Rose Report: Issue 19

Have We Outgrown Our Bookkeeper?

issue19-pic-story3Many small organizations and start-ups hire a traditional bookkeeper to help keep track of financial transactions. Processing day-to-day transactions requires a lot of time. As a result, many organizations hire a bookkeeper as the first step of building an accounting department. This may be a cost-effective solution in the early stages of starting a business, but as organizations grow, they often require more sophisticated accounting than a bookkeeper is capable of providing. And over time the bookkeeper may gradually take on higher level responsibilities that he or she is not qualified to perform.

Regardless of an organization’s size, it’s important to have someone who acts as your company’s CFO. This professional adopts a forward-looking, strategic position—he or she understands the financial model for the business, sees where the company is going, and ensures that the proper resources are available for the company to succeed.

In general, a bookkeeper is focused on administrative tasks and is often not as concerned with financial results and long-term financial strategy. Here are some warning signs that you have outgrown your bookkeeper:

• You are not getting routine monthly financial statements

• You don’t understand your firm’s profitability month-to-month

• Your financial accounting system does not track to your business model

• You have to make unexpected adjustments at year-end

• Bills are being paid late

• It’s taking too long to get invoices out the door

• Your books are still on a cash basis, and you analyze the company’s financial results on a cash basis

• You are beginning to fall behind in processing your financial transactions

• The company is planning on applying for a bank loan or line of credit in the near future

If you have noticed some of these warning signs happening in your business, it may be time to consider hiring a finance and accounting outsourcing firm such as Rose Financial Services to handle your accounting function. Such firms offer clients sophistication and a big picture perspective that involves much more than entering debits and credits accurately into the books. One of the biggest advantages of hiring a firm like RFS is gaining access to its broad and varied team of experts. Unlike a single bookkeeper who may be over- or under-qualified for certain tasks, RFS assigns several professionals across skill levels and specialties to each client account, ensuring that every task is handled by the most appropriate personnel.

“Most small businesses don’t make it five years,” says RFS CEO Ted Rose. “One way to improve the chance of success is to have financial professionals working with you as a partner to help you avoid common pitfalls. Our mission is to help our clients succeed in executing their missions.”