Warning! Your Business Financial Systems Need an Upgrade

Your financial systems form the foundation of your business intelligence. When these systems aren't robust, you're making critical decisions on shaky ground. Let's look at some clear warning signs that your current bookkeeping situation isn't serving your business properly.
 

RED FLAGS THAT SHOULD PROMPT IMMEDIATE ACTION

Financial systems don't usually collapse overnight. Instead, they deteriorate gradually, with warning signs appearing along the way. Here are key indicators that should trigger immediate concern:

Consistently Late Financial Reports: Your monthly reports should be available within 15 days after month-end. If your bookkeeper regularly delivers reports weeks after the end of the month, you're making decisions with outdated information. This delay might indicate your bookkeeper is overwhelmed, disorganized, or simply not prioritizing your business.

Unexplained Discrepancies: Do bank reconciliations show mysterious adjustments with no clear explanation? Are there consistent discrepancies between your financial reports and your actual bank balance? These issues suggest either incompetence or, worse, potential financial impropriety.

Lack of Proactive Communication: A good bookkeeper doesn't just record transactions—they alert you to potential problems. If your bookkeeper never points out unusual expenses, potential cash flow issues, or tax-saving opportunities, they're functioning as a data entry clerk rather than a valuable financial partner.

Tax Surprises: If you're constantly surprised by your tax liabilities or missing deductions you should have qualified for, your bookkeeper isn't properly planning or communicating throughout the year. Tax planning should be proactive, not reactive.

Inability to Answer Basic Questions: When you ask questions about your financials, your bookkeeper should provide clear, concise answers. If they become defensive, give confusing explanations, or can't explain basic financial concepts in terms you understand, this is a major red flag.

Modern accounting has evolved dramatically with cloud-based solutions and automation. If your bookkeeper insists on manual processes or outdated software despite better alternatives, they might be holding your business back.

Any one of these warning signs might be manageable, but multiple red flags suggest it's time to seriously reconsider your current bookkeeping relationship. The question becomes: how do you transition to better financial systems without creating chaos?

Building Stronger Financial Foundations
Upgrading your financial systems isn't just about finding a new bookkeeper—it's about creating robust processes that provide accurate, timely information for better decision-making. Here's how to approach this transformation:

Define Your Needs: Before making any changes, get clear on what you need from your financial systems. Do you need better cash flow forecasting? More detailed expense categorization? Faster monthly closings? Understanding your specific requirements will help you find the right solution. 

Consider a Hybrid Approach: Modern financial management often combines human expertise with powerful software. Cloud-based accounting solutions like QuickBooks Online, Xero, or FreshBooks can automate many routine tasks while providing real-time financial insights. This automation allows your financial professional to focus on analysis and strategy rather than data entry.

Invest in Financial Education: As a business owner, you don't need to become an accountant, but you should understand financial basics. Investing in your financial literacy will help you evaluate your bookkeeper's performance and make better use of the information they provide. If need more financial education you can trust, let me know and I can point you toward the resources that have helped me the most - and even may be able to gift you some resources that I invested a lot to learn from. 

Create Documentation: Ensure all financial processes are documented. This documentation serves two purposes: it clarifies expectations for your current team and provides a roadmap for transition if you decide to make changes.

Consider a Higher-Level Professional: Sometimes the issue isn't just your bookkeeper but the level of financial expertise your business now requires. As companies grow, many benefit from moving beyond basic bookkeeping to working with a controller or fractional CFO who can provide strategic financial guidance.

Meet with Your Advisor on a Monthly Basis for a Financial Review.  It’s important to stay on top of your finances on a consistent basis, and so you should have a standing meeting on your calendar with your bookkeeper or financial team. As a Personal Family Lawyer®, I can support you with this.

With these foundations in place, you'll be better positioned to evaluate your current bookkeeping situation objectively and make necessary changes without disrupting your business operations.

The Advisor You Need When Change Is Necessary

As your trusted Personal Family Lawyer®, I understand that comprehensive financial systems are crucial to your business. That's why I offer the comprehensive LIFT™ Business Planning Session, where we'll analyze your current business systems - including your financial systems - and identify opportunities for improvement. Together, we'll develop a plan to strengthen your foundational systems, including finding the right financial professionals to support your growth. With solid systems in place, you can make confident decisions based on accurate, timely information.

Book a 15-min free call today to start your journey toward a more successful, well-protected, and scalable business.

This article is a service of Sky Unlimited Legal Advisory PC, Personal Family Lawyer® .  We're not your traditional law firm, we stand apart from the rest by helping you make informed and empowered decisions on how to deal with your business throughout life and in the event of an emergency. We offer a complete spectrum of legal services, including a New Business Planning Session or an Existing Business Review Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. You can begin by calling our office at (650) 761-0992 today or book online to schedule a Business Planning Session and mention this article to find out how to get this $950 session at no charge.