Financial Roadmap Planning for Businesses

Financial Roadmap Planning for Businesses

A thoughtful and carefully constructed plan will provide a clear view of your business’s financial health and identify where improvements can be made for growth.

Financial Roadmap Planning for Businesses

Financial Roadmap Planning for Businesses

A thoughtful and carefully constructed plan will provide a clear view of your business’s financial health and identify where improvements can be made for growth.

What is a financial roadmap?

A financial roadmap is essential for small businesses. A thoughtful and carefully constructed plan will provide a clear view of your business’s financial health and identify where improvements can be made for growth. Getting started, however, can seem like a Herculean task when your business is just getting started or if your team is small.  

Financial roadmap best practices

To make the process a little easier, we’re going to highlight six best practices to follow while you’re planning.

  1. Tax support
  2. Strategic advisory
  3. Accounting operations
  4. Revenue process
  5. Back office system alignment
  6. Proactive bookkeeping

Each of these core functions requires unique and different skill sets. Many businesses fall into the trap of a “one size fits all” approach, but the challenge with this is that no company can optimally resource all three of these functions without forfeiting quality in one or more areas.

Tax support

Every business is required to file taxes. The traditional CPA firm is built for this specific need. Their partners and even junior partners focus on tax, tax law and tax strategy as a core competency. These same skills can translate well to audit work as well. The volume of information needed to understand tax law and strategy is never ending.

Your tax provider should focus on employee tax needs and compliance, sales tax filings and strategy, and most importantly annual tax filings. A good tax advisor will also include guidance around tax benefits that your business can take advantage of throughout the year and into the future to support growth.

Tax related work is the greatest revenue generator for CPA firms. That is why they focus their teams and top resources on their tax practice and not on areas like financial modeling or accounting operations (i.e., bookkeeping). In many cases the same CPA firm that is charging you monthly to do your bookkeeping is also going to charge you to clean up the financials so you can file your taxes. The resources and skill sets are misaligned for this type of work.

Even within tax, there are subsets of groups with specific focus areas that can help to improve your bottom line. One key example is R&D tax credits. There are many firms that focus solely on R&D tax credits and only receive payment if you receive a credit. This is one obvious example of why specializing and finding the right partners is so critical to business success.

Strategic advisory

The role of strategic advisor normally falls to the fractional CFO or controller. As your business grows there is a great deal of forward-looking modeling and analysis needed to create things like your budget, revenue forecast, headcount planning, and in some cases capacity planning or job costing. Each of these requires a skill set unique to finance experts with experience creating and maintaining these models. Making sure that you find a CFO or controller who has actual experience working inside companies is important too.

One other area that will require constant evaluation as your business grows is that of price analysis and planning. Understanding how you should price your goods or services is a constant evolution. Ensuring you are achieving the right margins to support growth and scale is paramount to ongoing success.

Financial analysis spans across your business. These models can help identify where you are over-investing or under-investing in your business. For example, you may have a marketing contractor that you are paying $2,000 per month to run marketing campaigns while you are also paying $1,000 per month in advertising spend. If your advertising spend is leading to 50 leads a month while your marketing contractor is driving five, what's the better investment? It can be hard to step back and look at your business in this way. It’s even harder to constantly analyze every aspect to ensure you are operating efficiently. That is why the strategic advisor is a critical role in growing and scaling businesses.

Accounting operations

Everyone needs accounting operations—the ability to pay bills, get paid and track it all. In fact, you can’t do your taxes or forecast ahead without good financial data from accounting operations.

Accounting operations are the behind-the-scenes operations that keep everything in your business running. They are the financial language of your business.

Great bookkeepers understand the difference between bookkeeping for tax purposes and streamlined accounting operations that make it easier to run a business and make good financial decisions. It’s either easy to pay your bills, pay your people and get paid or it’s harder and takes longer than it should.

Once accounting operations are streamlined, then comes the strategic bookkeeping element. You either bookkeep for taxes or to understand the business on a month-to-month basis. The greatest difference between the two can be found in your chart of accounts. The chart of accounts essentially creates “folders” for you to book certain types of transactions. For example you could have a “Catch All” account that is called Marketing. Without good data that's broken out well, you have to make general assumptions that can negatively impact your business.

Tracking all transactions is important to every business. Getting these transactions reconciled and categorized to the right buckets is what makes a business successful. Great bookkeepers will focus not only on the transactions but the operations of the business. Understanding how and why these transactions occurred provides context needed to drive accurate bookkeeping and close the financial on time.

Each of these functions relies on one another to provide the insight and answers needed to successfully operate your business. If you have to start somewhere, start with bookkeeping. Without bookkeeping you will not have the relevant data needed to model for financial analysis or file your taxes.

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:

  1. 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.
  2. Frequency: How often will you bill your clients?
  3. 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:

  • Routable for bill pay
  • Ignition or Chargebee for invoicing
  • Harvest for hourly tracking
  • Forecastr or Fathom for reporting and financial analysis.

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.


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!

Now, let’s wrap up with how to approach financial planning and fixing exceptions and adjustments as they happen.

Financial reporting must be useful to both you and your businesses needs

Specifics matter in business. Every day you are making hundreds of decisions about your business. Each of those decisions impacts the success or failure of your business. Wouldn’t it be nice to know which decisions played out positively and which ones impacted the business negatively?

The first step in truly understanding your business is to correctly identify, categorize and document your transactions. When we say transactions, we mean expenses and revenue or incoming dollars. Let’s talk about headcount and payroll.

Depending on the size and type of business you run, headcount may be the most important factor of your success. In the professional services world your capacity and resources are your product. Therefore, understanding the benefit of adding an additional consultant, contractor or general team member may directly correlate to revenue growth. On the flip side, hiring too soon may have a negative impact on your margin if there isn’t work that could be done by this new employee.

In this case it may make more sense to hire a salesperson that could drive new leads and projects. Giving you the data and visibility needed to make the next consulting hire. This type of “capacity planning” is necessary as businesses grow. If you aren’t allocating payroll to the unique business units it will be very difficult to understand the impact of an additional employee. For example, we could just outline an entire bucket of expenses for “payroll” or “overhead.” What that doesn’t tell me is the impact or difference between a marketing employee, sales person, manager, consultant, contractor and so on.

When thinking about the granularity needed when tracking your financials, you must think about the questions you will need to answer and the decisions you will have to make. Clear, concise and well-documented financials make decision making incredibly simple. Pairing that with a bookkeeper that accurately reconciles and categorizes these transactions daily ensures you have the visibility and confidence needed to make strategic decisions and investments into your business.

The most important thing to remember is that there are truly two types of bookkeeping:

  • Bookkeeping to file taxes (traditional CPA bookkeeping)
  • Bookkeeping for financial analysis & strategic decision making

Make sure as your business grows that you lean into and require your bookkeeper to get granular with your transactions. Accuracy and timeliness are paramount to successful financial analysis. Take a look at your books today. Make sure you are getting the financials on time, accurately reconciled and categorized, and that there are no “catch all” accounts in your books.

Fix exceptions & adjustments as they happen (not 30 days later)

Running a business is hard. You are incredibly busy. As a business leader you have a million priorities. It’s incredibly difficult to stay on top of every little thing happening across your business. We often find ourselves moving so fast that trying to recall what we had for breakfast this morning (let alone last week) is an impossible task. Now imagine trying to remember what a single transaction on the company credit card was 30 days ago….yikes!

It can be extremely easy to put a Post-it note on your desk and say I’ll take care of this next weekend. But when the end-of-month rolls around, you likely won’t remember where that note went let alone why you wrote it in the first place.

Bookkeeping errors happen. A transaction was placed on a personal card, a vendor invoiced you twice, you approved an invoice that shouldn’t have gone out, and on and on and on. Errors and issues will come up; it’s inevitable. It’s the timeliness and accuracy for which you make these adjustments or clean up the exceptions that supports healthy financials.

If an exception happens:

  1. Call it out to your bookkeeper.
  2. Determine if this is a regular or a one-off issue. (If your bookkeeper didn’t bring this issue to you in the first place, that's a bigger issue for another day.)
  3. Request the appropriate adjustment.
  4. Document the reason for the adjustment, and get it done as soon as possible.
  5. Small things like transaction categories or credit card bills may seem insignificant, but a one-time mistake can snowball into a bigger issue down the line. More importantly, tracking revenue accurately is the most important thing you can do as a business. A small issue can turn into a massive cash flow problem down the road. This may be how revenue was recognized, whether or not it was invoiced in the first place, as well as errors in the actual invoices that should have been for higher or lower amounts.

Each of these scenarios highlights small issues that can become bigger ones down the road. When errors or issues come up, take care of them while they are still fresh in your mind. Take care of them while you still have the documentation in front of you. Don’t wait to play the memory game and hunt for the receipt at the end of the month. Not only will you have out-of-date financials by the time you can close your books, but you’ll also waste time running a fire drill to solve this issue as you prepare for month-end or year-end close. Take care of it when it happens and find a partner that takes care of this for you.

For an easier time with financial planning and better visibility into the health of your business, get a free consultation with Decimal to see how we can improve your accounting operations.

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