As a small business owner, you’ll need to be involved in the direction your company is headed. When you first start out, you’re going to wear many hats: You'll have to make decisions about marketing, accounting, hiring, and billing — even if these tasks aren’t the core function of your business.
But as your business expands and changes, there may come a time when you need to let go of some decision-making and delegate tasks to others. Letting others handle your business finances is an especially significant decision since your business’s profitability is one of the most important metrics of business health and success.
Read on to learn more about what you can hand over (and what you can’t), how to stay in the loop, and when it’s time to make the decision.
A Professional Eye Could Be Good for the Bottom Line
Financial tasks are time-consuming, but the good thing is that nearly all routine financial tasks can be delegated or outsourced. When deciding which financial processes to take off your plate as a business owner, focus first on regular daily, weekly, or quarterly functions. Tasks like bookkeeping and payroll are meticulous, but also recur on a predictable schedule, so those are good responsibilities to consider outsourcing.
Depending on your business size, structure, and gross annual revenue, your taxes may also be quite complex. Certified public accountants (CPAs) charge a fee to prepare and file your business taxes, but it could save you valuable time — and if they’re familiar with your business industry, they might even be able to help you take advantage of tax deductions you might not be aware of or know how to maximize.
The choice between hiring a professional to prepare your taxes versus attempting to do it yourself could result in thousands of dollars in savings, or even prevent you from making costly filing mistakes.
Don’t Give Up All Your Control
Delegating financial management is an important part of the process if you want your business to grow, though it’s not without risks. Letting another person manage your business finances could expose you to fraud, so it’s important not to completely take your hands off the wheel.
If you’re thinking it might be time to let go of some financial supervision, here are a few things you can and should still do as a business owner:
- Do a background check on whoever will be overseeing your finances. Whether you’re looking for someone to run an audit, file your taxes, or just do routine bookkeeping, it’s important that the person or team of people managing your business finances follow the ethics and laws of the profession. Running a background check on potential candidates is a routine practice to ensure there are no red flags with who you hire or contract. (It also gives you peace of mind.)
- Inspect sales reports and profit and loss statements on a regular basis. Just because you’re letting others handle the details of accounting doesn’t mean you can, or should, abdicate all oversight. It would be wise to review sales reports and profit and loss statements on a regular basis. Not only does this help you maintain a sense of the overall financial picture of the business, it’s also a safeguard to ensure nothing fraudulent is happening.
- Ask questions, especially before making a big purchase. You may not want to get in the weeds of the financials if you’re going to let a professional handle the day-to-day operations, but it’s still OK and important to ask questions about business finances. This is especially the case if you’re going to be making a big purchase or need a down payment for commercial real estate or business equipment. You’ll want to know how much cash you have on hand and what your cash flow is like before making a major investment.
Depending on your business structure, you may be partially or entirely liable for any business financial decisions, so it’s important not to completely take your eye off the ball.
New and Growing Businesses Can Benefit From Additional Oversight
Business applications have been up 69% nationwide from April 2020 to April 2021, showing that even a global pandemic can’t squash Americans’ entrepreneurial spirit. But with a new business comes new responsibilities, so novice owners juggling payroll and employment taxes for the first time should seek advice.
Even if your business isn’t new, you may be facing a sales surge with the swings in consumer demand from the pandemic — and a lot more transactions to record might mean a need for bookkeeping help. If that sounds like you, handing off control of your business finances will free up more time for focusing on high-growth initiatives. As you navigate the process, keep these tips in mind, and you’ll be able to relinquish control with confidence.