If you’re like most small business owners, you are likely to spending a majority of your day managing the day to day operations, keeping your customers happy, and furthering your businesses growth.
While spreadsheets, cash flow analysis, and financial projections may not be your first passion they are essential for you to be able to measure your profitability, create budgets and plan for the future. Therefore all of these components are crucial to ensure your professional success.
To ensure you are able to get a handle the numbers, and take control of your finances, consider the following four simple steps:
Move to the cloud
How much of your daily time is spent hunting down financial documents, tracking your expenses and studying spreadsheets?
Constantly looking for missing documents and attempting to integrate them, has proven detrimental when trying to close the monthly books in a fast and efficient manner. A heavy reliance on spreadsheets can also have major consequences as it has been found that nearly 88% of financial spreadsheets contain some form of error.
Therefore, by moving your finances to the cloud it will allow for more efficiency and accuracy when managing your data.
There are many positives to cloud based accounting, 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 minimise spreadsheets;
- Tracking expenses to improve accuracy and reduce 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. Therefore, each month set aside time to review all of your balance sheet, profit and loss statement, and cash flow statement for the current period.
Regular monthly reviews will give you further insight into your business performance and it's potential for growth. This information is crucial for:
- Projecting future revenue, cash flow, and expenses
- Validating major purchasing decisions
- Anticipating and minimising potential risks
This data will come in handy, if in the future you want to apply for a loan to expand and grow your business.
Bring a professional on board
While hiring an experienced bookkeeper or accountant may seem initially to pricey, their expertise could potentially bring long-term gains for your business.
A technical financial expert can optimise the efficiency and accuracy of your finance management, therefore giving you peace of mind and more time to continue growing your business.
Plus, most small businesses don’t need professional help full-time. A Part-time services is usually enough to help you manage crucial processes, plus any extra services that may come up. This may include applying for loans, adapting your business plan or managing any sudden growths within the business.
Consider enrolling in a basic bookkeeping or accounting course as will have a better understand the key elements of managing your businesses finances. The knowledge you gain will feel empowering, and can help clarify discussions with your accountant.
Self-education is also key when it comes to investing in any online financial services. Before investing in any accounting software, be sure to consult a professional and conduct research about it.
By combining your knowledge along with professional support will give you the best options to ensure effective and sustainable management of your finances.