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Most people I know love to read stories about entrepreneurs[...]
There’s a disturbing trend we’re seeing more of these days – the start-up company with significant investor backing that decides to hire a CFO.
In order to save money, and since it really shouldn’t be that difficult, that person also gets tasked with doing the bookkeeping.
And that’s where the problems start. It is very rare to find a CFO who is knowledgeable and comfortable with doing bookkeeping since it requires a completely different skill set and training.
When money is tight, as it always is for a start-up, it would better to find a part-time CFO and outsource the bookkeeping. That way you ensure that you are getting the right skill set for the right job.
This will save a lot of time and money down the road.
“We have a full-time bookkeeper who just got a new job. Everything is up-to-date and at the accountants for our year end”
Music to our ears or so we thought.
We often take over from in-house bookkeepers or freelance bookkeepers so we’re used to seeing files done differently than the way we do things, but this was amongst the worst.
The day the bookkeeper left for good, someone at the office went through her filing cabinet and discovered thousands of dollars that had been paid in penalties and interest for overdue remittances to the government.
And that was just the beginning. Bluntly speaking, the file was a mess. Multiple bank accounts with negative balances that no longer existed. HST a complete mess, unknown investment account etc.
We understand the appeal of a full-time in-house bookkeeper, but if it means you stop paying attention to the financial aspects of your business, then it can be a very dangerous thing.
There is no substitute for personally understanding the numbers of your business.