Why every small business needs a financial administrative department February 6th, 2018
Why every small business needs a financial administrative department
As a small business or a startup owner, you are most likely in need of organisational help, especially in the finance and administrative departments. It can be difficult to juggle everything at once, which is why having a separate financial administrative department is vital to the smooth functioning of your business.
If you are dubious about hiring someone to handle your financial department, outlined below are some of the core reasons why you should reconsider this stance.
They budget and forecast successfully
Because your executive secretary financial professional is highly trained in financial issues, they are able to successfully and correctly create and forecast budgets. Having knowledge of your company’s raw material requirements, personnel and staffing demands, and expansion requirements allow them to calculate budgets accurately and forecast how the upcoming year will fare.
It can be difficult as a small business owner to accurately forecast their financial situation while trying to handle the other important aspects of a business. This is why a financial administrative department is so vital, because they relieve the stress on the owner and allow them to focus on growing their business and brand identity to new heights. Having sound financial advice also gives you an edge on the competition, as you will be able to budget successfully for new purchases or ventures.
They can deal with investors
Once your small business begins to grow, you may want to start looking into taking investors on board, or even a business partner. Concentrating on your growing business while also trying to secure investors can be time-consuming and difficult. It is best left to someone who has financial training, as they are able to keep investors up-to-date with relevant information about their investment.
Not only will having a financial officer save you from having to make time for investor meetings, your investors will respect your business more if you have a financial department. It will show them that you take your business seriously and are not a high-risk venture. Your financial officer will be able to accurately forecast performance for any potential investors or partners, making it more likely to be a successful meeting.
They can make loan approval easier
Securing finance for startups and small businesses is notoriously difficult. Having a financial officer in your corner can help to make the loan application and approval process much easier and more efficient. This department will deal with banks for you, and make the difficult decisions using their highly intuitive knowledge of financial issues.
Your financial officer will help to improve your business’s finance reports and overall performance, making loan approval more likely from your chosen bank. Day-to-day financial management is crucial to the smooth running of a business, and your financial department will ensure this takes place, which is a positive step towards a successful loan application.
They can prepare you for due diligence
At some point in the lifespan of a small business, making an acquisition or being acquired becomes an option. This means that you will have to perform due diligence, a process which can be difficult for those with little financial knowledge.
Hiring a financial officer or having a financial department means that this process will be performed accurately and thoroughly. Your financial officer will spend time analysing the market for potential acquisitions or potential acquirers, ensuring that your business’s books will stand up to any due diligence that may be necessary. An acquisition can quickly break down if you do not provide the correct data, therefore a financial expert is an essential party for this type of transaction.
They provide accurate business reports
You may feel that, as the owner and creator of your small business, you know your costs and expenses like the back of your hand. However, having to deal with everyday issues as well as drafting precise and thorough business reports can prove daunting, leading to possible inaccuracies in the reports.
This is where having a financial department can help immensely. If you are applying for a loan or securing investors, you will need to have a business report that accurately shows your business’s costs, expenditures and performance. Investors and banks often look at data forecasting and budgeting before making a decision, so it is essential to provide them with clear, concise reports that show the relevant information.
Any small business owner who wants to be successful needs to have a sound financial department, with a highly trained executive secretary financial professional to hand. If you are unable to manage your finance successfully, you will most likely not reach your highest potential and may even have to close. It is wise to consider hiring a financial officer regardless of whether you are starting out or are already established.