Controller vs CFO, which one suits your business needs?

Oct 16, 2024

Controller vs CFO, which one suits your business needs?

Your business might be growing to the point where it has come time for an investment beyond a regular staff accountant and/or bookkeeper. Perhaps you need someone who can help your company? Prepare for its first audit? Or need someone who can take the time to look at the bigger picture financially for your company? The biggest difference between a controller and Chief Financial Officer (CFO) is what area of focus they cover. Controllers are more for today’s events and day-to-day details. CFOs focus on the future and bigger, broader events.

Controller: Overview

Controllers, or even accounting managers, usually focus on the day-to-day accounting activities. Such as ensuring tasks for payroll, Accounts Payable (AP), and Accounts Receivable (AR) are recorded correctly and the financial statements are being updated accurately. In smaller businesses, controllers usually operate with a few other individuals on the accounting team. They can take over some of the responsibilities mentioned for CFOs. As companies increase in size, the Controller takes on more of a managerial approach, reviewing work instead of being hands-on and inputting journal entries directly. A controller’s focus is ensuring accuracy and compliance with financial reporting and metrics that your company needs to succeed. Companies of all sizes hire controllers. They tend to be one of the most important hires in understanding financial reporting and where any issues could come from.

CFO: Overview

CFOs focus on the bigger picture of budgeting and planning. They are usually found in larger companies as the company expands beyond what a controller might be able to provide or have time for in their role. However, the scope of the work and value provided by a CFO can benefit small businesses, as well. While controllers are normally experts of accounting, CFOs usually have a strong understanding of accounting as well as a finance background to go with it. CFOs are in constant communication with the CEO and other executives. They work closely with together. Developing long-term financial strategies and address risk management. CFOs are added to the financial/accounting picture once these responsibilities and tasks either become too much for the controller to handle or there is a need for them in the company’s long-term plans.

Moving Forward

This is just a general overview of differences between controllers and CFOs. If you have a new financial vision for your small business, we would be happy to assist. We specialize in helping owners achieve their goals. Providing both Controller and Virtual CFOs for your business needs.

Contributed by: Amanda Dunning

Key Reasons Small Businesses Should Have Strategic Planning

Oct 2, 2024

KEY REASONS SMALL BUSINESSES SHOULD HAVE STRATEGIC PLANNING

Running a small business comes with many challenges. With limited resources, tight budgets, and increasing competition, every decision becomes vital. This is where strategic planning becomes crucial. A well-thought-out strategic plan acts as a roadmap to success. It helps to guide business owners through challenges while creating a clear path for growth. Here are key reasons why every small business should have a strategic plan.

Provides Expert Financial Guidance

Without a clear strategy, small businesses can easily lose direction. A strategic plan offers a clear vision of a business’s future and its objectives. It helps to ensure that all decisions align with the business’s long-term goals. This clarity allows business owners and their team to make well-informed decisions, stay on track, and consistently work towards their business’ goals.

Setting Priorities

Small businesses often have limited resources, whether it be time, money, or personnel. A strategic plan helps prioritize tasks and initiatives that align with the business’ objectives. Concentrating efforts on things such as eliminating distractions ensures effective and efficient utilization of resources.

Improves Decision Making

Decision making can be a major challenge for small business owners. Without a strategic plan, decisions tend to be reactive rather than proactive. A strategic plan offers a foundation for making informed choices that align with the business’s long-term vision. This approach helps prevent impulsive and uninformed decisions that negatively impact the business.

Mitigates Risk

All businesses encounter risk, such as competition, market fluctuations, or economic downturns. A strategic plan helps in identifying potential risks and creating strategies to mitigate them. By anticipating and preparing for unforeseen challenges, small businesses can protect themselves from potential issues.

Take Away

Strategic planning is not exclusive to large businesses; it is a vital tool for small businesses as well. It supports growth, manages risks, and aligns efforts with a business’s long-term goals. By dedicating time and resources to strategic planning, small businesses can better navigate complex markets, make smarter decisions, and foster future growth. Whether starting a new business or seeking to expand, a well-crafted strategic plan can be the key to achieving success. Here at Cheryl Jefferson & Associates let us help you achieve that success.

Contributed by: Elizabeth Partlow

Unlocking the Power of FP&A: Why Small Businesses Can’t Afford to Miss Out

Sep 4, 2024

Unlocking the Power of FP&A: Why Small Businesses Can’t Afford to Miss Out

FP&A and its importance for small businesses: In the hustle and bustle of running a small business, it’s easy to overlook the finer details of financial planning and analysis (FP&A). After all, isn’t FP&A something only big corporations need? Well, not so fast! In reality, FP&A can be a secret weapon for small businesses, helping to forecast future cash flows, manage resources efficiently, and make sound decisions that drive growth. So, why is FP&A so important for small businesses? Let’s dive in and explore how this often-overlooked practice can make or break your company’s success.

What Exactly is FP&A?

Before jumping into the benefits, let’s break down what FP&A really is. Financial Planning & Analysis (FP&A) involves:

Budgeting and Forecasting: Predicting future revenue, expenses, and financial performance.

Financial Reporting: Creating detailed reports that provide insights into the business’s financial health.

Data Analysis: Analyzing financial data to support strategic decision-making.

Scenario Planning: Preparing for various financial scenarios to mitigate risks.

FP&A isn’t just about crunching numbers—it’s about transforming those numbers into actionable insights that can propel a business forward.

Why FP&A is a Game-Changer for Small Business

1. Better Decision-Making: FP&A provides a clear view of where your business stands financially and where it’s headed. With accurate data at your fingertips, you can make informed decisions rather than relying on gut feelings. Whether it’s expanding your product line, hiring new staff, or investing in new technology, FP&A helps you weigh the pros and cons with hard numbers.

2. Boosts Profitability: One of the key reasons FP&A is important for small businesses is its ability to highlight areas where you can cut costs or improve efficiency. By continuously analyzing financial data, FP&A can uncover trends that impact your bottom line, allowing you to pivot strategies before it’s too late.

3. Cash Flow Management: For small businesses, cash flow is king. Without a clear understanding of your cash inflows and outflows, it’s easy to run into trouble. FP&A helps you track cash flow trends and predict future needs, ensuring you always have enough liquidity to keep the wheels turning.

4. Risk Management: Business is full of uncertainties—market fluctuations, economic downturns, unexpected expenses. FP&A equips small businesses with the tools to anticipate potential risks and develop strategies to mitigate them. By running “what-if” scenarios, you can prepare for the unexpected and safeguard your business’s future.

5. Aligns Strategy with Financial Goals: FP&A connects the dots between your business strategy and financial performance. It helps you set realistic financial goals and track your progress toward achieving them. By aligning your strategic objectives with your budget, FP&A ensures that every dollar spent contributes to your broader business aims.

FAQs

Q: Isn’t FP&A too complex for a small business?

A: Not at all! While it can seem intimidating, there are many FP&A tools and software designed specifically for small businesses, making the process easier and more accessible.

Q: How often should small businesses conduct FP&A?

A: Ideally, FP&A should be a continuous process. Monthly or quarterly reviews are a good starting point to keep your finances on track.

Q: Do I need to hire an FP&A specialist?

A: Not necessarily. Many small businesses start by leveraging existing staff, like a bookkeeper or accountant, to handle basic FP&A tasks. As your business grows, you might consider outsourcing FP&A functions to a virtual CFO at Cheryl Jefferson & Associates .

Wrapping It Up

FP&A isn’t just a buzzword for big companies—it’s a vital tool that small businesses can leverage to stay competitive, grow sustainably, and navigate financial challenges with confidence. By embracing FP&A and its importance for small businesses, you’re not just managing your money—you’re setting up for success. So, don’t wait until you’re in the thick of financial troubles. Start your FP&A journey today, and watch your small business thrive like never before!

Contributed by: Cheryl Jefferson Cooke

4 Reasons a Small Business Needs a CPA

Apr 2, 2024

4 Reasons a Small Business Needs a CPA

For many small business owners, the ongoing demands of daily operations and the constant change of laws and regulations present a daunting challenge. With limited resources and expertise, these entrepreneurs often find themselves in an uncertain position. Running a profitable business while attempting to promote growth becomes a constant juggle. Each decision carries weight, making the necessity for financial expertise abundantly clear. Some may view hiring a Certified Public Accountant (CPA) as an additional expense. However, the value they bring to small businesses is irreplaceable. Here are four reasons a small business needs a CPA:

Provides Expert Financial Guidance

CPAs are highly trained professionals. They have spent many years going through rigorous training to perfect their craft. Specializing in areas such as accounting, financial management, and taxation. Their extensive knowledge allows them to provide tailored guidance to your business. Helping to promote growth while assisting in achieving the business’ goals.

Ensures Compliance with Regulations

Laws and regulations, especially regarding tax, are ever-changing. On top of that, they can be quite complex. CPAs help small businesses navigate these ‘bumpy roads.’ They not only help with ensuring compliance, but also can help develop strategies that are beneficial for your business.

Improves Business Efficiencies

CPAs have a ‘knack’ for identifying inefficiencies in businesses processes and procedures. Often providing solutions to implement streamlined procedures, better accounting software, and establish internal controls. Having the skills to analyze data to identify strengths and weaknesses goes a long way as well.

Accurate Financial Data

CPAs help small businesses maintain accurate financial data. This is done through account reconciliations and trend analysis. Not only does this ensure accurate financial data, but it points out any anomalies that may need to be further investigated. Accurate financial data leads to accurate financial statements. CPAs prepare financial statements, which provide insight into a business’ financial performance.

These are four reasons a small business needs a CPA. Although, the expense of a CPA may seem like a burden to business owners. The vast amount of knowledge and expertise far outweighs the expense. Here at Cheryl Jefferson & Associates we specialize in helping business owners achieve their goals.

Contributed by: Elizabeth Partlow

The Importance of Data Security for Small Businesses

Mar 1, 2024

The Importance of Data Security for Small Businesses

Small businesses are growing more vulnerable to cyber threats and data breaches. They have become a prime target for hackers. Cyber criminals focus on these types of businesses because they often lack resources that their larger counterparts have. The consequences of a data breach can be devastating. Often leading to financial losses, damaged reputations, and even business closures. Small businesses must prioritize data security to safeguard their assets. Understanding what data security is, and following simple steps can help protect your small business from a data breach.

What is data security?

Data security refers to the protection of digital data from unauthorized access, corruption, or theft. It consists of three core elements: confidentiality, integrity, and availability. Data security involves implementing an array of techniques, technologies, policies, and procedures. This process is designed to safeguard data from potential threats and vulnerabilities. Data security seeks to mitigate risks associated with unauthorized access, data breaches, cyber-attacks, and other potential threats to sensitive information. It is essential for protecting the three core elements, ultimately, safeguarding businesses and their clientele.

Protecting your data

Small businesses have many options to be proactive and safeguard their data. This helps to significantly enhance their data security. By implementing a combination of these steps, businesses can protect their data against cyber threats and data breaches.

Implement Strong Access Controls: Establishing strong authentication methods, with role-based access controls helps to reinforce data security. This allows businesses to regulate access to sensitive data. Ultimately, ensuring that only authorized personnel can view or manipulate it.
Educate Employees: Investing in ongoing employee training programs on cybersecurity is essential in safeguarding your data. Employees play a crucial role in maintaining data security. Therefore, it is imperative that they understand the importance of strong passwords, recognizing phishing attempts, and following security policies and procedures. Prioritizing employee training can help reduce the likelihood of security breaches and enhance overall data security.
Encrypt Data: Businesses should utilize encryption techniques to protect data both at rest and in transit. By encrypting data, if an unauthorized user gains access to it, they will not be able to decipher it without the decryption key. Developing proper procedures for sensitive data through encryption helps to prevent unauthorized access to confidential information.
Backup Data Regularly: Regular data backups are essential for mitigating the impact of data loss due to a cyberattack. Businesses should have automated backup processes in place to create copies of critical data. Backups should be stored securely in cloud storage or somewhere offsite.

Data security is paramount for small businesses due to the number of risks and threats they face every day. Implementing data security measures helps to reduce the risk of a successful cyberattack. As a small business, we truly understand the importance of data security and the pain points you may be facing.

Contributed by Elizabeth Partlow

Signs You Have Outgrown Your Bookkeeper

Feb 1, 2024

Signs You Have Outgrown Your Bookkeeper

Bookkeepers play a vital role in managing financial records for small businesses. However, as a business undergoes development and growth, its financial needs may surpass the capabilities of a bookkeeper. Depending solely on a bookkeeper may become insufficient during these stages of growth. It becomes imperative for the business’ success to adapt to its evolving financial needs. But how does a business owner know when it is time to make these changes? The key is recognizing the signs that indicate the business has outgrown its existing bookkeeping setup.

Here are four signs your business has outgrown its bookkeeper:

You Are Too Involved in Bookkeeping

Business owners should be focusing on growing their business, not closing their books. An owner that is heavily involved in the day-to-day bookkeeping tasks is a clear indicator that the business may have outgrown its bookkeeper. It is natural for owners to be hands-on in the beginning. However, ongoing heavy involvement can become a bottleneck as the business expands. Business owners are most effective when they focus on strategic decisions, driving growth, and enhancing core business aspects.

Technological Adaptation is Limited

Leveraging advanced accounting software and integrating financial systems with other tools is essential for efficient financial management. A business’ bookkeeper must keep up with these advancements and improve their knowledge continuously. Without this development and knowledge in technology, there is a misalignment with the evolving needs of your business. Ultimately, a clear indicator that you have outgrown your bookkeeper.

Lacking Internal Controls

At times, a business’ ‘bookkeeping department’ includes one person performing multiple tasks. Internal controls are essential for detecting and preventing errors in financial processes. As a business expands, the volume and complexity of financial transactions grows. Without proper internal controls, including segregation of duties, risk of errors in record-keeping, reconciliation, and financial reporting increases. Lacking internal controls may be another sign you have outgrown your bookkeeper.

Your Business is Too Complex

As your business grows, its financial needs often become more complex. This is where strategic planning comes into play. Strategic planning involves forward-thinking, which focuses on forecasting and anticipating future goals. A bookkeeper’s role should evolve with the company. However, if your bookkeeper’s primary focus is on routine tasks and does not actively participate in the planning, this is a clear indicator you have outgrown your bookkeeper.

Recognizing the signs that your business has outgrown its bookkeeper is not an indication of failure. It presents you with an opportunity for strategic enhancement. At Cheryl Jefferson & Associates, we focus on accounting and forward-thinking development for small businesses.

Contributed by Elizabeth Partlow

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