The Best Resources for Managing Small Business Finances

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No matter the size or level of operation, every successful business relies on sound financial management. To accurately implement strategies, avoid debt, and allow for future growth, a business must stay on top of its finances. Having an up to date and accurate record of a companies' incomings and outgoings can be a challenge for small businesses, as it relies upon constant and meticulous attention to detail. Small businesses that do not yet have the capacity for an in-house financial team can achieve this financial security through the implementation of the right resources. The list below outlines some valuable assets small businesses can use to stay financially stable. 

1. Automate the Pay Roll 

Wages usually make up a large proportion of the outgoing costs of a small business. Staying on top of this particular overhead is not only crucial for accurate financial assessments, but also for employee morale. Organizational inconsistencies, such as tax mismanagement, or incorrect over/undertime payments, can alter the attitudes of a workforce, potentially damaging productivity, and staff loyalty. Once those have gone, it's challenging to get them back. Zenefits offers automated and integrated payroll software to ensure administrative errors do not affect staff and company relationships.

2. Create Cash Flow Charts 

It is easy for information to get lost in the sea of numbers on a spreadsheet, which can be a confusing and misleading resource. A cash flow chart, on the other hand, makes finances visual, displaying all incomings and outgoings in one place, to ensure the critical information is accessible in a quick and simple form. A cash flow chart will show what a business does with its money, to allow for better informed strategic decisions and more streamlined internal operations. A simple way of setting up a cash flow chart is to use a template on Microsoft Excel. 

3. Introduce Regular Financial Reporting 

Employing some traditional bookkeeping techniques, such as granular reporting, will allow a business to accurately manage their risks and cash flow. Small companies will likely benefit from identifying key performance indicators and monitoring these through monthly reports. Reports can be used to identify productivity within the context of past, present, and future growth predictions. There is a variety of reporting software on the market to suit a business's needs. 

4. Track Expenditures and RIO 

Measuring the predicted vs. actual return on investment will help businesses to determine how effective their outgoings really are. Tracking the ROI of each expenditure will allow a business to decide which investment is worth continuing or where money could be used for efficiently. Tracking ROI requires some simple calculations, so it can be determined with the use of specialist software (or just excel). 

Tracking and managing a business's finance is not simply a good practice, but a necessary one. A company must be able to account for its expenses, cash flow, and revenue to maximize profits and grow its operation. Just because something is vital, it does not mean it has to be a costly and time-consuming drain of resources. Employing the right resources will allow this process to be quick and straightforward.