Getting on top of your finances, balancing your books, and squeezing out higher profit figures are key elements that successful businesses possess. Indeed, without a core focus on the cash coming in and going out of your company, you’ll be left in the dark regarding how you can improve upon your current business model, pricing, and service. In this short article, you’ll learn how to better manage your business’s finances, enabling you to focus back on reducing your overheads, boosting your sales, and generating higher profits for your business.
Hire a CFO
Having expertise by your side can help you when it comes to managing your finances. If you can hire a Chief Financial Officer to work with your company’s financial data, you’ll be able to delegate much of the work, and the thinking, to a professional who knows exactly what patterns to look out for in your balance sheets. Hiring a high-grade CFO can be difficult, as these skills, and the experience necessary to help your company, are in short supply. As such, you may find you have more luck in poaching another company’s CFO to help you with your own finances.
When it comes to the pure numbers inside your business account, you should be running these through any one of the hundreds of accounting apps and websites available for your business. Some of these programs are free; others, with more features, cost a little in monthly subscription fees. In either case, here you’ll have a simple run-down of your financial figures, which you and your management team will be able to consult instantly if you have financial queries or concerns. With the numbers run automatically, synced to your accounts, this can save you hundreds of hours a year in accounting labor.
Understanding Your Stock
Remember that the amount of money in your company account is only one reflection of the cash you’ve made over the course of your business’s lifespan. The other part of your investments – or a significant amount of the money you’ve spent – is tied up in stock. These capital investments, all of which you can expect to shift on for a profit at a later date, need to be added and considered in your overall financial performance review. You can use an inventory management software to help you determine the amount of stock you have in your warehouse – and its value when sold.
One of the main difficulties in driving ever-higher profits is in taking down the costs through which you and your business operate. You may be focused on making as many sales as possible, but these will mean little if you’re paying off a portion of your profits towards other businesses, third parties, and outsourced agencies that are charging for promoting your products. Take a step back and consider what you can do to cut all but the essential running costs of your business. From there, you can make long-term strategic investments that matter, all while running a tight budget across the financial year.
There you have it: some key tips to help you better manage your business finances.