Part 2: Best practices for small businesses planning a financial roadmap

This is the second post in a three-part series from our friends at Decimal, the experts in automating and outsourcing bookkeeping and back-office functions.

Creating a financial roadmap can be overwhelming for small businesses—where do you even begin?

In our first blog post of this series, we went over the importance of finding your financial support systems in regard to tax filing, strategic advisory and accounting operations when starting your financial planning. Now, we’ll dive into our next two best practices as they apply to the revenue process and back-office systems.

Don’t wait to fix your revenue process

Revenue is the lifeblood of every organization. Without revenue, there is no business. When you’re getting started, the goal is to bring in any revenue any way you can. The challenge most face is that this can begin to spiral out of control very quickly. It causes inefficiencies at the top of the funnel and in servicing clients. There are time lags on customizing agreements and attempting to protect the business throughout the process. It also becomes difficult to renew, upsell or grow clients when dealing with custom proposals and billing.

The biggest challenges come in the form of outstanding invoices, missed invoices and complicated billing that makes it difficult to track and manage long term. Collectively, we’ll call this Accounts Receivable or AR. Managing AR can be extremely time consuming when every client pays you via a different method and on a unique frequency. Removing as many of these complicated billing structures as possible will streamline your overall process and reduce the amount of outstanding invoices and payments.

Time is money and if you have to spend time on collections you aren’t focused on growing the business. Far too often do we see clients that forgot to send an invoice or follow up on an outstanding payment. With each day that goes by, your client gets further and further away from that point in time, making it harder to actually collect on that payment.

Finally, the most important aspect is determining how you should recognize this revenue. Will you be looking at a cash or accrual basis? This is a challenge for many founders, and surprisingly many bookkeepers have trouble understanding how to amortize and track deferred revenue.

When thinking about your quote-to-cash process start with the basics:

  • Pricing structure: How will you charge your clients? Is it scoped work, annual or monthly fixed fees, implementation plus a fixed fee? This is never a perfect science but the closer you can get to a fixed set of principles for pricing, the easier it will be to quote and structure your invoices.

  • Frequency: How often will you bill your clients?

  • Method of payment: Limiting the various ways clients can pay you reduces the opportunities for errors and missed payments. Most importantly eliminating any and all paper payment options such as checks is a critical step for all businesses.

Getting this right early will help streamline your operations long term and ensure you have the visibility and cash flow to continuously reinvest in your business and scale into the future.

Ensure back office systems align to your needs—today

Many organizations get bad advice. At times it’s accidental. You talk to a friend who runs a much larger business, and they share the absurd levels of sophistication they have in their back office operations. In other cases, it's the wrong partner who lumped you into their one-size-fits-all approach. Maybe you’re just getting started and you don’t have any “systems” at this stage of your organization's maturity. Systems, in our opinion, involve technology, people and processes.


Let’s start with technology. The majority of small-to-medium sized businesses are far too small to look at something like an ERP (Enterprise Resource Planning) system to support their back-office needs. However, they may be big enough to set up an accounting system like Quickbooks Online and move away from any and all paper processes. When you’re getting started, the most important thing you can do is track everything. This could be as simple as a spreadsheet with the name of the transaction, amount, date and what part of your business it applies to. The easiest way to do this is to get a credit card and make sure any and all expenses are paid via this medium, so that you can clearly see the business transactions and expenses.

It’s important to call out that the credit card should not be a personal credit card, and you should not make personal charges on it. Keeping personal and professional charges separate is key to understanding your financials and preventing major cleanup or unwinding of assets in the future.

Coming back to Quickbooks online, the primary reason this platform is so widely adopted is that it allows you to add on tools as you grow and scale. We recommend the following tools:

Not all tools fit the needs of every business. Determining what works for you requires clear evaluation and alignment to where your business is today. Additionally, implementation is critical to success. Now that we’ve talked about technology let’s transition to how this get’s done and by whom.


For most early stage companies, the CEO of founders may have to manage the books. As you begin to scale, there comes an inflection point where the decision has to be made regarding how and where you are spending your time. You will have to focus on clients and growth as volume picks up on the revenue front, driving a major need for bookkeeping support. As you hit this point, this is a good time to evaluate outsourcing your back office. Finding partners that are operationally focused and can assist in implementing the right technology to support your needs is paramount to ongoing success. The best practices we covered in our previous blog post really dive into the people's side of this equation. Refer to this when thinking about the right team to support your business.


Lastly, let's talk about the process side of things. Timing and tasks should be the biggest drivers here. When doing things yourself, set aside the time needed to focus on your books. Weekly reviews and tracking should be the absolute minimum. Getting these habits down early will help drive long-term financial success, and most importantly, make you more knowledgeable about your business.

As you bring on partners and team members, setting expectations and guidelines around communications, timing, and how expenses and revenue are documented in your business are critically important. Keep in mind that this should be a constantly evolving process. If you have partners that aren’t regularly adopting new processes to match your scale and growth, you have the wrong partners. Properly matching how technology and people work together drives the process creation and evolution. Choose well!

Up next, read Part 3 of this series for best practices as they apply to financial reporting and fixing exceptions and adjustments and as they arise.

Learn more about Decimal

There’s a better way to do bookkeeping. With Decimal, you can ditch the old way of doing things and get back to what matters most: running your company. Learn about how Decimal works.

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