Let’s start at the beginning, the definition of financial management- Financial management is an essential decision-making aid for a business. The strategy of a business is based on the data that is gathered from the operation of financial management. It is also financial management that allows you to analyze your company’s financial data in order to measure its health and performance.
While doing business is fun and exciting, if you neglect the financial management of your business, it may not last long! It is therefore essential to develop marketing strategies to increase sales or employ cost reduction tactics to ensure good management of your finances and the long-term health of your company.
So how can you improve your corporate financial management? Here are some tips and resources to help you maintain excellent financial health.
Know your market, your company, your strategy and stick to it!
Our first advice may seem obvious but it is rarely used! Knowing yourself and your target is the key to good profitability.
The company’s strategy must be carefully considered and must be followed by all of the company’s employees. Obviously, we can make changes. On the other hand, keep in mind that if you have defined a judicious strategy from the start, you have no reason to change course, even if it does not bear fruit immediately. Be patient!
For example, our development strategy at BLC-Conseil is essentially based on digital inbound marketing. This technique consists in bringing our client to us without the need to canvass him. For this, we have implemented a lot of digital media including our blog. We only started to get the results of our strategy several months after our efforts! As a result, we continue to feed our digital media for more results.
Acquire Cloud Software
The financial management of a business requires a lot of data. Unless you have an accounting background, managing this information can quickly become complex. This task is all the more difficult because of the amount of data to be processed daily: it is easy to lose the whole day. Fortunately, you can avoid all of this by investing in cloud-based accounting software.
A cloud system guarantees access to your financial data anytime, anywhere. In addition, it allows you to automate several tasks related to the financial management of your business, including tracking expenses and sales. Thanks to precise and real-time information, you better understand your financial situation and you are in a better position to make the necessary corrections.
Control your invoicing
Invoice management is one of the biggest challenges for retailers, especially those working in the B2B business. Late payments and overdue accounts can greatly affect your finances. Using a cloud system, you can keep track of your unpaid bills. In addition, respecting the deadlines for sending your invoices encourages their payment within the prescribed time.
To promote the settlement of invoices, it is strongly recommended to specify payment conditions from the start (taking care to highlight deadlines). In this way, you have the legal tools to recover your debts when the accounts are overdue.
The items stored in your warehouse and their turnover rate have a significant impact on your profitability. Thus, an inventory management system that automatically tracks inventory levels is a must for companies that deliver physical products.
Using a cloud-based inventory management system allows you to view the inventory of each item while obtaining real-time data on sales trends. With this information, you can effectively predict seasonality and control your inventory levels. Stock-outs for your most popular items are becoming a thing of the past, as are unnecessarily tied up in stocking inventory at low turnover.
Identify daily expenses
Do you know the overhead costs that affect your bottom line? If you do not have the funds to pay fixed costs such as employee salaries, rents, services, and insurance (not to mention hidden costs such as permits, licenses, and taxes!), You risk experiencing financial difficulties very quickly.
Cloud accounting and personnel management systems help you keep track of your recurring costs to get a clearer picture of how your expenses are distributed. This allows you to stay within the established budget.
Prepare a plan
Using the best financial management resources is ineffective without formulating an action plan for the business. Your financial data should clearly frame expansion plans, marketing initiatives, and large projects. By consulting this information on a monthly, quarterly and annual basis, you are able to assess the reality in relation to the financial objectives of the company.
In addition, this level of planning and vision helps you establish realistic budgets for each aspect of the business. By comparing the returns on your various expenses, it becomes easy to identify cost reduction initiatives. For example, if a print advertising campaign is more expensive than an SEO campaign and moreover, it generates fewer customers, it is wise to eliminate this expense. Using accurate information to guide business decisions gives you better financial security.
Use financial management forecasting tools
Forecasting tools are based on the objectives to be achieved, for example, budgets. Excel is today one of the references to keep your budgets up to date. However, if the budgets speak to everyone in Excel, it is necessary to update them with the new data which can come from several sources (accounting software – invoicing software – Excel file – etc ..).
This task is often performed manually by a person from the company and sometimes even by the company director. This is where we reach the Excel limit! How much time do you waste each month, week or semester updating your budgets? Sometimes even by copying errors into your Excel table!
Our advice is to automate this task with the decision tools that will update your budgets leaving you with only the most important task: analysis!