It’s exciting to be able to take your skill and passion and channel it into a business. However, you probably did not plan to start your own business in order to become an accountant. According to Bloomberg, almost 80% of new businesses will fail within the first 18 months. Part of this reason may be that even with the best product or service, if you don’t have the right financial footing, it will be next to impossible to build a strong, profitable business. Here are some of the financial challenges that many small companies have as they get started and begin to grow.

Challenge #1: Managing cash flow

There are several factors that make managing cash flow a challenge. Perhaps you have a seasonal business and your revenue is not steady throughout the year. Do you have a good accounts receivable system to make sure that you are paid for goods and/or services in a timely manner? Can you accurately predict your expenses?

Challenge #2: Keeping accurate records

To keep track of progress (or a lack of progress) it is essential to maintain good records. Financial statements such as your balance sheet, income statements and cash flow reports need to be both accurate and timely. How do you keep track of revenue, expenses, and business equipment or property? Failure to maintain these records can lead to a flawed view of your business health.

Challenge #3: Analyzing your finances

Even if you are keeping accurate records, it can be a challenge to then analyze those records and know the appropriate action to take. Can you look at your finances and determine if it is a good time to expand? Or is it time to cut costs? Is it an appropriate time to seek outside financing to grow your business?

Challenge #4: Taxes

Corporate tax law can be confusing. You need to stay in compliance with current tax laws (which change frequently), project and estimate your quarterly tax bills, as well as plan for the future. As your business grows, keeping on top of your tax obligations becomes more and more of a challenge.

More than likely, spending time on these important tasks is time away from doing what you love. As a business owner you can leverage the services of a CPA not only for tax services, but expert advice on other financial matters. Having the right team who can look at the complete financial picture and provide the right advice at the right time can be a crucial part of your success.