One of the biggest reasons any business succeeds is due to great finance management. When you manage your finances properly, your company will be stabilized,. You will be able to avoid bad financial habits that can harm or even ultimately bankrupt your business.
If you want to maximize your bottom line, you need to have a carefully crafted finance management plan that you will stick to and optimize as and when necessary. If you’re still new to the business world, this might look daunting, but with the right strategies, it’s simpler than you think.
Use expense management software
Doing business comes with certain costs, and keeping track of them is a big part of finance management. Tracking expenses starts when an employee submits their report for out-of-pocket purchases and ends when a manager approves reimbursement for those expenses.
Large enterprises with many employees automate this process, but a lot of small businesses still go through the process manually. To increase the efficiency of your financial processes, you should invest in expense management software and reap all the benefits that come with it. Some of its benefits include:
- Making processes faster and simpler. Instead of using paper documents with attached receipts that go hand to hand, you can simply automate the workflow. As soon as an employee submits their report, it’s sent to the person who can approve it and automatically reimburse the employee.
- Eliminating errors. Human error is unavoidable, but you won’t have to worry about data-entry errors when you use the software. Not only will this software flag errors and duplicate entries, but it will also notify the manager if the amount on the expense report seems too high.
- Increasing operational efficiency. One of the easiest ways to maximize your cash flow is to bill expenses directly to clients and settle employee reports in due time. When this process is simplified, employees can spend more time on other important tasks.
- Improving visibility. Your software will come with a dashboard that displays all of the employee expense data via charts, graphs, and other easy-to-understand visual formats. You can easily see important metrics, such as how much your business spends per employee.
Hire a finance coach
Business coaching is an industry that’s really exploded over the last couple of years and professionals everywhere are seeing the benefits of hiring a coach. As much as 68% of individuals who hired coaches were able to make back their investment, and many professionals agree this is a smart investment.
A special branch of business coaching is finance coaching, and if you’re serious about your finance management, you need a professional who will provide you with a coaching session. Don’t shy away from it – the more you learn, the more you’ll earn (or save).
In this session, you will learn how to manage your finances so your business is as profitable as it can be. You might not realize how big of a story your financial data has to say, and the right coach will help you understand that financial data as well as use the knowledge you gain to take your business to the next level.
Some of the things your finance coach will help you do are find money leaks, check your company’s profitability, plan your taxes, and create a financial plan.
If you don’t know where your business has been leaking money, you won’t know exactly how much you waste. But when someone points those leaks out to you, you can plug them up and keep as much money as possible.
A staggering number of businesses operate at a loss but don’t realize it because they have high sales numbers. With the help of a coach, you can easily track whether you’re making a profit. Also, when you know exactly how profitable your business is, you will be able to estimate every upcoming tax bill and avoid any unpleasant surprises.
Finally, a financial plan details all the financial goals you’re trying to accomplish. When that plan is formalized, you will have more direction. Just make sure to track your finances regularly so you make sure you’re meeting your goals.
Don’t forget about Excel
In this world of modern technology, it’s easy to forget about older software and disregard it just because you think the newer technology is making it obsolete. But sometimes, that’s not the case, especially with a program such as Microsoft Excel.
Accountants have been using Microsoft Excel for decades now because there’s nothing better than spreadsheets when it comes to managing basic accounting tasks.
With Microsoft Excel, you can:
- Compare multiple databases. You can compare financial databases and tract recurring costs to know exactly where your money is going on a weekly or monthly basis. You can also use it to create groups of customers to see which group generates the most revenue.
- Enter data automatically. Financial data entry tasks can become much easier and more efficient thanks to Excel macros. If you have any tasks that you do repeatedly, you can automate them with macros. A macro is an action or multiple actions that you can run as many times as you need.
- Create reports. You will be able to make template-based reports that will be customized to your needs and show data in any form you want such as charts and tables. You will also be able to add more data points to your templates without creating new ones.
Excel can be an extremely valuable program for your organization, but only if you know how to use it. If you want to ensure your entire staff knows how to use it correctly, you can hire an Excel expert to teach them how to use the software. This will eliminate any second-guessing about Excel functions and equip your team with enough knowledge to manage the accounting properly.
Additionally, you need to know there are certain things you should master for Excel automation of data processing. Remember – the more you automate, the less time you’ll spend on these tasks and have more time for more important processes.
Don’t be afraid of loans but watch your credit
Loans can sometimes feel intimidating, but they are a necessity. After all, as your company grows, you’ll need to purchase additional equipment, property, insurance policies, and other necessities. And most of the time, you’re going to need to take out a loan to do so.
Taking out loans can be beneficial to your business; you just have to make sure you pay off your debt in time so your credit score doesn’t suffer. If you have bad business credit, it will become much more difficult to take out new loans in the future.
Business finance management sounds like an intimidating term, but once you get its ropes, you will be surprised at how easy it is. Of course, a successful business finance management strategy will depend on your personal goals, but these strategies can be applicable for every company, no matter the niche.