You have been researching and writing your business plan and requirements with the help of your Business Analyst. You’re imagining what your target launch date looks like and how exciting this venture is going to be when you finish all of this work that is taking so much time. Then, the objective to maintain the finances is a focal point that you have to consider.
Several small business owners believe that they will just purchase a service like Peachtree Accounting to do all of the work for them so they can turn it over to the CPA to handle. Peachtree handles it all from payables, receivables, payroll, and taxes. Those pesky General Ledgers and balancing them isn’t something you want to spend your time on, is it?
The General Ledger, unless you have someone who is skilled with every single entry and transaction will be daunting and can become a full-time job. Unless you know that you have someone who is 100% error free all of the time, you will need some level of understanding of how the IRS small business tax laws impact your business and your books will have to be reconciled so your taxes are properly reported and paid.
How are you going to handle collections? Are you going to chase those defaulted payments down? Are you aware of the laws involved with collecting debts? There are strict Federal mandates with the process of collecting funds that involve Federal business ethics rules.
Have you considered the accounting best practices that educate us to separate accounting roles and responsibilities to minimize accounting fraud and theft from your business?
Will you have investors involved with your effort? Do you have a future goal of transitioning from a private business to a publicly traded IPO? Sarbanes-Oxley is an Act that was passed by Congress in 2002 to protect investors from potential fraudulent accounting schemes as a result of the Enron and WorldCom scandals. Sarbanes-Oxley specifies in a section that requires executives to certify the accuracy of their reported financial statements. The act further specifies rules for business processes and procedures for financial controls. If these rules are not understood and adhered to, there is a liability risk for your business and the IT department is responsible for storing these records according to the standards of the SOX Act.
The process of IT business analysis early in your business planning is to help decision makers (you the business owner) determine whether the method of SOX compliance is integrated and adhered to. What will those processes in IT look like? What change management procedures will be in place to validate that anything implemented into daily operations supports the compliance concerns?
Careful planning to educate yourself and the rest of your stakeholders about the Federal, State, and Local mandates to maintain your business finances is as important as your financial projections. Take your time in this section of your business objectives and solicit financial experts to help you with the considerations that should be included in your Business Requirements documentation.