As businesses expand, financial operations become more complex – When that happens, many brands turn to accounting experts who understand the intricacies of inventory management, cost accounting, and financial planning, yet finding people with the required depth of knowledge is a challenge.

Nick Antonian, Partner-in-Charge of Assurance Services at top-ranked advisory firm Marcum, has made a career of helping companies make the right financial decisions, whether finding the best accounting tools or conducting audits. Nick has worked with dozens of product-focused businesses that need comprehensive financial services, including audits, financial reporting, and risk management. He has seen first-hand the challenges these up-and-coming companies face.

By following his tips below, you can build the financial systems needed to scale.

Nick’s Top 4 Tips: Setting Your Financial Systems for Success

From Nick’s experience, sustainable growth and profitability are easier to achieve when you implement strategies and technologies that support expansion at every step. Here’s how brands can overcome the talent shortage and ensure financial stability as your business grows.

The costing and complexities of inventory for a consumer products company is something that requires a lot of expertise. And that expertise is not always available in the labor markets. – Nick Antonian

1. Get an accounting tool in place ASAP

“The first thing you need to do is make sure you have a solid accounting system or general ledger financial platform that can handle growth,” Nick says. These tools unify data in one place so you can monitor 3PL invoices over time and spot any inconsistencies. If you can afford to invest in technology early, you’ll reap the benefits many times over as your company grows.

As you begin searching for a tool, consider the following features to help guide your decision:

• Integrate with your other systems: Financial systems don't just analyze your finances — they leverage information from across your business, including sales, marketing, and e-commerce data to give you a consistent view of your company’s performance, so you can track revenue, gather trends from customer transactions, and manage inventory in real-time.
• Be easy to use: A valuable accounting software will provide you with clear support and training resources. That way, you can become an expert faster and get more out of the tool right away.
• Offer a good value that fits your budget: The best options work to meet your needs at your price point. Consider tools that offer reasonable pricing for the features your team will use, rather than overpaying for ones you won’t.

If you don't have infrastructure and resources in place, the problems are only going to get bigger and harder when you scale. When you're in growth mode, those pain points hurt even more.

2. Automate as many processes as possible 

Once you have your accounting tool in place, you can begin to leverage it to automate your financial management as your business scales. Automation simplifies repetitive tasks such as invoicing, payment processing, and financial reporting while lowering the chance of human errors.

Nick underscores the importance of automation for growing businesses. “Leveraging as much technology as possible pays off as you start scaling and can handle an increase in volume and personnel,” he says.

Like every decision with your business, you need to take a thoughtful and methodical approach. Here’s how to start the process of automating your financial processes:

• Identify key processes: Start by identifying financial tasks that are repetitive and time-consuming for your business. Before automating anything, audit your processes to see which take the most time and cost the most money. 
• Implement change gradually: Slowly introduce automation over time so your team can adapt without overwhelming existing workflows. Start with one or two critical processes and monitor the results before expanding automation to other areas.
• Provide training and support: Invest in training sessions to help employees learn how to use each tool. Successfully adopting new technology depends on how well your team can use it, so make sure everyone has the knowledge they need to make the most of your automation.

3. Set a detailed and comprehensive budget

Nick emphasizes the importance of setting annual budgets. “Any well-managed company has an annual budget,” he notes. Your budget will give you a top-level view of all your expenses, helping you to evaluate more significant costs associated with service proposals, such as 3PL contracts and technology investments.

For a more detailed look at financial performance, Nick recommends that brands compare their monthly budget to the actual results. Thorough reviews catch billing inaccuracies earlier in the process so they can be resolved faster, rather than discovered months later.

Monthly budget meetings enable company leaders to make adjustments based on actual performance. “Companies should be asking, ‘Where are we in the gross profit of our business? Why are we down, and has the cost of our goods changed?’ Those can be significant,” Nick says. By asking these questions during finance meetings, you can drill down into the data to quickly identify and address any issues impacting profitability.

4. Beware of expense creep from your warehousing partners

As a DTC retailer, you need a great relationship and honest communication with your 3PL partners. Part of building that rapport includes navigating any billing issues and reconciliation complexities directly. But it's not always easy to spot when these financial headaches arise. They often go unseen if you don't have the right strategies to stay ahead of them.

Cost increases can be unexpected, especially if they result from inaccurate billing. Even with accounting software, vigilant monitoring of your 3PL partners will help you avoid unexpected costs. Meticulously review your invoices and compare charges against your contract to ensure you’re being billed correctly.

Costs rise year over year. You'll see that in health insurance and other areas like warehousing costs, especially with labor rates. And employee misclassifications happen all the time.

Being hyper-aware of the potential for expense creep helps control costs while building partnerships based on mutual trust and transparency. By tracking and verifying all expenses, you can more easily break down costs to understand where you are overspending and adjust as needed.

Tools like Implentio automate the invoice reconciliation process to ensure accuracy in billing and reconciliation so you can set your business up for financial stability.

Implentio and Marcum Partner to Drive Your Financial Success

Success is ultimately driven by financial stability. Implentio is the only tool that offers instant reconciliation on 3PL charges, by consolidating disparate data sources into one place and flagging and reporting reconciliation errors automatically. 

Marcum provides the complete spectrum of tax, assurance, and advisory services, supporting their clients with pragmatic, industry-focused insights. Together, both companies equip DTC brands with the guidance and resources needed to grow sustainably.