all get on the same page for what’s working, not working and solve problems
  2. Monthly Team member one on one – Make sure our team members are set up for success and help them with challenges and issues
  3. Quarterly Check-Ins – These are 90-day check-ins where we provide our team with feedback and actionable insights to help them grow.
  4. Monthly Culture Events – These are geared to help us grow in our relationships with each other. We are looking to build intentional connections and increase trust and credibility.

The above meetings impact our clients even though they are not a part of them. These meetings help to build our team up and provide clarity on timing, expectations, and deliverables. Most importantly they set the tone for our culture which is an internal thing that makes its way into everything we do.

Now onto our client-facing meeting rhythms:

External

  1. Weekly Check-ins – These are to drive alignment and build trust. They are quick meetings to “get on the same page”. Some happen in Slack and others in Zoom.
  2. Weekly Cash Flow – If we are doing bill pay or cash flow forecasting, we have a weekly cash flow meeting. This is to provide insights into cash flow on a rolling 13-week basis. (Read more about creating and following a cash flow model here).
  3. Monthly Finance Zoom – This is a fun meeting and core to our services. Here we present the financials with actionable insights. We are quickly spoon-feeding our customers relevant information from the financials to make smart decisions.
  4. Quarterly Tax Zoom – If we are providing tax consulting services, we connect quarterly to discuss tax opportunities and threats with the idea of providing peace of mind around taxes.
  5. Quarterly Budgeting Zoom – If we are providing budgeting or forecasting services we will meet quarterly to discuss what we have learned about the business and how to apply it moving forward.

Ok, that seems like a lot and there is more. Note, that we love to simplify and can combine and condense where it makes sense.

The key for us is to have preset meetings that drive engagement. This engagement allows us to provide key insights to help our customers grow their businesses. 

Here are three key takeaways:

You made it this far, now for the top 3 takeaways:

  1. Spend time reviewing your business needs as they relate to your accounting department. What’s working or not working? Get this all documented based on the above accountability chart. Once you have established the seats and functions you can then move on to getting the right people involved.
  2. Don’t overpay or underutilize team members. Meaning, your CFO should not be in QuickBooks doing basic accounting work. Further, your accountant should probably not be advising you on strategic business decisions. Build some depth on your team and outsourcing will provide a cost-effective way to make that happen.
  3. Culture. Culture. Culture. We love to focus on alignment. Make sure you take the time to align with a company that seems to have a shared value system. Ask them about their mission, vision, and values and look for areas that resonate with you.  Taking your time to get the right people in place will provide tremendous value in helping you achieve your goals and allow you to focus on what’s most important.

New Economy Team Members are Experts in Accounting for Entrepreneurs

If you run on EOS and building out processes with a focus on accountability is something your business is working towards, New Economy can help. We have the right tools and meeting rhythms to ensure your core functions are being taken care of. 

Again, it’s our goal to help you gain control of your finances to make smart decisions to build and grow your company.

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

3 Ways to Boost Your Confidence in Your Small Business

/in , , , /by

How Leveraging Financial Data and Your Accounting Team Can Help.

As a growth-stage entrepreneur, you’re constantly dealing with emotional highs and lows based on the various circumstances thrown your way that are not in your control. 

We feel your pain. 

And we have learned that this can impact the confidence you have in your small business. But what really is confidence?

Here are a few definitions. 

  • It is the feeling or belief that one can rely on someone or something.
  • Or defined another way, a feeling of self-assurance arising from one’s appreciation of one’s own abilities or qualities.
  • Or the state of feeling certain about the truth of something.

Which begs the question: Do you have confidence in your small business? And can you increase that confidence in your small business using financial data and leveraging your accounting team?

At New Economy, we believe so.

Why, you ask? 

It aligns with our efforts of helping you gain control of your finances to make smart decisions to build and grow your company. 

In this article, you will learn: 

  • What types of issues might be eroding your confidence in your small business
  • What you can do to overcome these issues 
  • Three key takeaways related to improving the confidence in your small business using data

Let’s dive in.

Small Business Confidence

What Issues May be Eroding Your Confidence in Your Small Business?

There are a few important things to discuss here. 

First off, there is no silver bullet and the game of business covers a lot of ground. Therefore, we will focus on issues on the financial side of your business, which is the space that we play in. But this approach can be applied to any department such as marketing or even operations.

So what could deteriorate your confidence in your small business as it relates to the financial side of your business?

Maybe it’s people, maybe it’s process, maybe it’s technology, or maybe it’s a combination of all three. 

Let’s Talk People

Start with the Right Seats

Before we dive in, let’s discuss the seats in your accountability chart. And here is a question–Do you have a sense of the right seats and core functions needed for your business based on your stage, growth trajectory, and goals?

We believe every entrepreneurial, growth-minded company needs 3 foundational seats, each with a different set of skills and unique abilities (for more, check out our blog on the difference between an Accountant, Controller, and CFO). Here they are:

  • Bookkeeper / Accountant – They focus on tactical things like payroll, bill payment, bank reconciliation, credit card reconciliations, and invoicing and collections. This team member may have 3-5 years of experience.
  • Controller – They focus more on the output which would be things like accurate financial statements, accounting processes, managing the Bookkeeper, and working directly with the CEO or CFO. This team member may have 10-15 years of experience.
  • CFO – They focus on the business. They are a strategy partner to the CEO and they oversee everything related to accounting and finance and will get involved in budgeting, forecasting, and helping to bring plans to life. This team member may have 20+ years of experience.

Now that we have the right seats in place, you need to find the right team members and this is where people come into the picture.

Then Find the Right People to Fill Those Seats

At New Economy, we ask ourselves a few questions about placing a team member in a seat such as the ones mentioned above.

First, are they aligned with our core values at New Economy? If not, they will not be a good fit for our company, and we don’t place them. If yes, we move on to the next question.

Do they get it, want it, and have the capacity to complete the functions needed for the seat? If not, they will not be a good fit for the seat and we move on. But maybe through training and development, we can get them there. And if yes, then we place them in the seat.

So, if you don’t have the right seats, or maybe you have the right seats but the wrong person in them, you will face challenges. Chances are:

  • You are frustrated
  • your team member is frustrated and feeling burned out
  • You are not getting financial information to make smart decisions to build and grow your business

So your confidence could be down to not having the right structure and seats in your accountability chart or not having the right people sitting in those seats.

Consider stopping doing your own bookkeeping or using Tom’s uncle’s cousin who really is a party planner! Take the time to get this right. 

If you get this right, you will have an accounting and finance department that is aligned with your vision and provides useful financial data, actionable insights, and business improvements all to help you build and grow your business. This is an investment in your business that will return extraordinary results.

Let’s Talk Process

The next issue that might be eroding your confidence in your small business is the lack of process. At New Economy we are consistently reviewing our core processes, documenting them, and training others to ensure they are followed by all.

By having documented processes in your accounting and finance department you are ensuring that team members are clear on how to do things and you are mitigating the chances for errors, inefficiencies, or even fraud. Yup, we said fraud which nobody thinks about until it’s too late.

But here is the real reason the documented process is important: It will ensure that over and over again you have a procedure in place to consistently produce a desired outcome in a timely and accurate manner. 

For example:

  • Processes will support the release of timely and accurate financial statements. A process around the month’s end will allow any controller to step in and provide you with financial data that you can rely on to make great business decisions.
  • Processes will ensure that bills are paid on time for goods and services that we have received (we have seen vendors getting paid for things they should not) and that payments are going out at the right amount per the actual purchase order and invoice.
  • Processes will ensure that your business is on track to meet its annual budget. At month’s end, the actual financials can be compared to the budget to show what is on and off track. From there, you can forecast the future based on what you are learning to see how you are lining up compared to the budget. 

We prefer to rely heavily on processes. The process runs the business and the people step in to run the process. This takes time and effort but it is worth addressing in all departments in your company.

So, if your accounting team is always late with providing information, missing key information, or off on the accuracy we can see why your confidence might be down. And it may be due to a lack of processes needed to support where the business is currently at today.

A few final thoughts:

Having a documented process may not be enough. We believe that team members need to be trained in processes. Further, the process needs to be followed by all. So, you need a process to ensure that processes are being followed – yikes! 

But in the end, the process will give you the confidence that you are receiving financial information that is both timely and accurate. And this will give you insights as to how your business is performing.

Let’s Talk Technology

Remember the old days when you used to get a set of financial statements printed on ledger paper?

We don’t! And if someone handed us a set of financial statements on ledger paper our confidence would certainly drop. We’d question, in a healthy way, if we could rely on the numbers.

See, we have built New Economy from the ground up by leveraging a technology stack that allows us to provide virtual accounting and finance services worldwide. It’s faster, more efficient, more cost-effective, easier to build processes, and easier to train team members on how to use technology tools.

However, many companies’ accounting and finance departments are still struggling to adopt new technologies that will increase efficiencies, reduce errors, and allow team members to spend more time analyzing information and providing actionable insights.

The point is: Consider what technology you might be able to use to change the game and build your confidence. 

Here are some examples:

The list goes on and on. 

But the main point is that the use of technology can speed the flow of information up and assist with increasing the accuracy. Further, processes can be wrapped around these technology tools, meaning technology has an impact on increasing your confidence in your small business.

 

What Can We Do to Overcome the Issues that are Decreasing Your Confidence in Your Small Business?

The very first thing we suggest you do is step away from the day-to-day of the business. Most growth-stage entrepreneurs have too much on their plate and it’s hard to reflect and think strategically when you are in the business.

So what do you do?

Take clarity breaks. A clarity break is a regularly scheduled appointment on your calendar with yourself. You define what regular is – a half-hour daily, two hours weekly, a half-day monthly. It’s up to you. The doing of it is what matters.

Note: We like to take these in physical spaces that motivate, inspire, and encourage us. For example, I like to take my clarity breaks in my 1986 VW camper van by the ocean. Some team members like to take them at Starbucks. But the point is, get away from your regular space.

OK, so I am in my van, now what?

We would encourage you to reflect on the above and ask the following questions:

  • Do I have the right accounting and finance seats on my accountability chart?
  • Are the functions for each seat clearly defined?
  • Do I have the right team member with the right skills sitting in the seat?
  • Do I have processes supporting each function in these seats?
  • Are the processes being followed by all? Are they evolving with the business?
  • Do I have the right technology to increase productivity?

Reflecting and answering these questions will increase your confidence in your accounting and finance team and provide you with the information you need to build and grow your business such as:

  • Ways to increase profits
  • Ways to mitigate risks
  • Ways to run smoother
  • Ways to improve business insights
  • And ultimately increase business confidence

We have subscribed to this approach to help build and grow New Economy. You can do this for literally any department in your business. 

But should you want to get there quickly, consider hiring a company like New Economy that has done the hard work for you 🙂

And once you have the confidence in the back end of your business, you are ready to go and ready to grow. You have the foundation built to support the needs of your customers while capturing market share.

3 Key Takeaways Related to Improving Confidence in Your Small Business Using Data and Leveraging Your Accounting Team

If you want to improve your confidence in your small business, consider leveraging your accounting and finance team and the data they provide.

Here are three key takeaways related to improving your small business confidence:

  1. Make sure you know the needs of your business and that you have clarified the roles. Further, make sure that you have the right person with the right skill set to meet those needs by being able to perform the core functions of the role.
  2. Lean into your process and technology. Make sure that you have a documented process followed by all. Further, make sure that you are using the best-in-class technology for efficiency purposes.
  3. Take time away from the day-to-day to reflect. Think about what’s working and not working, and what next people move you need to make. This time is valuable in that it will provide new ideas and actionable insights to chase down your goals.

Small Business Confidence

New Economy Team Members are Experts in Accounting for Entrepreneurs

If your Company’s accounting and finance team is not providing data to help build your confidence in your small business, let’s talk.

New Economy makes an excellent partner because we want you to gain control of your finances to make smart decisions to build and grow your business. 

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.

3 Reasons to Outsource Your Accounting to a Remote Accountant

/in /by

If outsourcing your accounting to a remote accountant has been on your mind, you’ve come to the right place. 

In this article, you will learn: 

Let’s dive in.

remote accountant

Why Does Outsourcing Matter?

Outsourcing your accounting to a remote accountant could have some significant upsides to your business. 

First off you are going to get an expert. That’s right you get the expert who will elevate your visibility by giving you new insight into the data side of your business. 

But why is this important? The accounting expert can help you to assure that you are meeting your business goals by leveraging timely and accurate financial information. You will move from frustration and chaos around the numbers to clarity and visibility which will help you make smart business decisions.

In addition to adding an expert to your team, you can save money and have one less person to manage as newer web-based technology is enabling remote accountants to work with businesses entirely virtually and like never before.

Outsourcing to a Remote Accountant Looks Different for Everyone

Outsourcing to a remote accountant looks different from business to business based on what you need.

  • Do you need a tactical team member like a bookkeeper? They will handle day-to-day things like paying your bills leveraging software like bill.com. 
  • Do you need a more strategic partner like a controller? They will deliver a timely and accurate set of financials to use to make smart decisions to build and grow your business.

We suggest referring to the accountability chart, otherwise known as an organizational chart, and understanding the role you are looking to place. Along with the role, you’ll have a better understanding of the core functions that will be outsourced. 

For example, outsourcing a bookkeeper could include outsourcing functions related to:

  • Payroll
  • Bill payment
  • Invoicing and collections
  • Bank reconciliations

Once you land on the role, then it’s a matter of process. Going back to the example of the bookkeeper and specifically bill payment, you need sound processes and clear expectations. 

For example:

  • Pay bills every two weeks by the bookkeeper
  • Ensure all POs are matched to invoices and shipping documents by operations
  • Obtain proper approval for the release of the payment by operations
  • Release payment by the bookkeeper

Note: All of these processes can be executed by leveraging inexpensive but highly effective software.

The last key piece is having a culture and environment that enables and leverages technology. If you have the right person and the right process this is the final piece. 

Back to our bill pay example, we leverage a piece of software called bill.com. It enables us to create and execute against the process we laid out. For instance, there are approval features and you have the ability to upload the relevant documents needed for approval into the system, allowing the approver to have access to them when approving.

Watch this to hear from our Founder on the 3 reasons to outsource your accounting to a remote accountant:

Does Outsourcing Make Sense for You? 

If all of your technology is housed in a closet in a server room then outsourcing to a remote accountant might be tough, as it’s an important piece to making this work. 

On the other hand, if you are leveraging web-based platforms like QuickBooks Online, Bill.com, Gusto, and Drop Box you are on the right track to creating a technology stack that can be used. 

Fear not, if you have the desire to transition into the digital world that is an option too.

Here is a question for you: 

What are the qualifications of the person maintaining your books, financials, and projections? 

Many companies have a person in the accounting or bookkeeping seat that is not qualified. 

Basically, they got the short end of the stick! But imagine a world where you had access to a team member that had unique abilities in this area as a trained professional. They are efficient, effective and provide relevant financial information to help you make smart decisions to build and grow your business. 

That’s what we are really talking about. A team of experts that will be operating as a partner to provide data to help you make good decisions.

Lastly, there can be significant cost savings to outsourcing to a remote accountant. The key to this is to have this person focus on core functions that relate to their specific technical skills. You don’t want your accountant getting into HR or administration. You want them to focus on specific tasks that require their knowledge. 

Top 3 Reasons to Work with a Remote Accountant

1/ Moving into this arrangement will force the business to access processes, people, and technology to ensure that you have efficient and effective people, technology, and processes to help you achieve your goals.

2/ You will have a resident accounting expert that does not need to be trained or managed. They will help gain control of your finances so you can build and grow your business.

3/ You will likely save money as you probably don’t need a full-time hire. You won’t need to worry about space, technology, or benefits.

remote accountant

Searching for a Remote Accountant? 

If you’re looking to outsource your accounting to a remote accountant – look no further. 

New Economy exists to help entrepreneurs gain control of their finances to make smart decisions to build and grow their business. 

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

How to Create and Follow a Cash Forecasting Model

/in , /by

To help you understand how to create and follow a cash forecasting model, let us paint a picture for you. 

The Hero

Every hero has a story. And we are big fans of the hero. You are the hero in this story. 

Picture yourself as Luke Skywalker. 

You are the entrepreneur working really hard and doing amazing things. You have guts, passion, and are willing to put it all on the line. We understand where you are coming from and have tremendous respect for you. 

But we also understand that it’s not easy. 

The Problem

In every story, the hero has a problem to solve. Some are more challenging than others, there is a problem we see over and over again. 

Entrepreneurs:

  • Don’t have the financial visibility to know when cash needs will arise
  • Don’t know how to be proactive to avoid these needs 
  • Don’t have the time to pull the information together
  • Don’t have the unique abilities to work through the issues

This is your Darth Vader and it can have massive implications on your ability to build and grow your business. Nobody wants to run out of cash.

The Guide

Another essential aspect of a good story is a guide.

New Economy, with its team of experts, financial tools, and trusted processes, is grateful to play the role of the guide. 

We want to help you solve the problem. We want to help you succeed. We are your Yoda.

In this article, we’ll take the opportunity to explain how we can help you solve this common problem i.e. get rid of your Darth Vader. Specifically, we’ll talk about the importance of visibility around cash flow and the projection tool we use to help our heroes become triumphant. 

The Cash Forecasting Model aka The Tool

Here at New Economy, we believe that entrepreneurs need a tool to see their cash flows out into the future. We like to provide this visibility over a rolling 13-week period. 

Our tool is very easy to use and is accessible by way of Google Sheets. 

It’s our goal to start simple and solve the problem at hand (lack of data for visibility and decision-making), only then will we introduce automated technology and dig deeper into your finances.

You can check out our free cash flow tool here. 

Getting Started with Your Cash Forecasting Model

Before diving head-first into your cash forecasting model, you need to do some planning, investigating, and info-gathering.

This can be a time-consuming process, so be patient and give it the time it needs, ensuring your records are thorough and complete. Keep in mind, hard work now has the possibility to make massive impacts on your business and help you sleep better at night :). 

Here are some simple steps you can take to get started:

  1. Analyze historical spending
  2. Understand spending needs
  3. Cut, reduce, and extend payments
  4. Identify cash flow gaps
  5. Identify solutions to cash flow gaps

As you gather this information, you’ll need to get deep into the “weeds”. Look at your accounts receivable and accounts payable journal and take a close look at historical bank statements since we are talking about cash. These are the source documents that will be utilized to build out the tool. 

We always advise clients to be detail-oriented because the more information you include in the tool, the better your results will be. 

The above data will be utilized to show the cash in and cash out needs of the business. We will be leveraging the historical results to predict the next 13 weeks. 

A great start is to sign up for that cash flow tool noted above which will walk you step by step through the process of building out the tool.

Your Transformation

Nailing down a cash forecasting model comes with plenty of benefits. You’ll gain stronger business processes and intelligence around:

  • Cash collection acceleration techniques
  • Proven effective collection policies
  • Proven effective credit policies
  • Proven effective payment policies
  • Building cash reserves
  • Preparedness on meeting obligations before they occur

Remember when we said a well-built cash forecasting model will greatly impact your business and help you sleep at night? 

We meant it. 

Ending with Success

What does success look like in your story? If gaining financial security establishes itself as a success indicator for your business, our team at New Economy has you covered. 

With our help, we’ll work to help you get the feeling of financial security based on the ability to predict cash flow needs. 

You’ll be able to: 

  • Know when, where, and how your cash flow needs will occur
  • Know the best resources for meeting cash flow needs (Debt, Equity, Factoring)
  • Prepare to meet those needs in advance
  • Set goals for building cash reserves
  • Set goals for paying down debt
  • Improve collection processes and techniques

Your success is important to us and as a recession looms, cash forecasting models need to play an even larger role in your financial management processes as they can prepare your business for what’s to come. 

If you want to learn more, schedule a time to meet with Jeff, the Founder of New Economy! We help entrepreneurs gain control of their finances to make smart decisions to build and grow their businesses.

We’d love to be a part of your story.

Outsourced Controller Services: Everything Your Business Needs to Know

/in , /by

Have you ever felt frustrated, overwhelmed, and out of control with the financial state of your business? 

If so, you’re not alone. In fact, 66% of business owners say they are in the same boat, constantly scrambling to get the numbers right and things done on time. 

Let’s face it. You need help managing your finances, but don’t worry, we’ve got you covered.  

At New Economy, we believe the outsourced controller plays a key role in your financial team and serves a valuable role in growing your business. 

Let’s Define New Economy’s Outsourced Controller: 

They are just like you. 

Our outsourced controllers have passion and guts and are willing to put everything on the line. With their unique financial skills, they want to support people that believe they are changing the world and help them in that mission. That person is YOU! Our controllers are for you and your business!

They are accountrapreneurs at heart.

They will provide financial information that directly impacts your goals. They will manage and report on the accounting systems, financial statements, and budgets to bring efficiency and visibility to your operations. Their work is a vital foundation for allowing you to learn about your business and help it grow. 

They are team-focused leaders. 

They are leaders operating in a team environment providing numerous avenues for collaboration, problem-solving, and breaking through barriers. You will work with and tap into the knowledge of your outsourced controller on a regular basis. 

Why Do You Need an Outsourced Controller?

Outsourced controllers add incredible value to finance teams. Here are some of the reasons you may need an outsourced controller: 

  • You are looking to make smart, data-driven decisions.
  • You are looking to connect the financials to the business objectives and goals.
  • You are looking to have timely and accurate financial reports to make smart decisions.
  • You are looking to increase the depth of your accounting department with an expert.
  • You are tired and frustrated with the current accounting team’s output.

When Do You Need an Outsourced Controller? 

If you found yourself checking the boxes on “why” you need an outsourced controller, your next question is likely, “Is now the right time to bring one onto our team?” 

Here are the top five signs you need an outsourced controller: 

  • Your business is growing.
  • You are not getting timely and accurate financial reports to make business decisions.
  • You are overpaying your current full-time controller to do administrative tasks, HR, and other non-accounting functions.
  • Your systems and processes need to evolve to support the business.
  • Your current accounting team is not helping you achieve your goals.

Check out our article, “Top 5 Reasons to Engage a Part Tim Controller or Accountant” for more information on these points! 

What is the Cost of an Outsourced Controller? 

Another valid question refers to the cost of outsourced controllers. Let’s crunch a few numbers. 

First, run a salary benchmark for your location for a controller’s salary. You’ll find that this number typically lands between $90K-$125K for startups and small businesses. 

Next, add on 20% or more to cover benefits like payroll taxes, 401k contributions, and health insurance. 

Then, add time to manage, train, and develop this person; trust us, this is a lot! 

But then, reduce that overall cost by 20-30% by having the team member focus on very specific matters that require their expertise. For example, they focus solely on financial statements but do not spend any time on administrative tasks. 

Wondering If an Outsourced Controller Could Fit into Your Business? 

If all of this sounds great, but you’re still questioning how it could work for your business, check out the list below. More often than not, if you meet the following criteria, this strategy has a high probability of success:

  1. You leverage technology and are okay with a remote work environment. 
  2. You are an investor-backed startup with at least a year of runway OR a growing small business with revenues between $2-$40 million. 
  3. You run on EOS or have a culture that is collaborative, engaged, and values financial input. 
  4. You are looking to build the best possible team to set you up for success. 
  5. You are educated, business astute, and technically competent. 
  6. You have a pleasant, outgoing personality with a positive disposition. 
  7. You are motivated to have accurate financial systems, insights, and visibility. 
  8. You are willing and open to learning. 
  9. You are looking to invest in process and infrastructure. 

So, Why New Economy? 

Wondering why New Economy is the best choice for an outsourced controller as opposed to other companies? 

We believe we have three key differentiators: 

  • A team-based approach
    • We run on a team-based approach of proven accounting and financial processes that will help you grow your business. 
  • Technologically advanced
    • We use the top technology to provide you with the most agile financial reporting and insights. 
  • Accountrapreneurs
    • We are accountrapreneurs who understand your business’s challenges and speak your language. 

Our team at New Economy was designed to help entrepreneurs gain control of their finances and make smart decisions to build and grow their business. 

Schedule a time to meet with our founder, Jeff, to learn more about how the outsourced controllers at New Economy can help and fit into your business!

What Will it Cost me to Outsource my Accounting?

/in , , /by

Outsourcing accounting is trending in the business world. 

Depending on the role you choose to outsource, entrepreneurs reap many benefits, like: 

  • Accurate and timely financial insight
  • Strategic support and guidance
  • More time to work on the business instead of in it
  • Cost savings

If you’re exploring this option for your business, one of your primary questions is most likely, what will it cost me to outsource my accounting? 

The following article will answer this question based on New Economy’s numbers so you can have a rough estimate of the total cost savings you’ll receive from outsourcing your accounting. 

Know What You Need

Before you begin to think about the cost of outsourcing your accounting, you need to be clear on the kind of service you need, whether it be an accountant, controller, or CFO. 

Each service has a different function, so you want to make sure you’re outsourcing based on your needs. 

An accountant is tactical in nature and takes care of the basic financial management that is required for compliance and business success. 

A controller is a bit more experienced and typically leads the accounting staff. They’ll have more insight into your business and have the ability to make operational improvements to your financial system. 

A CFO is a strategic partner and will work with the CEO to perfect the business model and ensure the business is meeting its financial goals. 

For more detail about each role, check out our article on the topic. It’ll help you select which service is the right fit for your business so you can properly outsource your accounting. 

Let’s Define the Cost Savings (Sorry for the data and detail, we are number crunchers!)

The cost of hiring a full-time employee can pile up, and this is before you even think about the time and salary. 

However, outsourcing your accounting to New Economy offers plenty of cost savings in a few key areas. 

Training Investments

IT and Technology

  • We cover all of the IT and technology investments which is roughly $5k per employee each year. 

Fringe Benefits

  • We cover all of the fringe benefits including payroll taxes, 401k match, and health insurance. To put this into perspective, this means we are investing between $15K-$20k per employee each year based on a $75k salary. 

Management Time

  • We cover all of the management time on each account which can be a bit more challenging to quantify. However, you are now valuing your own time. 

So as you can see, New Economy covers anywhere between $25k-$35k in costs that, when you outsource your accounting, you do not have to assume. And keep in mind, these numbers don’t include salary. 

Before we Jump into Salary, Consider the Time that You Need

When you take into account the costs above and include a salary of $75k per year, you’re now shelling out anywhere between $100k-$110K for a full-time employee. However, this begs the question, do you really need a full-time employee? 

We are learning that many internal accounting hires are pulled into operations or admin work. When this happens, they are being overpaid and under-challenged. And you run the risk of losing them.

To avoid this, you need to understand the true time needs in accounting. This will reduce your investment in this area. 

For example, a full-time controller could cost between $80K-$125K, but if you only need a 50% schedule, your cost will reduce dramatically. 

Now onto Salary, Keeping in Mind we are Focused on Growing Small Businesses and Startups

Let’s take a look at the typical salaries for hiring full-time: 

  • A new accountant can cost anywhere from $55K-$65K
  • An experienced accountant can cost anywhere from $65K-$80K
  • A Controller can cost anywhere from $80K-$125K
  • A CFO can cost anywhere from $125-$200K

In our experience, most growing small businesses and startups don’t need full-time accounting help. 

So the true cost savings of outsourcing your accounting while still obtaining top-tier talent would be: 

  • $25K-$35K on technology, training, and benefits
  • 20%-30% of the salary by leveraging the team member in their unique ability and removing all admin and operational type work

Interested in Outsourcing Your Accounting to New Economy? 

At New Economy, we believe outsourcing is a great way to help you gain control of your finances to make smart decisions to build and grow your company. 

Our team comes from a great culture where they are nurtured and developed and we are proud of the awesome service they deliver. 

Based on the above, you can see that there can be significant cost savings in outsourcing your accounting.

If you are interested in learning more about our service, reach out to us today!

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 $2.2M in revenue.

Subscribe