How Remote Leaders Can Avoid Getting Blindsided
Life in entrepreneurial world is fast-paced and complex. We have a lot of irons in the fire and most of us strive to be in control of all happenings. Yet with companies in growth mode this simply is not possible; some areas have to be on automatic pilot. The back office is one of those areas. Nothing can derail a strategy faster than a surprise from the administrative “hub.” (Oops, cash problem! Oops, we missed a tax deadline! Oops, we are missing significant funds!) The list of potential blindsides is endless. So how do we achieve this kind of mind peace?
Over the next several weeks, I plan to address the components needed for office best practices and a culture of efficiency.
The Office Manager
It starts here. Three attributes of an office manager are a must:
A self-managing professional. If he/she is coming to you for most decisions they are either unqualified or you are a micro manager. You know as well as I do that our job is to focus on business-building and not running the admin.
High integrity. At the risk of stating the obvious, if there is one person for trustworthy, it is the one holding the keys to the checkbook. Here is a litmus test: will they lie for you? “The check is in the mail” “Oh sorry, he is not in the office (even when you are)”. A person of high integrity will not do this nor will they cut corners, or compromise on your behalf. Yes you need a stalwart at the helm here willing to pushback for all the right reasons. Don’t test them, cherish them; they will save your bacon someday!
Accounting aptitude (or accountant depending on the company size). Most small to mid-sized companies don’t need an accountant on staff unless complexity demands it. A person with the capacity to learn and follow principles could be your best bet and perhaps most efficient. Applaud when your growth demands you hire a controller, you have reached a new milestone.
The Bookkeeping Process
Timing and simplicity is what counts. The financial reports provide the most critical metrics for any company. Here is a checklist:
The system. QuickBooks works just fine for most companies with plenty of certified help at many CPA firms. Some accountants steer clients into a more complex system to avoid cheating by the users. Personally, as an accountant myself, I like QuickBooks. Yes, it is easy to correct mistakes with a less-savvy audit trail but it is easy to use and provides all the reports most growing businesses need for financial snapshots. Our company has both QuickBooks Enterprise and QuickBooks online. The Enterprise version has all the components any company could want if needed for complex operations (international business for example). My company uses QuickBooks online with no problems over several years.
Real time recording. Credit card charges and other offline transactions should be recorded as near real time possible. If you are waiting for the statement(s) to arrive before recording transactions, you will never be looking at accurate financial reports. Knowing where you stand at the end of any given day gives confidence in the reporting.
Cost saving opportunities. The office manager should have an eye for cost saving opportunities in the controllable section of the reports. It is easy over time for ongoing expenses to creep in and perhaps no longer needed. A little detective work could result in real savings. Remember, funds saved here move right to the bottom line!
Payables. Nothing will bring goodwill to your company faster than rapid payment of invoices. Forget the 30-day wait as a policy. Pay the bills when they come in. It’s good practice. On the other hand nothing can harm your reputation on the street faster than continued late payments. The larger firms like to mistreat us smaller guys with 60+ day wait periods in order to do business with other company’s money. That is immoral. Growing small to mid-sized companies need to be above that.
Cash flow tracking. One of the biggest crises my company has faced to date was the one when we ran completely out of cash. I wasn’t watching. We got through it and learned tremendous lessons. As Dave Ramsey says, “Cash is King”. Projecting cash availability 7, 30, and 60 days out is not difficult. Just watch it and insist your office manager sound the alarm when the checkbook is close to running on fumes.
Inventory. Well, we don’t have to worry about that at Edoc. If you do, make sure you know what’s there and what is needed and track your turnover ratios.
I have a lot more to say on this topic so watch for future posts helping to keep our heads out of the sand.
