Small-business financial checklist: Everything you need to know or might forget

Small-business financial checklist: Everything you need to know or might forget

Small-business financial checklist: Everything you need to know or might forget

by Boyd Hunter, CFO

Starting a small business means wearing many hats. You might start your day setting appointments or making sales, carve out a few hours to troubleshoot a mechanical or technological problem, negotiate with a supplier before close of business and spend your evening reviewing receipts.

Financial management is a vital part of starting a business and helping it grow, so having a checklist on hand to make sure you're hitting all of the important points on a regular basis can be a big help. That's especially true if your background relates to the product or service your company provides, as opposed to accounting or financial management. Use the following guidance to stay on top of your organization's financial needs.

Your small-business financial checklist


A budget gives you an accurate projection of what your business should expect to spend in a given timeframe. The final figures in your budget help you make sound, informed financial decisions about everything from acquiring new equipment to hiring staff and buying new office supplies. There are a wide variety of categories that may be listed on a complete budget. The U.S. Small Business Administration listed 16 of the most common on page 8 of its in-depth guide to money management, "Financial Management for a Small Business."

Beyond creating your first budget, be sure to regularly update it with newer, more accurate information. Regular budgeting is a cornerstone of financial transparency that allows businesses to understand expenses and what, if anything, they need to change.

Accounting software or hiring an accountant

You need to budget, prepare financial reports, pay taxes and handle a variety of financial responsibilities as a small-business owner. Few people are cut out to handle all of these responsibilities on their own, without any assistance from an accountant or accounting software.

If your business is in a particularly complicated financial position, working with an accountant can be a worthwhile expense. If your needs are more basic, using accounting software can help you maintain compliance, provide complete information and generally help you fulfill your organization's many financial needs.

Equity vs. Debt financing

Funding a small business is a top-of-mind concern for many owners. If you have a sound business concept and evidence that it can perform well and turn a profit, the last thing you want to deal with is a lack of capital to scale appropriately or invest in more effective equipment and workflows.

Equity involves selling a stake in your business to another party, as the Houston Chronicle pointed out. The advantage is that you don't incur any debt for the money you receive. The potential downside is that you will have to share some mix of profit and decision-making power with the new partial owner.

Debt financing involves taking out a loan to finance business growth. You remain fully in charge, but you have to pay back that amount, plus interest, over time. Businesses can consider traditional lending as well as more flexible options such as invoice factoring, which relies on unpaid invoices as a form of collateral.

Cash flow

Your cash flow is a key indicator of liquidity - the amount of available cash on hand and not tied up in various assets - as well as profitability. Cash flow is important because it indicates whether your business can meet immediate financial obligations with available money. Although long-term profitability is the ultimate goal for many business owners, a lack of short-term cash on hand can lead to very serious and negative consequences for businesses. Tracking cash flow helps you avoid unexpected problems where debts need to be paid quickly with cash that isn't currently available.

Finding a great financial institution to partner with

A reliable, dependable financial institution is a vital need for all small businesses. TAB Bank has 20 years of experience working with companies just like yours. To find out how we can help manage your banking and lending needs, get in touch today.

About the Author

Boyd Hunter

Boyd is a Certified Public Accountant and received his Bachelor of Arts and Master’s degrees in Accounting from Utah State University. Prior to joining TAB Bank, he worked for eight years with Ernst &Young in that firm’s financial audit division and later became the Manager of the Salt Lake City Technology and Security Risk Services (TSRS) practice for Ernst & Young. He is a graduate of the Graduate School of Banking at the University of Wisconsin –Madison where he also achieved the Executive Leadership Certificate from the Wisconsin School of Business.<br><br>Boyd has taught upper level accounting and information systems courses at Utah State University. As CFO of TAB Bank, he participates in the strategic functions of the bank as well as oversees and directs all operations and personnel related to accounting, finance, enterprise risk management, and strategic partnerships. Boyd is active with several charity organizations including many community groups and local schools.

Follow on Linkedin More Content by Boyd Hunter
Previous Article
Trucking 101: How to manage cashflow
Trucking 101: How to manage cashflow

The amount of available cash on hand can be a major benefit or detriment to trucking companies, so understa...

Next Article
What to look for in an A/R financing partner
What to look for in an A/R financing partner

A/R financing helps businesses in a wide range of industries and markets create stronger financial footing....