The Importance of a Sound Accounting Department

Small, growing businesses with inadequate people in their accounting departments could be in for a rude awakening if they can’t plan and manage cash flow correctly. Cash flow is critical for every business and the importance of cash flow planning cannot be overstated.

We tell our clients that they should be preparing rolling, thirteen-week cash flow reports to see what sales and collections will be and to determine if those results work for the business. Reconciling cash and accounts receivable (for accuracy) and having basic controls in place for inventory are also key especially when talking to lenders.

Banks are much less likely to approve a deal if controls are mediocre or non-existent. Lenders can tell a lot about a business just by walking through the warehouse. If it’s messy, usually the books are messy, too; if the warehouse is orderly and neat, the books usually are in good shape, too.

Typically, business owners are not financial people which makes them reluctant to hire accounting staff (or hire less than competent staff) because they don’t understand the financial end of running a business. But it’s incumbent upon them, and extremely important, that basic controls are in place. This not only helps avoid problems but frees them up to concentrate on growing their businesses.

Accounting departments are underserved in most small companies and that’s something business owners need to change.

About Celtic Capital
Companies looking for working capital to cover operating expenses, fund growth, increase buying power and take advantage of vendor discounts and rebates turn to Celtic Capital. With an appetite for the more complex transactions, Celtic Capital has a history of success in crafting creative, flexible asset based financing solutions from $500,000 to $5 million with no financial covenants.

As an independent lender, working with companies nationwide, Celtic Capital is willing and able to alter price and deal structure and expand lines of credit to handle its clients’ increased revenues; and when cash flow is an issue, will look toward providing an inventory facility to help offset lost cash flow.

If you know of, or are, a business in need of non-traditional financing, contact Mark Hafner at 800.742.0733 or, or visit us at