by Chris Sing, CPA, CGMA, MBA
Among the myriad entrepreneurial companies our advisors have helped to grow, sell, or assist in a strategic exit, there are some universal truths: Not a single one launched their startup because they love accounting. Or navigating new tax laws. Or ferreting out under-the-radar tax breaks to ensure ACA law compliance.
These organizations also didn’t go into business because of their interest in fending off and developing a response plan in case of cyberattack, or — hard to believe — spending countless hours researching, comparing, and testing various ERP systems to find one that meets their specific, current, and projected future needs.
Shocking? No, of course not.
As is likely the case with your construction business, every business begins with a great idea. But the reality is, even with substantial financial backing, it won’t matter how exceptional the idea if you or your leadership team lack the time, expertise, or manpower to stay on top of the foundational aspects of running, protecting, and growing that business.
So how do you know what you don’t know? Finally, some good news: You don’t have to.
Rather than spending time you don’t have delving into the countless details of what is or isn’t happening within your organization, we recommend leaders who fear or even sense their company might be missing out focus first on two back-office services critical to a company’s stability and growth: accounting and finance management.
Perhaps you have a bookkeeper. Maybe an accountant. If you’re lucky, a small team of them, plus a CFO. Whether you have — or are — all of the above, what’s the bandwidth? Other key questions to ask:
- Is each role operating efficiently and effectively?
- Is there a succession plan in place if you lose key financial team members? Do they have the tools and technology necessary to do so? (Hint: if they’re still paying bills manually, they don’t.)
- Are you or they keeping pace with the ever-changing federal, state, and local tax regulations regarding payroll and income taxes?
- If eligible, was your company quick to apply and take advantage of the Payroll Protection Program before it initially ended in May 2021?
- If you have employees and experienced a loss of revenue or business disruption between March 2020 and the third quarter of 2021, have you gone after the Employee Retention Tax Credit?
Asking yourself or your team these questions is important. But you’ll reveal a significant need if you ask only this: If I, my investors, lenders, or a governmental entity needed a clear picture of my company’s financial position right now, how quickly could we deliver it?
Truth be told, if your company’s financial statements aren’t up to date, whatever money they say you have in the bank is meaningless because you really don’t know where your business stands, whether it’s profitable or not, and how last month or maybe even your last year went.
In short, if you’re lacking the quantitative financial information and capabilities critical to understanding what’s happening in your company today, you won’t be able to make the informed business decisions necessary to guide its trajectory into the future.
Sound overwhelming, expensive, or extensive? It doesn’t need to be.
Once you’ve recognized that something’s not right — and rest assured, neither you nor your leadership team need to pinpoint precisely what or why — bring in outside expertise to assess your company’s financial situation. An experienced, objective third party that has worked with countless businesses just like yours can determine where and when your team could benefit most from support.
Many companies fear outsourcing back-office operations means displacing employees. At Rehmann, for example, where our mission is people first, our intention is not to supplant your employees but to complement them. That means taking on tasks employees are struggling with, showing them better or faster ways to do things, and arming them with the innovative training, tools, and support they need to excel.
A third party, one that offers a deep bench of expertise in arenas that go well beyond tax and accounting solutions — technology infrastructure and cybersecurity; employment law compliance and coaching; and strategy and succession planning — can deliver tailored, not one-size-fits-all, solutions to the challenges you and your team are facing.
Outsourcing relationships needn’t be multi-year at the outset either; our intent with these partnerships, for example, is to identify where you need help, design solutions that suit your specific needs, and to provide value for however long you need us.
As a leader, you don’t need to have all the right answers. You simply need to follow your instincts and ask the right questions.
Chris Sing, a principal at Rehmann, has over 25 years of experience in public accounting at local and national firms, as well as executive experience in private industry. Chris serves as a close confidante and trusted advisor to her clients. She especially enjoys steering emerging companies through rapid stages of growth and partners closely with her clients through their critical milestones and transactions. You can connect with her at email@example.com and learn more about the firm’s finance and accounting solutions at rehmann.com.