Keeping on top of your finances is a critical part of keeping your business on track. But are you doing everything you can to optimise your financial management?
In this series, we’ll look at some key ways to optimise your business, exploring different avenues to evolve your enterprise and create a legacy you can be proud of.
Let’s see how you can better control over your financial numbers.
Having the right numbers at your fingertips
One of the biggest causes of business failure with new startups is poor cashflow and a lack of capital. Having enough money to cover your expenses, pay your workforce and invest in growth is what separates the successful businesses and those that fall by the wayside.
But what can you do to improve your cash position and keep yourself in the driving seat when it comes to managing the financial side of the business?
Here are five simple things you can to get more proactive with your finances:
Embrace financial technology and cloud accounting
Make sure you’re using cloud-accounting solutions like Xero or QuickBooks, with integrated bank feeds, expense tracking, simple invoicing and a real-time view of your numbers. You can also use the advanced reporting features to get deep insights into financial performance.Use financial metrics and KPIs to monitor performance
Develop a framework of financial key performance indicators (KPIs) including gross profit margins, operating expenses, customer acquisition costs and revenue growth rates. By tracking these metrics, you can gauge your performance, spot any financial threats and make well-informed decisions about your financial management.
Forecast your cashflow position and potential challenges
Use the latest cashflow forecasting tool to track your expected cash inflows and outflows. These projections give you an overview of your cash position for the months ahead, allowing you to top up your cash as required. It’s also sensible to build up some meaningful cash reserves, so you have capital behind you when cashflow gets tight.
Work on your aged debt and debtor management
It’s important that customers pay on time and that your payment terms are clear. Use your accounting software to send out automated reminders and have structured follow-up procedures in place for overdue payments. It’s also a good idea to offer early payment incentives and to nurture strong customer relationships to minimise your aged debt and improve cashflow.
Get strategic with your working capital and access to finance
Having a viable level of working capital in the business is a must. Explore the various financing options for boosting your capital. This can include business lines of credit, invoice financing or term loans to, all of which help to increase funding and raise the company’s capital.
Talk to us at our Urmston office about ways to improve your digital transformation
There have never been more tools to help you manage your finances. By embracing the best in financial and accounting tools, you give yourself (and your finance team) the superpowers to become cashflow positive, with capital behind you to drive your business to new heights.
If you’re looking to upgrade your financial management, come and talk to us. Our team will suggest the ideal accounting tech stack and the best ways to control your numbers.
