Most founders assume their finance function is fine. They only realise it is not when something drops. But often the early signs are usually already there. They are just being missed.
In reality, the warning signs tend to show up long before anything blows up. They just get normalised or brushed aside because everyone is busy and the business feels like it is moving forward. But they matter. So what, are the red – and green – flags you should be looking out for?
Red flag one: No one can tell what the real margin is
If no one knows what you make on each service line or client after costs, you are guessing, and that is where bad decisions begin.
Red flag two: Month end drags on
If clean numbers are not ready within a week, the Board ends up making decisions in the dark.
Red flag three: Everything feels last minute
Cash surprises, tax surprises, chasing things that should already be sorted. These are signs the team is firefighting.
Green flag one: Leadership get clear, concise updates
Not pages of data. Just what matters.
Green flag two: Forecasts are not constantly changing
People start trusting the numbers because they line up with reality.
Green flag three: There is a sense of order
Nothing feels rushed. People know what is happening and when.
If you are seeing more red flags than green, it is time to review your finance setup. Headstar’s free Finance Team Test can help identify where to start.
