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What Every Founder Should Know About Their Finance Department – Forbes

Finances can make or break you, but many business founders don’t know where to begin or how to manage their money—especially in the early stages of entrepreneurship. First-time business founders need as much support in the financial side of things as they do in the administrative and creative realms.

Entrepreneurs Josh and Kristy Alballero founded IOOGO, an accounting company that leverages technology and tax planning expertise to help business owners succeed with their finances. Their unique technology streamlines the process of managing finances so that their on-staff accounting experts can devote more time to strategy and planning. In the research part of business planning, they surveyed entrepreneurs and found that 94% of first-time business founders confuse the roles of accountant, tax planner, and CFO.

With this in mind, the Alballeros decided to create a technology that empowers their CPAs and CFOs to act more as financial guides than as bean counters. With their extensive experience in the financial side of entrepreneurship, Josh and Kristy are sharing their top three financial tips for first-time founders.

Accounting Starts With Basic Math

In the first six months of your business, accounting comes down to simple bookkeeping, the Alballeros said. This means much of your time will be spent tracking your revenue versus expenses. More often than not, you’re going to see expenses before you actually see any revenue. They always recommend that you consult an accounting or tax professional, but it doesn’t necessarily mean that you have to hire that person on a monthly engagement. After all, you have to learn your business numbers before you can transfer that responsibility to someone else. Yes, you didn’t open your business to become an accountant, but the reality is that you will have to do basic accounting in the beginning. 

Know When to Let Go and Let Someone Else Take Over

Now you’re at a crucial point of your business, and you should congratulate yourself on your accomplishments thus far. Now you have to decide whether to focus on the growth of your company or to continue wearing all of the hats. As your business grows, your accounting needs will become more complicated and demanding. Whether it is for investor reports, financial modeling for your products, or taking on debt to grow the business, you don’t have the time or the expertise to do this type of accounting for your business. This is where a lot of founders find themselves stuck. They want to control every part of their business and consequently don’t know when to let go. 


Know that an expert can help you reach your goals and take off the burden of financial management so that you can focus on the other parts of being a founder.

Know When You Need a CPA and a CFO—But Don’t Get Ahead of Yourself

What is really the job of a CPA? I’ll tell you what it’s not—it’s not thinking about the long-term strategy of your business. A CPA is there to help you with all sorts of accounting needs, and (in some cases) tax filing, but in rare cases is it in their job description to do the work of a Chief Financial Officer. Many founders also make the mistake of hiring a CFO too early, and the CFO ends up doing payroll and bookkeeping, which is not the intent of the role. Having a CPA is extremely important as your business is growing, but even more important is having someone that can help you strategize, plan, and forecast. The CPA’s job is to ensure your numbers are ready for the year, while the CFO’s job is there to ensure that the health of the financials aligns with the vision of the business.

You’ll have more success if you focus on keeping your financials in order from the start, and then employing strategic methods to make sure that documents, payroll, and bookkeeping are filed correctly and in an orderly fashion. As an early-stage entrepreneur, it’s helpful to know which financial steps are most important in the beginning. With a solid foundation, you’ll know when to bring in the experts and when to hand over control. Successful business finance is all about having a plan. Now you have one.