In tough times all businesses are looking for ways they can improve their business finances, and rightfully so, poor finances can spell disaster!
So if you’re like most small business owners, you spend the majority of your time managing daily operations, keeping customers happy, and looking for new ways to grow. Chances are you are not spending hours of your time reviewing spreadsheets, cash flow analysis, and financial projections.
However, measuring profitability, creating realistic budgets, and planning ahead for the future are crucial to your success. So we have put together some no brainer tips that will help you improve your business finances and make managing your business easier.
Move to the cloud
How much of your time do you spend hunting down financial documents, poring over spreadsheets, and tracking expenses?
Constantly searching for and trying to integrate scattered data makes it nearly impossible to close out the monthly books quickly and efficiently. Plus, reliance on spreadsheets is a proven liability. Research shows over 88% of all financial spreadsheets contain errors.
Manage your business finances faster and more accurately by moving them to the cloud.
Cloud-based financial management systems have several benefits, including:
- Integration with all your other operational systems for the quick retrieval of the most current data;
- Automation of daily financial processes so you can step away from spreadsheets;
- Efficient expense tracking that improves accuracy and reduces revenue leakage; and
- Easy collaboration with team members and stakeholders.
Conduct regular financial reviews
Experts agree that vigilance is key to effective business financial management. Each month, set aside time to review your balance sheet, profit and loss statement, and cash flow statement.
Regular monthly check-ups will give you actionable insights into your business performance and growth potential. By reviewing this regularly you can take corrective action and change your financial outlook, rather than waiting until the end of the year and realising you’ve made a significant loss.
This information is also crucial for:
- Projecting future revenue, cash flow, and expenses
- Validating major purchasing decisions
- Anticipating and mitigating risk
- You’ll need this key data, too, if you ever want to apply for a loan to expand and grow your business.
If your business is your livelihood, it makes good sense to ensure you know exactly what is going on with it financially. This will help ensure there are no nasty surprises.
Bring a professional on board
On the surface, hiring an experienced bookkeeper or accountant may seem pricey, but their expertise could mean considerable long-term gains for your business. They can make ongoing recommendations that could save you thousands every year, improve your business performance and identify opportunities, meaning you are likely to be far more successful than going it alone. So think of it as an investment in your business.
Plus, most small businesses don’t need full-time professional help. Part-time services are typically enough to help you manage crucial processes, plus a few extras, including applying for a business loan or overdraft, articulating and adapting your business plan and managing sudden growth – for example, hiring new staff, acquiring office space, or determining when to introduce a new product or service.
Final tips
Consider enrolling in a basic bookkeeping or accounting course so you can better understand the fundamentals of business financial management. The knowledge you gain will feel empowering, and can help clarify discussions with your accountant. Alternatively if time is precious find yourself an accountant who will take the time to explain to you in plain English what your financials show and how you can translate them. This means you can monitor things far easier over the course of the year.
Self-education is also key when it comes to investing in financial IT. Be sure to do your research and consult an expert before investing in any new accounting solutions for your business.
Your knowledge, combined with professional support, is the very best route to sustainable, effective business financial management.
If you would like help on understanding your financial better check out our old blogs below. Alternatively give us a call on 9380 3555 and let’s grab a coffee and review your business finances. At the Free, no obligation meeting we will help you there and then address one of your most pressing financial concerns.
Insights from your Profit and Loss