From cash flow analysis to automating back-office tasks, adopting these three best practices will keep small business owners on the road to success.
Successful businesses may get their start by coming up with a great idea for a product or delivering a service in a new way. However, innovative ideas and a welcoming market aren’t enough to keep a business growing.
That takes effective management, especially when it comes to the bevy of key financial tasks that have to be handled to operate a business.
How you handle your company’s cash flow, meet your payroll needs and set up your back-office operations to run efficiently can make a huge difference in whether your business will thrive or just get by, dogged by problems borne of ineffective financial management.
Here are three financial practices that will keep your business on the road to success.
Focus on Your Cash Flow
Cash flow is a key factor to keeping your business running smoothly, and managing it effectively is crucial to success.
Some 82% of U.S. businesses fail because of cash flow problems, according to online business trends portal Visual Capitalist. 29% of those businesses fail because they run out of cash altogether.
If you’re still cutting checks by hand or using limited financial software that doesn’t provide a real-time, future-facing snapshot of how much money will flow in and out, there’s a better way to operate.
That’s where an online cash flow management system like FINSYNC’s can help. The software can send out invoices to your customers immediately after you’ve fulfilled your end of the transaction, as well as manage and forecast cash flow, among various other accounting tasks.
Such systems optimize your accounts receivable and accounts payable processes in order to ensure that your bank balance is sufficient to fund payroll or other large expenses.
Let’s say you’re a retailer. Effective cash flow analysis can help you plan ahead and seek extra financing to avert a projected shortfall or get access to the funds needed to add seasonal workers ahead of the holiday shopping season.
Sync Up Your Financial Accounts
Staying on top of your company’s finances can be a challenge, especially when you’re busy handling everything else that your business needs to function. Often the task is left to a bookkeeper or, in the case of a small business startup, the owner — when they can find the time to spare.
Armed with off-the-shelf accounting or spreadsheet software, you do your best, but it’s often a scramble to keep track of receipts you’ll need when it comes time to file your business tax return, or invoices that have yet to go out, or even your own utility bills.
Inaccurate financial tracking ultimately costs your business money and undermines your ability to plan for next month and beyond. Avoid this pitfall by syncing up your business’ financial accounts.
Software like FINSYNC links up all of your financial transaction-related functions, including paying bills, tracking bank deposits and withdrawals, invoicing clients, and cutting paychecks, so that all of your transactions are tracked automatically.
How does this help? In addition to streamlining your financial data tracking, integrating your accounts will give you a comprehensive view of your costs. That’s essential in gauging the health and profitability of your business.
Automate Back-Office Tasks
The technology that allows for the integration of financial transactions and other data can also be leveraged to optimize your back-office tasks, which can save you significant time and money.
Intuitive software goes beyond just connecting various transaction data, and can be used to automate various back-office tasks, including paying bills, invoicing clients electronically and processing payroll.
Automating your invoicing process will also help your business stay on the path to growth by making it easier to collect payments. Overburdened business owners often struggle with this simple task — especially when they still rely on paper invoices that must be mailed.
In addition, an online invoicing system can help you set up a recurring invoicing schedule, along with automatic reminders and alerts to notify customers when payments are due or past due.
The automation approach simplifies the payroll process as well because it can be used to track the hours that employees work every week. That data makes it possible to consistently generate paychecks that are in compliance with tax withholding requirements.
Wondering if your contractor should actually be classified as an employee? Have a question about calculating benefits? Payroll can be complicated on a lot of different levels. The best payroll software is backed by live support in the form of a dedicated, U.S.-based representative that you know by name.
When you set up your payroll within an accounting platform like FINSYNC, which syncs up all of your small business finances in one place, taxes are calculated automatically. This automated bookkeeping not only saves you a significant amount of time, it can also dramatically improve the accuracy of your payroll.
So what are you waiting for? Implement a few changes and get back to what got you in business in the first place.