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What to Know When You Can’t Hire a CFO

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About This Episode

The most important aspect of keeping your business afloat is how you manage your finances. However, not every startup and small business out there can afford to make the leap of hiring a CFO. 

 

In this masterclass episode, Tricia and LZ will dig into the question: While you’re still building your business, what tools are essential to making sure you keep your finances in order to scale your company?

1. Review your financials monthly.

Not every other month. Not quarterly. Monthly! You have to always be on top of your financial situation and know what’s going on, so you can see trends and adjust quickly if needed. Your bookkeeper or CPA can prepare the budget and run the numbers, but you need to be involved and making the decisions.

2. Don’t use a tool just because it’s “cool” or another competitor is using it.

Make sure any software or a financial tool you purchase is right for you at that moment. You don’t need all the bells and whistles, especially when starting out. You need something simple that will get the job done.

3. Never be your own bookkeeper.

And don’t hire a family member either. Bring on a professional who you can trust with your numbers – someone who will get the job done and allow you to make the decisions.

 

Why should every business have a bookkeeper?
How often do you review your financial statements? 
What are some of the software/tools you find useful and would recommend to others?
Are there any obstacles you faced in finding the right bookkeeper? If so, what were they?

Make sure the tools you’re using are right for what you're trying to do in the moment.

Lisa Zeeveld

If you're new in business, you don't need a CFO, you need a bookkeeper.

Lisa Zeeveld

You can't know if your business is growing without knowing what kind of money you're bringing in, and what kind of money is going out the door.

Lisa Zeeveld

Hang up your ego and get some help.

Lisa Zeeveld

Tricia Sciortino on Instagram and LinkedIn.

Lisa Zeeveld on Instagram and LinkedIn.

BELAY’s bookkeeper service

(02:17) Lisa talks about how she ran BELAY’s financials when they were a much smaller company – and how they knew when they first needed a CFO.

(04:52) You should not be your own bookkeeper, nor should a family member. 

(06:47) Google docs for the win when it comes to budgeting. 

(08:40) Review your financials monthly.

(11:03) Lisa talks about the tools they use for expense reporting. 

(13:34) Lisa and Tricia talk about the tools they use for bill paying. 

(17:00) Tricia summarizes all the tools they use and everything they’ve talked about in this episode. 

(18:18) Don’t let ego or embarrassment get in the way of you bringing in someone to help.

Lisa Zeeveld:

And I think sometimes when you start to look for different tools, you can be enamored by all the features and functionality. I know there are some really large expense reporting applications out there that do sound very, very sexy. But they would be more for companies that have a lot of travel. For me the lesson in there is, don’t use something just because there’s another maybe competitor that uses it, or you’ve got a friend who’s got a different business. Make sure the tool is the right size for you, and what you’re trying to do in the moment.

Speaker 2:

Welcome to One Next Step, the most practical business podcast in the world. Helping you get more done, grow your business, and lead your team with confidence with tips and tools you didn’t get in business school. Here are your hosts, Tricia Sciortino and Lisa Zeeveld.

Tricia Sciortino:

Welcome to One Next Step, the practical business podcast that helps you run your business so it stops running you. I’m Tricia.

Lisa Zeeveld:

And I’m LZ. Today we’re talking about accounting and finance when you are a new business owner. What kind of tools do you use, what numbers are you looking at, and how you can use those things to grow your business.

Tricia Sciortino:

Yeah, for so many small businesses out there there is no CFO, and there actually doesn’t need to be. So what do you do in the meantime? That’s what we’re going to talk about in this episode. What tools and processes are essential to make sure you can keep your finances in order to scale your business. And what better way to have this conversation than with our one and only CFO, Lisa Zeeveld? Host and a guest today.

Lisa Zeeveld:

That’s right.

Tricia Sciortino:

Yeah. So we’re going to take it way, way back. To the days when we were eight, ten people, small business. You were a finance manager, and we didn’t have CFOs, and we didn’t have fancy tools and technology. They just weren’t necessary. But I think it’s such great, the education from that time, what we learned and what you brought the business, as far as financial order and organization. And the processes you created really teed us up to be successful and extremely orderly with our financials today as a larger business.

Lisa Zeeveld:

Yeah.

Tricia Sciortino:

Let’s take that flashback on memory lane, and talk about what it looked like when we were a smaller business.

Lisa Zeeveld:

Yeah. I mean, I love how you tee this up, that it’s easy for a business, a small business, to think that they need a host of officers, right? And you must need a CFO because that feels like the right thing to do. And I want to start there, because in a small business you don’t. The thing do need is you need a bookkeeper. You need somebody who is going to do the day-to-day transactions, that’s most important. Because you can’t know if your business is growing without knowing what kind of money you’re bringing in, and what kind of money is going out the door.

Lisa Zeeveld:

The thing when you know you need a CFO is when you need to start making strategic decisions. For us, that was about five years into the business. Because what we needed to do was to be able to look back and look at trends, to be able to catch things before they were happening, to really understand cash flow. That our bookkeeper, at the time we were using even a CPA at a bookkeeping service, they are doing the books for a couple hundred clients. They’re not in the weeds to understand what the trends are for your business, how to get it the right kind of loan. Are there particular, for me, insurances that you should have on the docket that maybe you’re not looking at?

Lisa Zeeveld:

So I wanted us to go back really say, number one, you don’t need a CFO if you’re new in business. Or if your business is still pretty predictable, it’s not growing at the time. And we were growing at 20 and 30% each year, and so there was a lot of strategic thinking that you and I did together, honestly.

Lisa Zeeveld:

I mean, you kind of joke that you’re interviewing me, really, it’s an interview with both of us. Because at the same time we were becoming partners and strategically looking at the finances of the business, and I don’t do that by myself, I lean into you. And together we come up with those numbers.

Tricia Sciortino:

Yeah, I like how you say … I mean, first of all, first things first as a small business owner, you might be doing your own books now and you should stop.

Lisa Zeeveld:

Yes.

Tricia Sciortino:

First thing you need to do. Now, you don’t have to go hire a full-time bookkeeper on staff. I think a first great pass is a fractional bookkeeper, or like you mentioned, we used a bookkeeper through our CPA. It’s likely not a full-time job for anybody in the beginning, but being able to bring on somebody, even if it’s in a fractional capacity, to handle your bookkeeping is a great first step for a small business.

Lisa Zeeveld:

Yeah. And to your point, it should not be you and it should not be another family member. Y’all, I think I’m very talented in the world of finance and accounting, I’ve done it most of my life. Right? My mom was in this business before I was, and so I kind of grew up in finance. Bless my husband. Y’all, with his small business.

Lisa Zeeveld:

I mean, he keeps, what is a chart of accounts? And I bring him up not to embarrass him at all, but he’s always such a great reminder of what other business owners are probably feeling. He’s literally like, “I don’t even know what a chart of accounts is.” And so I think what happens is, there’s a lot of great tools out there. I love QuickBooks, I think that’s a great solution. Zero is another one, Freshbooks. And they kind of give you this template, and it makes you feel very confident that you can do this on your own.

Lisa Zeeveld:

But eventually you’re going to hand your financials to either a banker or a CPA to file your taxes. And if you don’t understand really the ins and outs of what a chart of accounts means in a debit versus a credit, I’m sorry to say it, but you’re probably going to mess it up.

Tricia Sciortino:

Yeah. And you don’t have to be the expert.

Lisa Zeeveld:

Right, right.

Tricia Sciortino:

In all those things, you’re the expert in whatever your business is.

Lisa Zeeveld:

Right.

Tricia Sciortino:

That’s what you’re the expert at.

Lisa Zeeveld:

Yeah. And so it’s worth carving out a few hundred dollars, depending upon the size of your business, to have somebody else’s oversight on that. I promise you the money that you will save in mistakes and the ability to grow your business will pay for that few hundred dollars each month tenfold.

Tricia Sciortino:

Yeah, and the peace of mind that you have an expert doing it, instead of you makeshift pretending you know what you’re doing. So peace of mind in somebody else’s hands, fractional, done the right way with a bookkeeper. Using QuickBooks to your recommendation, excellent tool for you and or your bookkeeper, so that’s a great place to start.

Tricia Sciortino:

And then if we look at what else, what about, I remember these days, but budgets.

Lisa Zeeveld:

Oh, yeah.

Tricia Sciortino:

God bless Google Docs and spreadsheets.

Lisa Zeeveld:

I know.

Tricia Sciortino:

That’s all you need, is a spreadsheet.

Lisa Zeeveld:

That’s all you need. I mean, I’m going to call us out here. But I mean, even Microsoft Office was too expensive for us in the day, and so we were, we still do today, we are a Google suite company. And we were able to buy the smallest package, and take advantage of Google sheets. And we had a lot of sheets that were talking to each other.

Lisa Zeeveld:

So for those of you out there listening, you can imagine tab one was the summary, tab two was the owner’s budget, tab two or three after that might be marketing. And each department had a tab. And today we use a kind of a glorified version of that. We just have a little bit more money to spend on technology. And the thing is, as we were growing and we had more leaders, what would happen is that there was a more of a chance of something going wrong, the formula not being right.

Lisa Zeeveld:

And so that’s when we really knew, when we got to probably, gosh, maybe eight to 10 leaders who had their own insight into that, that, eh, too many hands. Or let’s go to a more expensive option.

Lisa Zeeveld:

But yeah, I mean, I’m a little bit surprised when I hear how many businesses, no matter the size, you guys hear this from me, you need a budget and you need to have a very detailed budget. Just don’t think, hey, I’ve got $500 I’m going to spend on food. Well, what are you going to spend it on? Like get a little bit more detailed in that.

Lisa Zeeveld:

So I highly recommend start with, if you’re an Excel fan, use Excel. If you’re looking for something that’s more affordable, perhaps you have Google Suite and can lean into sheets. And then update it. Every month, and yes you should be filing, getting your financials monthly, and review them monthly. Please don’t be that person who comes to me and says, you only review your financials quarterly. I can’t think of anything worse than that.

Tricia Sciortino:

Just bad business, just bad business.

Lisa Zeeveld:

But yeah. Have your bookkeeper update your budget after each month. And so you can trend-follow where your business is going when you put in your actuals. Because it’s a huge, huge savings. And again, you really can’t control what you don’t know about. Right? Inspect what you expect. And that’s a great way to do that. And it’s very affordable using Google Sheets to do so.

Tricia Sciortino:

Yeah, absolutely. And it’s crazy to think 10 years ago we were using Spreadsheets, Google Sheet, Excel. And we still are today, 10 years later, at the size we are. It’s just an extremely effective way to track budgets. And especially with Google Sheets, to make iterations that multiple people can kind of add value or commentary into without having to worry about overriding changes and things like that.

Tricia Sciortino:

So Google Sheets and budgets are, in my opinion, very user friendly.

Tricia Sciortino:

If you are anything like me, then keeping up with the daily tasks of AR, AP, and account reconciliation are not your favorite things. But you also know how necessary and important it is. The good news is, it doesn’t have to be your thing anymore. Belay can help.

Lisa Zeeveld:

Numbers are totally my thing, Tricia, and thankfully are Belay Bookkeepers thing too. Our sponsor, Belay, believes you deserve top notch bookkeepers to produce balance sheets, pay bills, reconcile bank and credit card statements, and monthly reports to keep you up to date on the numbers of your organization.

Lisa Zeeveld:

Whether you’re a church, non-profit, or a business, they have the right people ready to help. Talk to their team today, and never lose sleep over your financials again. Get started by visiting belaysolutions.com/services/bookkeepers today.

Lisa Zeeveld:

You need a good forecasting, budgeting tool use Google Sheets. And then the next thing that makes me think about is expense reporting.

Tricia Sciortino:

I was just going to ask you about that one. We have two awesome other tools we use that I would highly recommend. So, expense reporting.

Lisa Zeeveld:

Yeah, expense reporting. But I will say in the beginning, we didn’t have fancy expense reports either. You know, they were also created out of Google Sheet. It was a form, and basically you had to submit it.

Lisa Zeeveld:

But now for several, several years, we’ve used Expensify, and we’ve really enjoyed using them. It’s streamlined, again, cost effective. I think you and I are just cut from a different cloth, where it’s really hard for us to go spend money.

Tricia Sciortino:

Oh yeah, we have a very frugal mindset. Who wants to waste money on something that’s not adding absolutely tremendous value? Or don’t fix what’s not broke.

Lisa Zeeveld:

Right.

Tricia Sciortino:

How does that phrase go? If it’s not broken. But Expensify has been amazing, especially as we’ve grown and have had credit card users, and non-management credit card users, and tracking expenses for submission from different team members throughout the organization. Expensify is a great, great tool. And not super costly, but effective.

Lisa Zeeveld:

No, yeah. And I think sometimes when you start to look for different tools, you can be enamored by all the features and functionality. I know there’s some really large, expense reporting applications out there that do sound very, very sexy. But they would be more for companies that have a lot of travel, because they kind of connect all that.

Lisa Zeeveld:

And I think there’s a time and a place for that. We just, our team just doesn’t travel that much. We have very few people who travel. And so, although they’re sexy and I know that a lot of the big, big companies use them, it’s just not right for us.

Lisa Zeeveld:

And so I think that any tool you’re looking at, whether it’s finance or not, make sure that you’re just not enamored by the idea that you could use a particular tool. I’m just going to throw it out. Our CRM, for years and years we used a different CRM. Right now Salesforce is pretty sexy.

Lisa Zeeveld:

And I remember us wanting Salesforce so bad, but we honestly couldn’t afford it. And we had to wait until we were the right size to do that. And so I think for me, the lesson in there is don’t use something just because there’s another maybe competitor that uses it, or you’ve got a friend who’s got a different business. Make sure the tool is the right size for you, and what you’re trying to do in the moment.

Tricia Sciortino:

Right, that’s what I was saying. Small business, sometimes you just don’t need the bells and whistles. You just need what’s going to get the job done.

Lisa Zeeveld:

Yeah.

Tricia Sciortino:

You don’t need fancy, yes.

Lisa Zeeveld:

No.

Tricia Sciortino:

The other thing that comes to mind, which I think is we use it probably in a unique fashion, but I think that other people potentially could find great value in bill.com.

Lisa Zeeveld:

Yeah. Bill pay. The thing that I like about bill.com is yes, it’s a bill paying system. And probably listeners right now are going, yeah, but through my bank I also have a bill payment system. Great tools, I love them personally. I use my bill pay system.

Tricia Sciortino:

Same.

Lisa Zeeveld:

Through my bank.

Tricia Sciortino:

Personally, I pay all my bills online. Yep.

Lisa Zeeveld:

Yes, yes. But we want you to delegate your bill paying, and we don’t want it to be somebody in your own household or you. And the thing with a lot of those bill payment systems is they don’t have the security measures that we would like for you to have. And bill.com has been a great partner for us over the years. And so we’ve really been able to work with them to find great additions to security so that you can have some peace of mind, rest at night knowing that you can have somebody outside of your own network and family paying your bills for you, but they don’t have direct access to your access bank account. Right?

Tricia Sciortino:

That’s right.

Lisa Zeeveld:

There’s lots of approval processes set up, so they can’t just decide to pay themselves. Things like that. So hands down, I would recommend bill.com all day long. And no, we don’t even get a kickback for me to say that. This is all, guys, this is just…

Tricia Sciortino:

We just think they’re awesome.

Lisa Zeeveld:

We just think they’re awesome.

Tricia Sciortino:

We just think they’re great.

Lisa Zeeveld:

Yeah.

Tricia Sciortino:

Yeah, cost effective, great security.

Lisa Zeeveld:

Totally. Totally, totally, totally. And it’s all transaction-based. So again, it’s affordable. The things we’re talking to you about today, depending upon if you’re going to have a bookkeeper do this, and a lot of times even bookkeepers here at Belay, there’s not that additional software charges sometimes that get layered in there.

Lisa Zeeveld:

But I mean, we’re talking, you could be set up for under $500 a month to have somebody really look at your financials. On a low-transaction based business, right? Because it is transaction-based.

Lisa Zeeveld:

But again, you are going to get that back tenfold. So all these tools are very, very cost effective. They are easy enough that yes, you could probably figure them out, but it’s kind of like watching HGTV.

Tricia Sciortino:

Some things are DIY and some things are not?

Lisa Zeeveld:

Right, yeah. I’m going to say even a velocity for those out there, my motorheads out there who are listening, you’re going, well, Velocity told me that I could take out my transmission and do it in an afternoon, because you now think you’re a shadetree mechanic, no.

Lisa Zeeveld:

And HGTV, this is one of my favorite stories. Tricia, when you and I lived in the same neighborhood, I watched HGTV and they replaced the trim, the molding in the house, and they did it in the afternoon. They went from a shorter one to a taller one because that was the cool new thing. And again I thought, we should just be able to do that in an afternoon. Six months later it was still not done in my house. It only got done when I went to sell my house.

Tricia Sciortino:

When it needed to be done.

Lisa Zeeveld:

It needed to be done. So I feel like accounting is the same way. We get duped into thinking that it was…

Tricia Sciortino:

Duped.

Lisa Zeeveld:

Duped.

Tricia Sciortino:

It’s a great word.

Lisa Zeeveld:

Duped into thinking that it’s easy enough.

Tricia Sciortino:

It’s easy!

Lisa Zeeveld:

And we can do it.

Tricia Sciortino:

You can do it.

Lisa Zeeveld:

But leaning into somebody else who’s gifted in that really make all the difference in the world. So these are some great tools that they can lean into.

Tricia Sciortino:

Yes, yeah. This is great.

Tricia Sciortino:

So in summary for a small business startup, you’re just getting going. Excel or Google Sheets, great place to work your budgets in. Very cost-effective, easy for you.

Tricia Sciortino:

QuickBooks always is a great tool for, there’s other great accounting software out there, but QuickBooks is a great one that we use and recommend. Get yourself a bookkeeper, fractionally is probably all you need to find somebody, a few hours a week to take care of all those things for you.

Tricia Sciortino:

Expensify or an expense reporting system, and it might even be to your point, a form submission. But create some kind of process there. If you’re not ready for a tool, just have a process in place, that’s what worked best for us, pre-tool. Is just knowing what the steps were that everybody needed to follow so that when we grew, all of that was already baked into everything.

Tricia Sciortino:

And then consider a bill pay system like bill.com, which also very cost effective. And you put all those things together and you have yourself a great little accounting package for an awesome small business.

Lisa Zeeveld:

Yeah, totally. And I think that’s so often what we find is that, when we talk about leveraging a virtual assistant, I think a lot of people feel a little embarrassed. Because they do have a small business, and maybe they’re just trying to get it off the ground and they don’t think they’re making enough money. Or, what would somebody say if they came in here and looked at my finances, right? Maybe there’s some things in there that you’re not sure if it should really be part of your business, or that should really be part of something that’s more personal.

Lisa Zeeveld:

Hang up your ego and get some help. Because the bookkeeper, what they’re going to be able to do is start helping you. Even if it’s not strategically thinking through things, they’ll be able to give you a different insight to your finances that you don’t have because you’re not gifted at that. And they’ll be able to help you start building some trends, and the insight to those trends is what’s going to take you from being a small business to a medium-sized business. Because that’s when you can do some great forecasting from there to know where you should be pouring more of your time and efforts into, to grow the business. So, yeah.

Tricia Sciortino:

Yeah. And what’s great about all of this is everything is scalable. So you might start with a bookkeeper depending on where you’re at, eventually you might have a finance manager.

Lisa Zeeveld:

Right.

Tricia Sciortino:

Then eventually you might have some clerks, then eventually you might have a director of finance, and then one day you have yourself, a CFO like we do here at Belay. So thank you, LZ.

Lisa Zeeveld:

You are so welcome. You’re so welcome. It was great. And like I said, I can’t do my job without you. So it takes a great team in order to make all this happen. And you continue to be a great partner for me, so thank you.

Tricia Sciortino:

Thank you.

Lisa Zeeveld:

Yeah. All right guys. Well, we have a download for you so that you can take your one next step.

Tricia Sciortino:

Yes, guys. So text the phrase, “one next step” to the 31996, or visit onenextsteppodcast.com, and we’ll get you access to today’s resource to help you keep moving forward.

Tricia Sciortino:

Thank you for joining us today. We’ll see you next week for another episode of The One Next Step.

Lisa Zeeveld:

Start by making today count.

Lisa Zeeveld:

Next week joining us is our very good friend, Brooke Cecil, the Director of Client Relations at BELAY. She’s going to talk to us about how to get started with hiring a remote bookkeeper and becoming better at managing your money. Now this is a huge issue for so many entrepreneurs so you definitely don’t want to miss it. Here’s a brief preview….

Lisa Zeeveld:

And the IRS is not very nice in their approach if you wait to long.

Brooke Cecil:

No they are not.

Lisa Zeeveld:

They have a heavy hand.

Brooke Cecil:

They do. And we want you to be able to keep your lights on too, or your cell phone. So lets make sure we’re getting those bills paid as well.

Speaker 2:

Thanks for listening to One Next Step. Be sure to subscribe on Apple Podcasts or follow us on Spotify. Then join us next time for more practical business tips and tools to help you get more done, grow your business, and lead your team with confidence. For more episodes, show notes, and helpful resources, visit onenextsteppodcast.com.

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