Whether you’re a small- or medium-sized business, managing and controlling your finances is an integral part of operations. Proper financial management ensures you can keep in control of day-to-day payments, be more efficient and better prepared if and when financial problems occur.
In order to maximise success and improve business transactions, we are exploring a range of practical steps that small and medium businesses can adopt to help them better manage and control finances.
One: Have a clear business plan
Every business, no matter their size, should have a detailed business plan which outlines the goals they want to achieve, the time to achieve them, and most importantly a clear framework to their finances. The latter will ensure your organisation is more aware of what they are liable to pay in taxes, expenses, salaries and other unexpected miscellaneous payments which may occur.
Two: Keep on top of payments
According to the Capgemini World Payments Report 2019, non-cash transactions globally will top 1,046 billion by 2022 – equating to a compounded annual growth rate of 14 per cent and confirming the increased usage of tap and go payments and online transactions. As money is moving quicker than ever before, it’s important to know where your money is moving to.
Those responsible for the businesses’ budget must be familiar with how money within the business circulates. Whether it’s monthly rent, quarterly office expenses or that yearly tax bill, keeping track of money coming and going will help assess the areas in which need more assistance or the areas you’re having the most success. Using and analysing data can also enable a business to keep on top of spending and making sure they aren’t overspending.
Three: Know your people
Having a team of professionals can really assist with managing your finances; they should be trustworthy, skilled and experienced. Whether this means having an expert on a short-term or part-time basis or having a regular finance member, they can help determine where your business is heading, can guide you along the way and also offer peace of mind.
Four: Invest in technology
In order to become or stay number one in your chosen field, it’s imperative to stay up to date with new technological advances. With so many different options available from software technology or digital platforms, choosing the right one can assist many businesses better manage their finance.
If you’re seeking a platform to be more specific with your finances, you could choose to invest in a booking software which can help when it comes to paying tax, developing budgets for projects and understanding your financial position. Alternatively, if you want to keep track of spending, improve how you pay and manage your bills, personal finance management applications which are easily accessible from the App Store or Google Play can help anyone stay on top of their bills and outgoings.
Five: Have a back-up plan
We know that sometimes things can go wrong and having a back-up plan in place can help ease the blow. Whether you are or aren’t expecting events such as fluctuating sales, off-peak seasons, a change in your businesses income, ensuring you have other options in the pipeline can help keep your business on track. The options include having a credit card to depend upon, creating an emergency fund, applying for a business loan assess, or which other choice best suits your needs and capabilities.
If you haven’t already made sure your finances are a fundamental part of your business strategy, these tips will help you better manage your money and thrive in business.
Deborah Southon, Director, FSA Group/Easy Bill Pay