Running your own business involves a lot of overlapping areas of expertise, from conceiving of new products, bringing them to market, getting vendors for parts in place, and so on. As your business grows, the fundamental question of "where the money is" becomes more important – there's more to financial statements than just the monthly balance on the company checking account.
Good financial statements need to list the following four items: Balance sheets (what the company owns in terms of equipment, inventory and other tangible assets), income statements (what the company expects to earn) cash flow statements (what the company expects to spend relative to what it's taking in), and shareholder equity statements.
While none of these documents are particularly challenging to compile, for a lot of small businesses, they become tedious – when reconstructing your sales sheet for a calendar quarter feels like digging through an archeological dig, it results in the business shutting down every quarter for financial preparation time, or the end of the calendar quarter turns into a frantic period where everyone's trying to make up for the regular statements that should've been done every week or before.
Even worse, if you're trying to get your business financial assistance with a loan, federal grant, or bringing in a new investor, you'll have to make these statements ready to be viewed – and they can mess up the entire deal.
This is why, even if you have the capabilities of doing them in house, unless your business is large enough to have an internal accounting division, or, even a professional accountant or bookkeeper on staff, it's better to have a professional go over these statements for you and prepare them for you. Much the same way that you'd get a certified electrician to upgrade your power lines, or have an attorney who specializes in business law go over your statements for a merger or acquisition, having a professional accounting firm audit your books and prepare these quarterly financial statements allows you to use the expertise of someone who does this routinely, rather than turning it into the mad quarterly scramble to write the 10-K in time for the IRS.
In addition to ensuring that these important financial statements are done correctly, this also lets you focus on the tasks needed to be done to grow your business. One of the hardest rules in running a business is learning when to delegate, learning when to move a task off of the founder's desk and into the desks of employees in the business, or outside the company for paid professional help. As the business owner, you should be focusing on the long term strategic vision of your business, how to make it grow, and keeping an eye out for untapped markets, not preparing financial statements.
William Douglas Management has been providing quality
association management services to North Carolina and South Carolina since 1980 focusing on
Homeowner and Condominium Owner Association Management .
