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Pull up a chair for a practical, eye-opening conversation with Heather Bain, Owner of Bain CPA Business Strategies, as she joins Adam Larson to talk shop about the real challenges—and solutions—facing small business owners when it comes to finance, accounting, and internal controls. From starting out in sales to becoming a trusted consultant for small businesses, Heather shares relatable stories, hands-on advice, and actionable steps that any business can use to tighten up their processes, improve cash management, and avoid costly mistakes. Whether you’re wrestling with company credit card chaos, scattered receipts, or feeling stretched wearing too many hats, Heather walks you through the importance of solid internal controls, why tracking really matters, and how technology (and maybe a CMA) can make all the difference. Perfect for accounting pros, business owners, and anyone looking for straightforward strategies to run a smarter, safer business.
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Welcome back to Count Me In. I'm Adam Larson, in this episode, I'm joined by Heather Bain, owner of Bain, CPA Business Strategies and an expert CMA who's dedicated her career to helping small businesses succeed. Heather shares her journey from family entrepreneurship to building expertise in accounting, collections, and internal controls. We'll dig into the biggest challenges small businesses face messy processes, overlooked controls, and missed tech opportunities. Heather offers practical steps for tightening up operations, leveraging software, and applying frameworks like Coso even when resources are limited.
Adam Larson:So if you want actionable tips to build a solid foundation and keep your business thriving, you won't want to miss this conversation. Well, I'm really happy to have you on the podcast. And today we're going be talking about working with small businesses. But I wanted to start our conversation by maybe walking a little bit back to the beginning of your career. You know, what got you into finance and accounting and how that path eventually leads you to working so closely with small businesses?
Heather Bain:Well, it's funny because I grew up with my parents owning a few small businesses. Okay. And so I was very familiar with how difficult it is for entrepreneurs to manage all of the different tasks that they have on their plates and then build their business at the same time. And so I was always fascinated with that and wanted to have my own small business. But what can you really sell if you don't have a lot of skills?
Heather Bain:So I went out and went to work in the workforce and my first jobs were in sales. So yeah, so I got a good idea of how you build revenue in a company and what the sales cycles are. And then when one of the small businesses that I was working with was merged into a public company and we had just a lot of receivables that needed to be collected, they moved me into the collections management position for the region. So I was managing the the collections. And then, of course, more tasks came on as we were collecting.
Heather Bain:There was less to collect because we caught up on the receivables. So they had me move into verifying payroll. Because it was a temporary agency, they did executive placement, but a lot of temporary placements as well. I was verifying the payroll and just had a really good overview of sort of the the accounting, the after the fact accounting that happens, you know, after the sale, after performing the services and that sort of thing. So once they didn't really need my collections expertise anymore, they actually laid me off.
Heather Bain:And so I went to work for a larger REIT in the collections department. And so I was working very closely with the accounting department and learned really, really strong procedures because it was a public company.
Adam Larson:Yeah.
Heather Bain:And so then once I earned my CMA and CPA, I was able to go and and work with small businesses as a consultant. So part of my transition into that was working as a controller for an energy company, that was also a small business. So I was doing lots of the controllership duties and that positions you pretty well to work with small businesses in other capacities. So that's how it progressed, if that makes sense. So the controllership duties gave me a really broad oversight of how different functions work within a small business so that I was able to translate that to other small businesses as a consultant.
Adam Larson:You know, that's amazing. Like, I think a lot of times people don't realize when they're early on in their career, the things that they're learning are things that they can apply later in life. Like, like as you were describing it, I'm like, that's something you need to know as a small business owner. Oh, that's something you need to know as a small business owner. So you were you were like...
Adam Larson:It was like you were getting a schooling in how to run your own business if you, you know, if you applied all your cards right.
Heather Bain:Right.
Adam Larson:So, when you're working with small businesses, you know, I think one thing you said you learned along the way is that you learned that you had, like they had good processes in place, especially when working for public companies. And a lot of times, small businesses, You know, what's that what's that first clue that maybe there's maybe there's not so good internal controls happening around this place when you're working with them?
Heather Bain:Well, wow. That's a a big... When their GL doesn't really make sense. That's a huge red flag because that one of the companies that I work with, I just go in and analyze the GL to say, does this make sense? And then I ask questions when it...
Heather Bain:When there are certain areas that don't make sense. A lot of times there could be inventory issues where they're having large supposed write offs or they don't actually know what their inventory is. Documentation is a is a very big clue that there are not good internal controls, bank reconciliations that haven't been done timely, things like that.
Adam Larson:And so what what do you do when you start having those conversations with the business owners? Like saying, hey. There's these things aren't in place. Like, things aren't lining up. We need to put new processes in place.
Adam Larson:Does that become overwhelming? Because, you know, with a small business, a lot of times people are stretched thin, people are doing multiple jobs and it's hard to say, well, so and so, like, you need to have internal controls, something as simple as like, hey, you need two signatures on a check or something like that. Right. That's hard to do in a small business sometimes.
Heather Bain:It is sometimes. And so outsourcing is a huge resource that small businesses need to take advantage of. So there's so many different companies that offer services that can fill in those gaps that help with the internal controls.
Adam Larson:Yeah.
Heather Bain:Whether it's a sales tax reporting company or some sort of payroll company, inventory management. When I worked with the staffing agency, one of the jobs they had was to supply temporary workers to go in and count the actual physical inventory in the warehouse. So just bringing in some outside help can be extremely cost effective and help fill in those gaps. And software now can do so much also. There's almost no excuse for not being able to find a software package that will integrate your inventory management, your point of sale, and your accounting so that it takes some of the manual steps out of it.
Heather Bain:And that would really help tighten up the internal controls.
Adam Larson:Yeah. What about with things like company credit cards? You know, we've all we've all seen
Heather Bain:That's a huge area.
Adam Larson:Mhmm. Yeah. Like, we we... We've all seen the Mhmm. We've all seen the commercials on TV, American Express or these other ones like, hey.
Adam Larson:Great for small business. And they make it look so simple. But I I I think in an actual practice, keeping track of the card, who's using it, who's holding onto equipment, things like that. Right. Right.
Adam Larson:Are some things you've noticed when you're working with the companies?
Heather Bain:Well, lack of receipts is really a difficult thing because... Especially with using it... The credit card for gasoline purchases Mhmm. Restaurants, office supplies in store, those make it very... Those type of transactions are really hard to track without a receipt because that's...
Heather Bain:It's just not sufficient to have a charge on a credit card. And many small business managers do not realize that. They just think, well, we've got a whole list of everywhere we spent this money. That's got to be enough. But it isn't.
Heather Bain:And so one aspect is that they don't know who used the card on that day necessarily. So there's not a checking in, checking out process for using the card, whether it's an online purchase or an actual physical location purchase. There's also just not necessarily the corporate card that's the issue. It's also, well, I put this expense on my personal card because it was more convenient. I didn't have the credit card.
Heather Bain:So now I have to be reimbursed. And so there's so many different issues that can happen with that, like false, you know, false reimbursements and things like that. So it's just the credit card usage can be a really sore point for small businesses using the internal controls. But there are a lot of different ways that companies can manage that. Like you mentioned, knowing who is using the card when, having just a list that a checkout process that if you're using the card, sign it out.
Heather Bain:And when you sign it back in or having individual cards for each person that you can track.
Adam Larson:Mhmm. Well, and having like monthly reporting and, you know, what are other ways? Like, there... I'm sure that there's softwares out there. There's organizations you can use that, like, you can easily track those things.
Adam Larson:You can take pictures of the receipt to do it faster, faster and And like, I guess, in this day and age with all the technology you have, it almost feels like there is no excuse for people to keep doing with the way they've always been doing it. You feel like that, but I'm sure that's not the case.
Heather Bain:It's not. It's amazing how even though, like you said, I've... I work with a company that's a small business. There are only two people using the credit card. Mhmm.
Heather Bain:And they each have their own credit cards to use. So it should be extremely simple. But the the process of taking a photo and uploading it timely and telling me what it is doesn't happen about 90% of the time. And so that makes it very difficult for them to track whether something's billable or not because sometimes those expenses are billable to their clients or they're part of a project cost And they need to know how much that project really costs and who to bill it to and those sort of things. And they're missing that information and having to recreate it sometimes months later when either the billing has closed out or it's really urgent and then they're having to take a lot more time to hunt it down.
Adam Larson:Does that create losses within the organization if
Heather Bain:they're It does. Not able to do so that is actually one of the best reasons to have internal controls is to reduce the risk of losses losses and false reporting.
Adam Larson:Yeah. So there... There's something else. So when you and I were chatting about having this conversation or something you mentioned that happens a lot of times when you're working with owners, sometimes the business owners think they have more cash on hand than they actually do. Yes.
Adam Larson:You know, how does that situation usually unfold?
Heather Bain:Well, not having the access... The proper access to online banking for the right people, so that they can track their cash on a regular basis. Like, having a rolling forecast is a very good idea for small business. And so very often I will I will show the business owner the the actual cash because there are checks, there are there are payables. They're obviously like the credit card.
Heather Bain:The credit card does have to be paid. So we might be doing a great job tracking the expenses and knowing what we've spent, but then forgetting that we have to factor in that credit card payment into the cash flow. And that's just an oversight that happens pretty often when people get busy. So having having a rolling forecast of where have we spent our cash, You know? Especially, like I mentioned, when they're using their personal cards and then expecting reimbursement, they don't realize that cash is going to be coming out because they don't know what the other person spent on a non corporate card.
Heather Bain:So having internal controls about the reimbursement process, the reporting process, and how if you spend money personally and need to be reimbursed, that needs to be pre approved so that it's not cash... It's not a cash bleed that the company isn't prepared for.
Adam Larson:Mhmm. You know, you're you're you're mentioning a lot of different things that like...
Heather Bain:Where you
Adam Larson:see... Where you've seen companies miss things. And it seems like a lot of this comes back to just keeping good books, writing things down. You know, what's kind of... How can small businesses kind of build like standard operating procedures and have these and kind of avoid the things that you've been saying.
Adam Larson:Because it sounds like a lot of people that you talk to or you've worked with have come up like you've seen these problems and it seems to be very consistent. So let's say a small business owner is listening to this and they're like, well, maybe I should start. Like, you know, what are, like, what are some ways that they can start building some of these starting operation procedures to start doing these internal controls? Because it sounds like it's just... It's very common within small business.
Heather Bain:It is very common. So you can only break one stick at a time. So it's really a good idea to start with just tracking everything. Just taking some time to track what you're really doing. And that can be done...
Heather Bain:They they have different software you can use now with AI that can help you track what you're doing on your computer. It can you... There are apps that you can put on your phone that help you track your time or your your mileage and things like that. So you can get a good estimate of where are you driving, how much are you using your computer, your time? Where is your time going?
Heather Bain:And what tasks are you doing? So everyone in the organization can start with at least a week, but ideally a quarter that they would track their time so that so that the things that don't happen every week or every month are tracked also. And then they can see who in the organization is performing these tasks. Is there a duplicate? Because sometimes there is a duplicate of one person is reporting and another person thinks they need to report the same thing.
Heather Bain:And so they're duplicating the process. They could just eliminate one of those people doing the reporting. And so if you simplify, then you have more time for actually doing what you... Only you can do. Does that help?
Heather Bain:So track it first and then Yeah. Then assign it to the people who really should be doing it.
Adam Larson:Yeah. It's it's like you have to kinda do some legwork you can actually before you can actually get that going. And that kinda makes me think about, you know, a lot of times accounting and finance people, you know, especially when they're in a small business, they're wearing like 20 different hats. You know, they have to like, oh, I have to do this. I have do this.
Adam Larson:You know, I'm kind of doing the duties of a controller and a CFO and a staff accountant. Like, I'm doing all these things. How do you kind of even like bring up the idea of segregation of duties without sounding like this is a luxury that they can't afford, that you don't have time or not enough people. Like, they already have enough hats. How can I segregate this duty because I don't even have people to give these tasks off to?
Heather Bain:Right. So that's a great question. Technology helps so much now. So outsourcing is a big one and also using technology to help you fill in the gaps. So if you use an expense management software, like you had mentioned before, a small business then can do the most important part, which is analyzing the expense...
Heather Bain:Know, the expenses rather than just tracking the whole thing... The whole process from using the credit card to paying it. You know, rather than having to do all of that work themselves, they can use either an outsourced service or just implement the advanced technology through an app. And then that that work can be eliminated. But those are the best ways.
Heather Bain:There's also... You know, if you have good internal controls around using AI, AI can help you too.
Adam Larson:Yeah. Yeah. We we keep... You keep pointing to like, hey, there's technology. There's all this great technology.
Adam Larson:How do you... You know? And obviously, you have to balance paying for that technology. Also, if the technology is finding a lot of losses that you could have had, it's a way of balancing out the cost of the technology. Like, hey, we would have actually lost this money, but now we're actually investing it so we don't lose that money in the future.
Adam Larson:So, I guess it kind of pays off in the run or is that... Am I thinking about that wrong?
Heather Bain:Well, it does pay for itself when you consider that your options, if you truly are stretched too thin, it's going to be hiring another person or outsourcing it to another company. And if if you'd rather not have at least managing software, the software doesn't call in sick and doesn't demand bonuses and, you know, things like that. So sometimes there are advantages to implementing the software side of it and going through that pain point rather than the onboarding of another person, which can, you know, there's so many nuances to that, to finding the right fit. So, you know, some small businesses can usually afford a $100 a month to cover some of the technology that it might take just to upgrade their processes. And some of them actually are free.
Heather Bain:They just aren't even using them within their own software.
Adam Larson:Yeah. It makes sense. You don't even know the capabilities of the software you've already paid for.
Heather Bain:Right. Exactly.
Adam Larson:Taking the time to educate yourself and make sure I'm ready to go. We can we can turn this feature on because it wasn't even turned
Heather Bain:on before. Right. And so as far as if you track what you're doing, you may realize that you already have the technology you need to get it done. You just have to free up one one person's time Mhmm. Maybe an hour a week so they can invest their time to to using the software.
Heather Bain:And implementing the expanded version of your software.
Adam Larson:Yeah. So when you work with different owners, you know, it's it seems like, you know, based on like stories I've heard and in chatting with, you know, you and other folks like who work with small businesses, a lot of times owners don't really think about these things until something actually goes wrong. Like everything's working, everything seems to be working fine, but then it's either pointed out to them or something goes extremely wrong. Then they're like, oh no, we got to do this, do this, do this. You know, what is it like when you're working with those different owners or, you know, what are what advice do you have to owners who are probably like, hey, you know, what what can you do to avoid this so that you're not paying for mistakes because you weren't proactive?
Adam Larson:And I think a lot of times when you're, when you're in that startup or, or, or small business type atmosphere, you're just kind of going, going, going, you want to get it working, but yet you forget that you want to make a solid lasting foundation and that's not easy to do necessarily.
Heather Bain:Right. That's a great point actually. Most entrepreneurs that have taken any kind of formal entrepreneur training, which it's not that common, that it's not really that common that people are specifically trained in how to run a business before they launch one. But the ones that have usually learn immediately that the goal of owning a small business and running a small business is to work on the business rather than just working in the business. So if an owner is...
Heather Bain:Has that that goal of working on the business to make it a functioning system rather than just running on a treadmill every single day to fulfill customer orders and manage their employees. Then that business owner is going to be able to have the mindset to put aside a little bit of time to address the issues that we're talking about now in a proactive manner. So I would recommend that they just simply realize that their mission is to put the systems into place so that the people who are doing the work, hopefully it's not all on them. The people who are doing the work actually have a system in place that can be consistent that makes their job actually more predictable and easier.
Adam Larson:Well, and the other thing it makes me think about is if you have those solid systems in place, you have good foundation and things are working well internally, should one day you want to either go public or sell that business, having those things in place are a huge step up from other people who are having to rush and hire a bunch of people and get everything in order because they're all their ducks is in a row... Or ducks aren't in a row
Heather Bain:for lack
Adam Larson:of a better term. Yeah.
Heather Bain:Right. That's exactly right. So the company... The small public company... Or the small company I was working with that merged into a public company, they were doing the ISO series of, you know, documentation of all their processes.
Heather Bain:So they were really they were really working hard to make sure that they had the consistency that would help them be able to just easily roll their work into a public company.
Adam Larson:Yeah.
Heather Bain:And and so that's how they were able to actually go in and get maximum dollar. They they received maximum revenue for their business. I would say price for their business.
Adam Larson:Yeah. Mhmm. So, you know, we've been talking a lot about internal controls, and I can't not mention, you know, IMA is one of the sponsoring organizations of COSA, which is the committee on sponsoring organizations. You know, they've, they have a internal framework, they have an enterprise risk management framework, they have all these different frameworks that have been put out there, you know, and there's an, IMA is not the only organization that helps sponsor it, you know, and, and so maybe we could talk a little bit, where does that, where does that framework kind of fit within, with everything we've just talked about? And then why do you think so few businesses or small small business owners have even heard of it?
Heather Bain:Okay. Well, it fits in perfectly because it is already a framework of how businesses can tighten up their processes and make sure their data is very accurate, as accurate as it can be. It even is a framework that is usually used to help prevent fraud. It also makes it very easy if a small business is one of those types of businesses that needs to have a... Either a review or an audit every year.
Heather Bain:It makes it so much easier to hand that off to an auditor. And they're gonna pass usually pretty well because they already have their documentation that they need. So it is... It's great to use the framework that Coso has. And and when I was teaching at university, I I taught an auditing class.
Heather Bain:And so we used the framework, but it was a mnemonic CRIME, which is, you know, the the c is the communication and the risk assessment and information and the control environment and the monitoring and all of that. And and it spells out crime. Mhmm. And so we were supposed to be reminding that it also prevents the fraud and and, you know, really serious errors in reporting that can happen. So I think the reason that small businesses don't implement it and they don't necessarily know about it is that they haven't taken an auditing class or They an had their very basic accounting classes as part of their business degree.
Heather Bain:Or if they're engineers, they didn't even have that in their education plan. So they're kind of winging it anyway in the accounting department. And if they don't have a CMA on staff who's very well versed or someone who's taken an auditing class and just that bubbles up to the top of their mind at the time, then they're not really going to have the exposure. So having a CMA on staff or outsourcing to someone who's a CMA, some of those tasks will really help internal controls tremendously.
Adam Larson:I mean, that's that's amazing. And it was funny because you were you were mentioning, you know, about the small business and what they should be doing. And the next thing I was gonna ask you was like, hey, you know, if somebody's just listening to this and they wanna fill in some gaps, what did they do? And I think you've already asked the... Answered the question.
Adam Larson:They should get somebody who's trained in these things like a CMA, who's actually done the work. You know, there's also courses out there about the framework that you can take and get understanding. You can go directly to the Pro- So's website. Can download the actual report. You know, IMA has, all the different sponsoring organizations also have courses that you can take, you know, so we'll make sure to put some of these, we'll put some of these links in the show notes for anybody who's listening and interested in learning more to, you know, get into that framework because it sounds like this is like, this is the, this is the foundation that you need as an organization owner to make sure that your business is being run and fit and you're not...
Adam Larson:You're presenting fraud. You're preventing all these things we've been talking about.
Heather Bain:Right. Right. And like you mentioned, it's just you're really reducing your risk of loss. Mhmm. Or or false reporting.
Heather Bain:Just not knowing where you are, not knowing how much your your company's actually worth. That's a huge thing. Especially like you mentioned, if you're going to sell... You know, if you have an exit strategy, if you're going to sell your company or merge your company or pass it down to heirs, you wanna know what your company is worth, and you have to have accurate reporting for that.
Adam Larson:Yeah. You do. So, you know, as as... You know, this has been a a great conversation. I think it's really eye opening because a lot of small businesses are struggling more than probably they want to let on because, you know, they wanna be successful.
Adam Larson:They wanna keep going. But yet, our... You know, I think your goal and my goal is to, like, make sure that they have the tools they need, you know, so they should be looking out. You know, what would be that first step tomorrow if there's somebody saying, hey. I wanna turn things around.
Adam Larson:What's step one tomorrow? You know, obviously, besides the obvious reason of, hey. Call a CMA and get them in your business. What's what's a what's a good first step for those people?
Heather Bain:First step is start tracking.
Adam Larson:Okay.
Heather Bain:Just start tracking what you're already doing right. Catch yourself doing some things that are right and and catch yourself doing maybe some... Know, when it's a loose process, track that too. Just write it down. Having clear roles written down for every person.
Heather Bain:That's a huge thing because that's going to help you implement your internal controls through the the COSO framework. When you're doing your monitoring, your risk assessment, and your control environment, you need to know what those are. What is your... What are your main risks? Are you...
Heather Bain:Who's handling your your cash and your payroll and your inventory, that's how you would be able to even start implementing the framework. And and I would say once you at least get that ball rolling, then make sure that you go right to the Coso website or contact the CMA, somebody who can help you understand what the process of developing the internal controls, monitoring the internal controls, and then continually tightening those up will look like.
Adam Larson:So when you're... When you say track, are are you saying just start tomorrow and just start tracking going forward? Do you try to backtrack at all to see what you've been doing, or do you say, hey. Let's just go forward and see how we're doing right now? What does that
Heather Bain:look like? Go forward because what's funny is that when you start... They've even proven this with dieting. If you start tracking, you start doing better already.
Adam Larson:Okay.
Heather Bain:So if you start tracking what you're doing, you don't wanna look like you aren't doing good things. Right? So you'll immediately change some of the things you're doing just so you don't have to write down the bad things.
Adam Larson:Now that's... It's interesting that you say that. You know, now now does... Would somebody be tempted to only write down the good things and not write down the bad things they're doing so it looks better than what they're actually doing? Because, you know, you should write down everything so that way you can weed out the things that might not be bad, But they might not know it's bad, so you should write down everything.
Adam Larson:Right? Because like...
Heather Bain:Right. You should write down everything. Because sometimes it's just a a minor tweak that you just... You're gonna just need to make a small change to what you're doing. Mhmm.
Heather Bain:Sometimes it's just really the wrong thing to be doing and you could eliminate that.
Adam Larson:Sure. Sure. Alright. Well, Heather, this has been a wonderful conversation. Thank you so much for sharing, you know, your insights, especially with what it looks like for having internal controls within a small business.
Adam Larson:And just really appreciate you coming on the podcast today.
Heather Bain:Thank you, Adam, for having me. I really appreciate it.
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