Are you feeling overwhelmed with all the tasks that need to be done in order to improve your business finances?
It can seem like an impossible task, especially when you don’t have a large team to back you up. But it doesn’t have to be.
In this blog post, I will discuss some time-saving tips that will help you get your finances under control. We’ll cover everything from cash flow management to utilising your team to their best ability. You may be worrying about everything else on that to-do list, but don’t worry – these are quick steps for you to follow amongst your day-to-day processes.
Get Your Cash Flow In Hand
One of the most important things you can do to improve your business finances is to manage your cash flow. This means knowing when money is coming in and when it needs to go out. It sounds simple, but it’s essential for keeping your business afloat.
Too many business owners are hung up on revenue and profit but these aren’t actually the most important numbers.
A great place to start is mapping out all of your fixed costs, like rent and utilities, as well as your variable costs, like marketing and travel expenses. Then, track your actual spending against your budget on a regular basis. This will help you identify areas where you may be overspending and make adjustments accordingly.
Understanding the movement of every penny in your business bank account means keeping an eye on it weekly, monthly and quarterly. This ensures you can piece together a net cash flow both short and long-term.
Things will fluctuate, but those quarterly numbers should start getting better and better. It’s one of the most critical aspects of your financial help and once you’ve set up a process to manage it – it should not take chunks of time out of your day.
Utilise Your Team To Improve Business Finances
One way to save time and get those all-important results is to utilise your team when planning ahead. This means delegating tasks and giving employees a chance to evaluate sales progress.
The bigger picture is one that often gets missed. Employers don’t like talking money with their team, but it can actually be one of the most useful ways to implement new strategies and boost motivation within the company.
Once they can see where they fit in managing cash flow and drawing in sales, they will be in a better position to help improve your business finances. Brainstorming sessions are a fantastic way to get everyone on board and invest in the future of your business.
Set aside an hour a month to focus on these points:
- Generating revenue
- Measure outgoings & discuss how you could work on capital gains
- Further investments in the company
- Funding of cash
Make Just 1% Adjustments
You may not see the results you want overnight, but making small changes can have a big impact on your business finances over time.
A simple 1% change to your rates can be made in a number of areas. It’s barely noticeable to consumers but makes all the difference to your cash flow.
- Increase the price of products or services
- Increase the volume of products or services you provide
- Direct costs – find cheaper alternatives for materials and labour
- Lower running costs
- Customer journey – reduce the time it takes for customers to pay
If you’re feeling lost when it comes to where to start, try thinking about what one per cent changes you could make in each area. It doesn’t seem like much, but if you can just a small adjustment somewhere – you will notice it in your next statement!
One of the most common issues businesses face that impact cash flow is overstocking. This can be particularly difficult for companies that experience seasonal lulls but is important for everyone selling items to consider.
The key is to stay on top of your stock control and only order what you need when you need it. There are a number of software options available to help with this, so do your research and find one that works for you. Having control and the ability to manage it will free up some cash but put you in the best place to cater to consumers.
Another way to keep control is by considering seasonality when planning ahead. If there are certain times of the year where business is slow, make sure you have enough cash set aside from boosts early on in the year to cover any dips in revenue. This will help avoid any financial surprises down the line.
Other ways to approach stock control include:
- Set a minimum level and only reorder when you hit the boundary
- Just-in-time delivery avoids the excess stock build-up
- Dedicate a team member to review stock daily or weekly and keep a strict tally
Dedicate Time To Bookkeeping
Instead of answering emails, why not put an hour or so a day to good use and set aside dedicated, uninterrupted time for managing cash flow or getting stuck into bookkeeping. Whatever it is – forming a new habit will ensure you never lose track of incoming and outgoings.
Especially as an SME business owner, this job can often fall down to you. It doesn’t have to take forever to improve your business finances – nor is it rocket science. Just a few dedicated minutes a week can be the difference.
Benefits of this include:
- You will have plenty of data to compare and areas for improvement will be much easier to notice.
- You increase the chance of picking up errors in spending that can be rectified early on.
- You’ll have more time to chase invoices and keep statements up to date.
- You may mitigate the need for outsourcing finance services and save on another cost.
The Bottom Line
There are many ways to improve your business finances, but these are some quick and easy steps that will save you time in the long run. Managing your cash flow, utilising your team and making small adjustments all play a part in getting your cash under control.
In these unprecedented times, it’s vital for businesses to be resilient and able to adapt to rapidly changing circumstances. Without having your finances and cash flow in order it’s going to be very hard to manage. Unfortunately, this can become one of the key areas business owners neglect.
Taking the time to create viable financial processes and employing a strong accounts team will, therefore, not only improve chances of business survival, but will enable you to emerge stronger as markets recover post Covid-19.
Implementing even just one of these tips can make a big difference to your bottom line. So what are you waiting for? Get in touch for more advice.