Optimize your business invoicing, payments and other financial tasks with a few small changes that can get your small business financial management on the right track for 2020.
The learning curve for small business owners can be steep, especially in their first year.
Ideally, the early bumps help owners hone their entrepreneurial skills so that they can avoid bigger missteps later. However, some mistakes can end up going uncorrected for months or years, causing you a cascade of increasingly costly problems. Perhaps the best example of this is poor financial management.
Let’s face it, even the savviest entrepreneur may not have more than basic skills when it comes to managing their business’ finances. And many can’t afford or stubbornly opt not to hire a bookkeeper or other accounting professional early on.
A financial management skills gap may not hurt in the beginning. It can add up to more pain later as your business grows. Making tasks like invoicing clients, paying bills, handling payroll and managing cash flow much more onerous.
Getting your financial management on the right track can fix this. Start the new year off right by adopting a few best practices. Also embracing the technology-driven tools that can help you get your financial management on track for 2020.
Track Your Finances Accurately
The profit margins for small businesses leave little room for error. It’s imperative that you have an accurate, real-time view of all your financial accounts. Otherwise, you increase the risk that your carefully crafted budget won’t work as intended, or that you’ll miss a payment or overspend elsewhere.
FINSYNC’s cloud-based accounting platform can help you easily keep tabs of your business finances accurately by automatically linking to all of your accounts. This integrated approach reduces potential errors. It can be used to streamline tasks like paying bills, handling payroll and invoicing customers.
Focus on Your Cash Flow
An essential component of financial management is having a solid grasp of your business’ cash flow situation. Both in the present and in the future. It’s not an exaggeration to say your business’ profitability hinges on doing this well.
The big challenge for small business owners. Since their time is often consumed by so many other tasks that they end up making decisions with only a vague understanding of their cash flow. This can lead to problems at the worst time. Such as when you have to fund payroll or face another crucial expense.
The first step to staying ahead of such costly problems is to track your finances accurately. This will give you an accurate, real-time picture of your accounts that will serve as the basis for your cash flow projections.
Once you have a clear sense of what’s coming in and out, you can use FINSYNC’s suite of tools to set up accounting tasks in a way that helps maximize your business’ cash flow. For example, you can automate how you invoice your customers. Timing it so that you increase the chances of being paid in advance of big cash outlays, like payroll.
FINSYNC’s new payments option can also help improve your cash flow situation by allowing you to use a credit card to pay for expenses, like rent, that typically require cash or a check drawn from a bank account. With FINSYNC Pay, businesses only need an email to make payments with a credit card, and you never have to include your account numbers or other sensitive information.
Even with the best insight into your cash flow, sometimes you may end up falling short of funds in the event of a large, surprise cost, such as an equipment breakdown. That’s why small businesses should take steps to build an emergency fund. You may think you don’t have the financial flexibility to do so. All it takes is being diligent about setting aside some money every month to gradually build a financial cushion.
Tackle Your Debt
Businesses often rely on credit to operate day-to-day. This is a good strategy if you’re using a business credit card with cash-back options or other benefits. And if you pay off balances before they rack up interest. This can be difficult, leaving businesses carrying debt and creating a seemingly permanent line item in their monthly budget.
If making payments on loans or credit cards is choking off your ability to invest in necessities, it’s time to explore ways to start reducing that debt before it paralyzes your business.
Obviously, doing this requires having a budget that accounts for your business’ essential operating costs and minimizes unnecessary expenses. You’ll need any financial flexibility that you can squeeze out of your balance sheet to shrink your debt burden.
Another path to consider is to explore alternative financing options. This could help consolidate your debt, the goal being to lower your monthly payments.
Online lenders have emerged in recent years as a key source of financing for small businesses. These alternative lenders’ loan application process is typically far less onerous and lengthy than a traditional bank. And alternative lenders are more likely to offer financing to small businesses with higher risk profiles.
Businesses that use FINSYNC’s accounting and cash flow management software can easily apply for a loan free of charge and immediately receive offers from alternative lenders that are ready to extend financing.
Most small business owners eventually reach the point of needing to bring in employees to help keep their business running efficiently. This is good news, as it generally reflects a growing enterprise.
But adding employees also means incurring costs for wages and a bevy of other personnel-related expenses that vary with the size of the workforce. That makes hiring a potentially significant element of your financial management.
Advances in online communications and computer data sharing have led to an explosion in the number of jobs that can be done remotely. Sometimes by people on the other side of the country. It makes sense for small businesses to capitalize on this trend. It offers a less-expensive option than a full-time, in-house hire.
Not every position can be done remotely, of course. However, many can, including those that typically involve back-office or support personnel. Such as bookkeepers, accountants and human resources. Hiring a virtual support professional is less expensive. Since you don’t have to pay for health insurance, sick days and other costly employee benefits.
FINSYNC can connect your business with a skilled financial specialist that’s best positioned to help your business grow and thrive.
Plan Properly for Tax Season
The annual headache that is tax season is unavoidable, but there are steps you can take to make it less painful.
Being prepared early for tax filing season is part of a broader financial management best practices strategy. Much of this hinges on keeping accurate track of receipts and records that your tax accountant will need to shrink your business’ tax liability as much as possible. Using FINSYNC’s integrated platform can accomplish this seamlessly.
It’s also a good idea to enlist a qualified tax professional to check in periodically and do mini tax-related organizing sweeps of your business over the course of the year. This can help them spot potential savings or even things that you could be doing differently well before the tax year is over.
Remember, you can’t outwork poor financial management. It will undermine everything you do to grow your business. Relying on FINSYNC’s cash flow management platform will optimize your finances. Unleashing your business’ potential for growth in 2020 and beyond.