Vital Stats

  • Player: Gary Epstein
  • Company: EasyBiz
  • Established: 2004
  • What it does: EasyBiz is the distributor of QuickBooks Accounting Software in South Africa and Sub-Saharan Africa.
  • Visit:  

When you’re scrambling to bring a new product or service to market, the implementation of solid financial controls can quickly fall by the wayside. The reason for this is simple: When you’re trying to get your business up and running, setting up an accounting system can seem like a bit of a waste of time. Why worry about it if you barely have a product or customers yet? Why not worry about financial controls when the money starts rolling in.

This, according to Gary Epstein of EasyBiz and QuickBooks SA, is exactly the wrong way to go about it. Once you let control slip from your hands early on, it becomes increasingly hard to regain it.

So how do you make sure that you have full control of your business from day one? Epstein explains.

Related: EasyBiz QuickBooks – Business Management That Balances

When should you start worrying about financial controls in a start-up?

You need to worry about them from day one. Any start-up should have two absolute priorities: Getting its product or service out into the market, and establishing good financial controls.

How would you define ‘financial controls’ within the start-up environment?

It comes down to knowing three things: Knowing what you purchase, what you invoice, and what you have in the bank. To put it simply: It’s about cash flow. Moreover, you need to be able to check these things daily. Monthly reports won’t do.

Start-ups don’t have money to waste. Any young business should always be aware of its exact financial situation.

Why are financial controls so important?

They can literally mean the difference between failure and success. In our experience, about 80% of young businesses fail because of a lack of financial controls.

By their very nature, start-ups tend to spend ahead of revenue, which is a risky position to be in. If a business is in this position, and it doesn’t manage its cash flow carefully, it will run out of money.

Why do you think start-ups are slow to embrace the necessary systems?

There are a few reasons, I think. Firstly, start-up founders are passionate about the product or service they’re working on, and not about accountancy. They worry about the product, and not the money, which can be a mistake. Secondly, entrepreneurs are often big-picture thinkers who like to look at the big issues, and not the fine print and small numbers.

Accounting doesn’t interest them. Thirdly, the word ‘accounting’ tends to scare people. It seems complicated and overwhelming.

People are scared to delve into it, so they instead put it off until it becomes too late.

Related: How To Budget For Start-Up Success

Is accounting really that scary?

It needn’t be. An entrepreneur certainly doesn’t need a degree in accounting to implement adequate financial controls.

A start-up doesn’t even need a bookkeeper. Nowadays, a company can be hired to perform that service when it becomes necessary.

But would you recommend some form of education in basic accounting?

Definitely. There are organisations out there that provide non-accountants with a basic understanding of accounting in record time. A good example is our basic bookkeeping course, which provides a great overview of financial controls.

How should a start-up go about implementing financial controls?

Firstly, as mentioned above, educate yourself a bit. Learn the basics. Secondly, make it as easy as possible. Use software like QuickBooks that’s plug-and-play and easy to use. It’ll save you time, because so many processes are automated, and it’ll deliver reports that allow you to keep track of your cash flow at a glance.

Remember this

If you don’t have an excellent handle on your cash flow, you don’t actually know what state your business’s finances are in. Good financial controls are crucial.

GG van Rooyen
GG van Rooyen is the deputy editor for Entrepreneur Magazine South Africa. Follow him on Twitter.