CEOs Do Not Need To Be CFOs
Entrepreneur Magazine published an article last year entitled “Why Accounting Skills Are Indispensable for Entrepreneurs.” The premise behind it is that entrepreneurs should learn – and do – every single aspect of their business to be successful. This includes everything from accounting and finance to negotiations and communications.
The thing is, while these skills are often helpful, they’re not essential for everyone. As multi-talented as entrepreneurs are, trying to juggle every aspect of their business at once is often counterproductive; In other words, Entrepreneur got it completely wrong!
Why you would ask? Because expecting one person to do everything, and to do it well, can lead to common problems like burnout, inefficiencies in the business, unnecessary stress, and stagnant growth. Entrepreneurs (like yourself) should spend their time focusing on what only they can do. For everything else, from accounting to marketing, it’s far wiser to form strategic partnerships, hire people, and outsource the work. Here’s the truth about what Entrepreneur Magazine got wrong; as an entrepreneur, you have to be the master of one and not just the jack of all trades.
Entrepreneurs Don’t Need Accounting Skills, They Need Access To Them
Despite what Entrepreneur Magazine says, accounting skills are not indispensable for entrepreneurs and CEOs. If you’ve already got them, good for you, and of course, understanding your business’ overall income, assets, and expenses doesn’t hurt. But even if you have the skills, trying to focus on too many things at once, just isn’t going to work, you’ll let key things slip through the cracks.
That’s where outsourcing comes in, specifically for accounting.
Outsourcing, if you don’t already know, is the practice of hiring a person or group from outside the company to do certain internal tasks. Since someone else is handling these tasks, the business owner can focus on things that need to be handled in-house. Plus, outsourcing usually costs less because these external organizations specialize in a particular activity and thus will have multiple clients, giving them the benefit of economies of scale. This lets them work at a lower price.
There are real advantages to working with an external team. With a reliable outsourcing partner, you can:
- Guarantee better service and gain access to more resources than you might have internally.
- Focus on more relevant or pressing tasks in your business that only you can do.
- Have peace of mind knowing your outsourced work is being handled by dedicated experts who, unlike many internal teams, are often more versatile and knowledgeable of current industry trends to stay successful.
- Start – or continue – scaling your company without the distraction of the tasks you’ve outsourced.
- One of their superpowers is telling truth to power, which isn’t always the case internally.
When it comes to outsourcing your accounting needs, there are also other irrefutable benefits. It means keeping your financial records and books more accurate, for one thing, which can pay off in the long run. It also means you don’t have to worry about payroll or other bookkeeping tasks.
Outsourcing your accounting brings in an outside perspective which helps you identify weak points that you might have otherwise overlooked. It will also lighten the workload so you don’t end up overwhelmed and can concentrate on what really matters for your business’ success. Plus, by outsourcing your accounting needs to a company like Keep Financials, you can relax knowing you have a dedicated team working to create customized solutions for your accounting needs.
Do Entrepreneurs Need Financial Mastery to be Successful?
First, a word from our sponsor.
Accounting and Finance often get confused; think of them this way. Finance is strategy, future focus, and analysis. Accounting is accurately recording what’s already happened, balancing your bank accounts, prep for taxes.
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If Entrepreneur Magazine is to be believed, you as an entrepreneur or CEO should be a financial wizard. But the truth is, your business can be far more successful simply by delegating those tasks to people who can honestly do them better.
Unfortunately, a lot of entrepreneurs and CEOs get caught up in the idea that they should be the master of everything. But to run a successful business, you need to be able to work alongside others.
One of the most important skills a business owner can have is the ability to prioritize what matters. Don’t forget what your goals are, why you started your business in the first place, and what you set out to offer. Focusing on this can help your business soar while burdening yourself with things like accounting or finance can stunt its growth.
Ultimately, leaving certain tasks – like accounting or finance – to the professionals lets you better manage your business. As an added benefit, it can keep you from overworking yourself while showing others you’re a confident leader.
What You Really Need From Your Accounting Team To Make Decisions?
So, what do you actually need to focus on when it comes to your accounting team?
Well, being able to communicate and collaborate with your internal teams or departments can get you better results than if you work alone. But when it comes to your accounting needs, what you really need is for it to be delivered on time, without hassle, and in a way, you can easily understand. If you outsource your accounting needs, the external team will be doing all of this and more. On top of that, they will be able to do it better and cheaper than if you were to try to do it yourself or with an internal team.
Where Should You Focus Your Energy?
Now, you might be wondering where exactly your energy should be focused. Ideally, you should be able to collaborate and communicate well with those in your core team. That way, you can solve common problems together and further your vision for your business.
By building up a solid partnership and transparent communication with the right people, you can create something greater, more valuable, and even more efficient. Plus, if you’re working effectively with your team, you can establish trust that will contribute to your business’ longevity.
We have already established that is easy for entrepreneurs to get bogged by all the accounting and financial tasks. Outsourcing this aspect of your business can help prevent this problem. Besides, a team of expert accountants will keep you and your team members informed about your current financial situation. You can use the accounting data to strategically plan your growth.
Benefit From The Guidance Offered By The Accounting Team
Trained accountants are responsible for many tasks. They communicate with different departments – internal and external, compile key financial information about your business, and monitor your records.
If you outsource your accounting, you won’t have to constantly keep tabs on the team. They’ll keep you up to date on anything major in your business. And they’ll help you make smart decisions that will boost your business’s profitability.
The thing is, an outsourced accounting team is also more likely going to want you to succeed. For one thing, you’re paying them to do a job, so chances are they’ll want to do it well. For another, the more successful your business is, the more you can mutually benefit each other.
Save Costs, Lower Your Overhead
Whatever stage of business you’re at, there’s always room to cut down on costs and save money. With an outsourced accounting company, you won’t have to pay much in the way of overheads. That means no office space, no supplies, and so forth. You also won’t need to worry about benefits packages since you’re paying for a specific service and the outsourced team will not be on your payroll.
Every organization is different. But with the right accounting professional or team, you can get exactly what you need at a price point that works for you.
Scaling a business is challenging enough without having to worry about having synergy with every external or outsourced team. Taking on accounting tasks won’t make this any easier.
It’s important to create a business map that clearly indicates the short-term and long-term goals of your company. This could be anything from innovating your products to perfecting your services. It could also include forming the right team of professionals to help you achieve these goals.
At some point in every successful business, it becomes necessary to bring on people to assist you or to outsource certain tasks like accounting. Doing this can lighten your load and ensure your company continues to do well. As your business continues to grow and become more autonomous, you can start focusing on other ways to scale or branch out.
Contrary to the Entrepreneur Magazine’s Opinion, You Do Not Need To Be An Accounting Wizard To Be Successful
The idea of being able to handle everything yourself might seem great in principle. But it can be extremely exhausting in practice, not to mention time-consuming and expensive.
By working with reliable partners and teams, you’re essentially ensuring that everyone involved is focusing on what they should be doing.
While knowing it all has been glorified for entrepreneurs, you do not need to know it all to grow. Entrepreneur Magazine got it wrong. There is no need for entrepreneurs and CEOs to be accounting wizards. As a CEO or entrepreneur, learning to delegate tasks is a far more valuable skill than bookkeeping. For those things that are weighing your business down, like accounting or other financial services, outsourcing might be the better option.
Photo by Michal Matlon