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If you are a small business owner you have likely contemplated whether or not you need an in-house CFO or you would like to outsource your CFO services. This can be a challenging decision, as both options can be beneficial to your business. We’ve put together a list of a few advantages and disadvantages for both to help you decide:
In order for a business to run effectively, it must have structures in place that support financial reporting excellence. At TGG, we have created the TGG Way™ to help small businesses receive the expertise they need to succeed. Every TGG client is assigned a team of four accounting professionals to support their financial needs. Here are the roles we believe contribute to the success of your accounting team:
Financial Reporting for non-profit organizations can be complex. Navigating what you should include in the presentation, how to prepare it for the board members, and how to hold your non-profit accountable for where the funds are coming from can be complicated. Here are a few pointers on the best things to include, and how to differentiate between different types of funds:
Leadership is vital to a companies success, especially during times of crisis. Therefore, your leadership team needs to be prepared to make educated, quick decisions for the well being of your business. CFOs have a huge role in the decision-making as they understand your business’ numbers best. How can you CFO help your business move the needle post-COVID and beyond?
Here are a few ways:
On March 31, 2020, Matt Garrett, TGG founder and CEO, helped small business owners and employers alike to understand the economic stimulus package. This bill is complicated, but also extremely important for small businesses during these uncertain times. Here are a few key takeaways from the bill, and how you can move forward with your business plan.
During these uncertain times, it has never been more important to create profitability. The global pandemic and the closure of most businesses, has caused anxiety surrounding businesses staying afloat. At TGG, we understand how important your business’ profitability is to maintain, especially right now. Here are a few tips to creatively increase your profitability when you may not be able to run your business as usual:
Many people do not understand the differences between the varying roles of your accounting team. For example, Controllers and CFOs hold similar roles with a few key differences. As your business continues to grow, the ability to produce accurate, efficient financial statements will be increasingly essential to your success. This starts with hiring a rockstar accounting team. Here’s the best way to do it:
Many small businesses that are considering their future growth have considered hiring a fractional team to come support their everyday business functions. Fractional models offer many benefits to business owners that choose to go that route. These models can allow your company to get expert assistance at a lower price. Outsourced services are meant to assist and support your company as you grow and expand your business. How can your small to medium-sized business benefit from fractional services?
Cash flow forecasting can be a lifesaver for your business during uncertain times and preparing financial forecasts in advance is always the best option. But if you have been working to navigate COVID-19 without any forecasts, remember — it’s never too late to start.
These forecasts provide your team with a better understanding of your business and how well it is functioning. This information allows you to make timely, well-informed decisions without excessive effort. Wondering where to begin? Here are our top tips for cash flow forecasting:
For businesses looking to expand their business without tacking on the steep cost of hiring an in-house CFO to their annual budget, an outsourced CFO hire can be the perfect solution. In this article we explore the advantages of hiring an external CFO, so you can make a more informed decision for your company.
Managing a company’s resources can feel like a daunting task for some business owners. The challenge becomes even greater for company’s with a high level of annual revenue and a large customer base to account for — without proper financial management, you could be leaving millions of dollars in value on the table.
As the effects of coronavirus continue to unfold, you may have decided that it is time to sell your business and move on. As a business owner, it is vital to have a plan for a possible exit as soon as you start your business. How can you start planning for your business’s future? Here are a few tips:
As many small business owners expected, the SBA PPP loans have proven to be an excellent option for funding during this uncertain time. However, many small businesses were blindsided by how quickly these funds were depleted and became enraged after learning that large corporations like Shake Shack and the Lakers received these loans before most small business owners had an opportunity to apply. Here’s how that happened and what the SBA is doing to fix it:
At the beginning of the SBA PPP roll out, there was a significant amount of confusion surrounding what information was required from small businesses to apply, including what paperwork was necessary and what precisely that paperwork needed to show before they got the chance to apply.
The SBA PPP Loan funds have been replenished recently and are currently being disbursed among many small businesses throughout the U.S. Recently, Treasury Secretary Steven Mnuchin announced that all SBA PPP Loans of over $2 million will be subject to an audit. That being said, businesses who take out smaller loans may also be audited, but every business that takes out a loan of more than $2 million can count on a visit from the IRS within the next few years.
A controller is someone responsible for all accounting-related activities within an organization. Financial Controllers report to a firm’s CFO. Their duties include the preparation of operating budgets, overseeing financial reporting, and performing essential functions related to payroll.
A Work In Progress (WIP) report consists of an accounting schedule that’s a portion of a company’s entire balance sheet. In best practices, each accounting period has a calculated work in progress report that complies with GAAP principles. These reports are required on projects where the Percentage of Completion (POC) accounting method is used. The WIP report typically consists of current period and project-to-date financial metrics that explain each contract the company is working on, however, the format does change from company to company.
Staff Accountants are the backbone of any good accounting firm and handle the majority of basic accounting functions for your company. When you have great Staff Accountants, your business will run more smoothly, and your CFO will be able to make the best possible decisions. When it comes to accounting, every small decision matters in a big way for the company as a whole. Here are a few qualities to look out for when hiring Staff Accountants:
Small businesses are among the most vulnerable groups to fraudulent activity. These businesses are more susceptible and face a greater risk of fraud because typically, they have employees working across many different departments as their job description, there is a closer relationship between the staff and owners, there are few oversight procedures in place, their accounting department has less expertise on financial functions, and there is a larger impact on the bottom line of a small fraudulent event.
How can you prevent fraud in your small business? Here are a few tips to help you keep your company safe:
No matter how emotionally attached you feel to your business, it is essential to start considering an exit strategy as soon as you open your doors. An effective exit strategy will allow your company to take advantage of timely opportunities, such as an acquisition, an IPO, or a lucrative partnership. Planning for future changes by using these types of strategies will also give you the flexibility to set aggressive goals and pivot accordingly as you reach them.
With the new normal becoming a reality for everyone, how can we prepare our businesses to survive and thrive during this unprecedented time? TGG Founder & CEO, Matt Garrett, and Stacey McKibbin, CEO of Consilio Consulting discuss the importance of the numbers in your business, and how to better understand how to come out of the COVID-19 pandemic on top.
As a developer or private equity firm, it is important to streamline your accounting and forecasting processes—particularly when there is complexity involved—in order to ensure the greatest amount of transparency across your company’s financials. This becomes more complicated (and important) when you have multiple LLCs, a complicated ownership structure, and poor communication with investors. Here are a few ways to ensure clarity in the face of complexity:
A skilled finance team provides strategic direction, sophisticated insights into the company’s financial situation, financial forecasting, growth planning, and tight control over budgets and cash flow.
However, interviewing, hiring, training, and paying full-time salaries for each of these employees can be expensive and time-consuming. Many small businesses just don’t have the resources to assemble a full-time finance team. Outsourcing can help!
As most business owners know, the team behind your bookkeeping is vital to the success of your business. Still, things can get a little complicated when it comes to understanding the roles and responsibilities of each person. In the interest of clarity, we at TGG are always interested in the numbers and transparency, let’s outline each of their roles and responsibilities.
As we look into the second quarter of 2020, the question that remains on many business owner’s minds is: will the rules outlined in AB-5 stand in the face of coronavirus? Concerns around the new criteria for worker classification outlined in Assembly Bill 5 were common at the start of the year, and many business owners chose to reclassify large portions of their workforce as W-2 wage earners rather than their previous classification of a 1099 independent contractor.
Small and medium-sized businesses have historically had challenging relationships with traditional lenders. When these business owners are in need of more cash flow, they are the least likely to be approved.
If you’re a new business owner you’re going to find it difficult to obtain a traditional loan from a bank. In most cases, any of the following could prevent you from getting a loan:
You’ve been in business for less than two years
You have a credit score below 640
You want to borrow less than 250,000
The good news is that technology in the financial sector is revolutionizing the way lending is done and big banks are no longer the only option for SMB loans. Alternative financing in the U.S has tripled in size from 2014 ($11 billion) to 2016 ($34 billion)*:
In a world that is changing more quickly than ever, businesses need a plan when things go sideways. Companies like Cisco have taken the principle of “planning ahead” seriously, ensuring that they don’t have to be worried about the effects of the Coronavirus outbreak, they can calmly implement their Pandemic Response Plan. According to the document published to their website, Cisco has “well-established processes to coordinate our efforts during outbreaks like COVID-19, including our Global Business Resiliency (GBR) and Supply Chain Incident Management (SCIM) Processes.”
Business Resiliency programs centered on surviving unprecedented crises, like the coronavirus outbreak are the exception, not the rule, especially in smaller companies. Annual reviews and “fire drills” ensure that operations do not become so reliant on existing supply chains and processes that they cannot pivot in case of a crisis. For critical business operations, larger companies conduct audits and annual exercises to make sure their resiliency plan works to mitigate disruptions.
The SBA Paycheck Protection Loan Program has changed as of today, Friday, April 3, 2020.
Matt Garrett reviews the eligibility requirements, loan terms and fund allocations required for businesses who receive these PPP loans.
You’re thinking of selling your business…now what? It can be an overwhelming process to know where to start and what buyers are going to be focusing on. Here are some pointers on where to start as you target a future exit; which revolves around planning ahead and running a financially conservative business.
Quality of Earnings Report
Historically, companies planning for an exit strategy would focus on three years of audited financial statements as the standard reporting expected by a buyer. Today, a Quality of Earnings Report is much more desirable. For either of these to be effective (or even possible) however, you need to have accurate books. With those in place your CPA can come in and give you a Quality of Earnings Report to prove beyond a doubt to a potential buyer that the financial information you are providing is correct.
Every year TGG’s Founder and CEO, Matt Garrett speaks with thousands of small business owners around the country. They ask him numerous financial and accounting questions, yet the same ones come up time and time again. These are the most frequently asked questions Matt has been asked: