Management debt, as described by Ben Horowitz back in 2012, is incurred when an organization delays doing the right thing in favor of the easy thing. The right thing must eventually be done and the expense, including “interest”, will be much greater than it would have originally. Like financial debt, management debt is a tool, not an inherent evil. It becomes problematic when organizations fail to account for it, and become overwhelmed by it, even to the point of failure.
Regardless of whether your business needs a single bookkeeper or a team, take care to ensure that you avoid these five pitfalls to avoid an expensive and frustrating change down the road.
Accounting and bookkeeping are rarely top of mind for entrepreneurs and executives, but growth minded leaders understand the importance of accurate, on time financial reporting. A challenge for many is knowing and deploying the right resources for a company’s needs. Internal or external? Individual or team based? Onshore or offshore?