If your financial setup is frustrating you, then you could notice the following warning signs:
- Finance says ‘no’ rather than telling you ‘how’
- You have more accounting staff in the business than you have salespeople.
- Monthly management accounts take three weeks or longer to be available
- You cannot update your forecast quickly to support decision-making
- You don’t know the margin on different activities, products, or projects
- You have a cash flow surprise.
As businesses grow, their finance needs develop, and common warning signs for earlier-stage to later-stage businesses can be summarised below:
| For scaling businesses | For growth businesses |
| – You only have one salary cost line. – You only prepare accounts for VAT, corporation tax, or annual accounts – You don’t understand your own monthly management accounts – Your balance sheet makes no sense or has large suspense accounts – You’re not aware of the ongoing SEIS / EIS requirements – You don’t know you need to give notice of an R&D claim -You don’t know where to begin with share options – Your revenue and costs don’t match in the management accounts – You haven’t got a finance plan for EIS or Series A | – Consolidated accounts are never prepared except at year end – You are stuck on a legacy finance system that does not meet the business needs – You don’t know what a lender expects to get a loan – You’re finance lead is worried about IFRS reporting – Your finance team cannot help lead an acquisition – You’re not sure if you are investor-ready or not – Someone charges you 25% commission on tax R&D credits – You are let down by poor supplier management – Your audit is slow and painful, and does not help benchmark your finance team – The bank is losing confidence in you – Your financial forecasts (and team) are not aligned with sales forecasts (and the commercial team) – You’re losing sales because of credit control procedures |
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