System 7: Accounting & Cash Flow Systems

Role: The financial scoreboard and lifeline.

1. System Purpose

To accurately track all financial transactions, manage revenue from course sales and services, control expenses, ensure regulatory compliance, and provide clear visibility into the company's financial health to support strategic decision-making.

2. Key Components

1. Invoicing: Generation and delivery of accurate invoices to clients for services and courses.
2. Subscriptions: Management of recurring revenue streams, especially for ongoing course access or support plans.
3. Expense Tracking: Recording and categorizing all business expenditures.
4. Cash Flow Visibility: Monitoring the movement of money into and out of the business to ensure liquidity.
5. Reporting Cadence: Regular generation and review of financial statements and performance reports.
6. Payment Processing: Securely handling incoming payments from customers.
7. Payroll & Employee Expense Management: Processing salaries and reimbursements for employees (linked to People Management).
8. Tax & Compliance: Ensuring adherence to all relevant tax laws and financial regulations.

3. Tools Used (Within Current Stack)

• Invoicing: (Placeholder for future accounting software, e.g., QuickBooks Online, Xero). Manual invoicing via Microsoft Word/Excel for MVP. HubSpot Sales Hub (for generating simple quotes/invoices linked to deals).
• Subscriptions: (Placeholder for future subscription management platform, e.g., Stripe Billing, Chargebee). Manual tracking via Microsoft Excel for MVP.
• Expense Tracking: (Placeholder for future accounting software, e.g., QuickBooks Online, Xero). Microsoft Excel for MVP.
• Cash Flow Visibility: (Placeholder for future accounting software reporting). Microsoft Excel for MVP.
• Reporting Cadence: (Placeholder for future accounting software reporting). Microsoft Excel for MVP.
• Payment Processing: Stripe (for online payments, integrated with HubSpot or future course platform).
• Payroll & Employee Expense Management: (Placeholder for future payroll software, e.g., Gusto, ADP). Manual via Excel/Bank for MVP.
• Tax & Compliance: External accountant, Microsoft Excel (for preparing data).

4. High-Level Workflow (Step-by-Step)

1. Revenue Recognition (Sales Hand-off):
   • System 3: Sales closes a "Won" deal in HubSpot.
   • This triggers a notification or task for the Finance team.
   • For course sales, payment is collected via Stripe.
   • For service projects, a new invoice process is initiated.
2. Invoicing & Payment Collection:
   • Finance team generates an invoice (initially via Word/Excel, later via accounting software) based on the HubSpot deal details.
   • Invoice sent to client.
   • Payments received are recorded and reconciled with bank statements.
   • Overdue invoices are flagged for follow-up.
3. Subscription Management (If applicable):
   • For recurring course access or support contracts, client is set up in the subscription tracking system (manual Excel for MVP).
   • Automated billing occurs via Stripe (if integrated).
   • Renewals and cancellations are managed.
4. Expense Management:
   • Employees submit expense reports (initially manual, later via dedicated software).
   • Receipts are attached and expenses categorized.
   • Approved expenses are reimbursed and recorded.
   • Company credit card statements are reconciled.
5. Payroll Processing:
   • Time tracking data (if applicable, from System 8: People Management) submitted.
   • Payroll processed on a scheduled basis.
   • Tax withholdings and deductions managed.
6. Financial Reporting:
   • Regular financial reports (P&L, Balance Sheet, Cash Flow Statement) generated (manually in Excel for MVP, later via accounting software).
   • Reports reviewed by management as part of System 1: Management & Leadership operating rhythms.
7. Audit & Compliance:
   • External accountants perform periodic audits.
   • All financial records are maintained according to regulatory requirements.
   • Tax filings prepared and submitted.

5. Detailed SOPs

SOP: Basic Invoice Generation for Service Projects

• Goal: To accurately generate and deliver invoices for completed tech support service projects.
• Roles: Finance Administrator.
• Steps:
  1. Receive Notification: Finance Administrator receives notification (e.g., from HubSpot, Teams) that a service project has been "Closed Won" and is ready for invoicing.
  2. Retrieve Project Details (HubSpot/Fulfillment System):
     • Access the relevant deal record in HubSpot CRM to confirm project scope, agreed-upon pricing, and client billing information.
     • Cross-reference with System 4: Fulfillment for actual hours spent or milestones completed if it's an hourly/project-based invoice.
  3. Generate Invoice (Word/Excel Template):
     • Open the standard "Service Project Invoice Template" (stored in SharePoint).
     • Fill in all required fields:
       • Invoice Number (sequential, track in Excel log).
       • Invoice Date, Due Date (e.g., Net 30).
       • Client Name, Address, Contact.
       • Our Company Details.
       • Detailed description of services rendered (referencing project name from HubSpot).
       • Quantity, Unit Price, Total.
       • Applicable taxes.
       • Total Amount Due.
       • Payment Instructions (Bank details, Stripe link).
  4. Review & Approve:
     • Finance Administrator double-checks all details for accuracy against the HubSpot deal and project completion records.
     • Manager (if required) reviews and approves the invoice.
  5. Send Invoice:
     • Convert the invoice to a PDF.
     • Email the PDF invoice to the client's billing contact (from HubSpot).
     • BCC a central finance email address for record-keeping.
  6. Record Keeping:
     • Save the final PDF invoice in the designated SharePoint "Invoices Sent" folder.
     • Update the "Invoice Log" Excel spreadsheet with invoice number, client, amount, and status ("Sent").
     • Update the HubSpot deal record to "Invoiced."
  7. Monitor Payment:
     • Regularly check bank statements for incoming payments.
     • Once payment is received, update the "Invoice Log" spreadsheet to "Paid" and the HubSpot deal record to "Paid."
     • Initiate follow-up process for overdue invoices.

6. Documents to be Created

• Chart of Accounts
• Invoice Templates (Word/Excel)
• Expense Report Form
• Invoice Log (Excel)
• Subscription Tracking Sheet (Excel)
• Financial Reporting Templates (P&L, Balance Sheet, Cash Flow)
• Compliance Checklist (Tax, Regulatory)

7. Required Flowcharts

• Order-to-Cash Cycle Flowchart
• Expense Reimbursement Flowchart
• Monthly Close Process Flowchart

8. Dependencies on Other Systems

• System 3: Sales: Receives sales order data for invoicing.
• System 4: Fulfillment: Provides data on completed services for invoicing.
• System 8: People Management: Provides payroll inputs.
• System 1: Management & Leadership: Receives financial reports for decision-making.
• System 6: Administration: Relies on IT infrastructure (secure financial data storage) and IKM (financial policy documentation).

9. MVP Version vs. Scaled Version

• MVP (Phase 1):
  • Manual invoicing using Word/Excel templates.
  • Basic expense tracking in Excel.
  • Monthly reconciliation of bank statements.
  • External accountant for tax filings.
  • Direct payment processing via Stripe for online sales.
• Scaled Version (Phase 2+):
  • Full-fledged accounting software (QuickBooks Online/Xero) for automated invoicing, expense management, and reporting.
  • Integrated subscription management platform.
  • Automated bank feeds and reconciliation.
  • Dedicated payroll software.
  • Advanced financial analytics and forecasting tools.
  • Potentially, integration between HubSpot and accounting software for seamless data flow.