Many successful businesses find success through the combination of hard work, smart planning and a knack for wooing new customers. A little good luck now and again doesn’t hurt, either. Unfortunately, none of these variables can overcome poor financial management. Having a comprehensive, accurate view of your company’s financial operations can help you avoid this common pitfall.
For startups or small businesses, this job is often left to some combination of accountants, bookkeepers or, in many cases, a business owner with few financial management skills beyond the ability to juggle spreadsheets. Getting the accounting end of your business right is critical, not just to remain on a steady growth path, but to survive.
Innovations in financial software are helping small and mid-size companies manage their finances, streamlining repetitive tasks for their accounting staff and reducing costs in the process. Fintech is increasingly becoming an indispensable tool for forward-thinking companies that want to remain competitive.
With a new year around the corner — and tax-filing season not much farther — now is an excellent time to consider how technology can bolster your business’ accounting practices and help keep your company growing in 2020.
A Wealth of Data
Getting an accurate and complete handle of your company’s finances is easy when you use software that syncs up your financial transactions in one place. This can help optimize a variety of accounting tasks, including processing payroll, making payments, invoicing clients and managing cash flow.
Such a platform syncs up all of your financial accounts and automatically tracks all of your key transactions, including bank deposits, withdrawals, invoices received and paycheck processing, among others.
This approach provides a real-time view of your business’ financial health and frees up your bookkeeper or accountant from hours of entering data into a spreadsheet, not to mention time spent tracking down invoices or trying to determine whether a supplier was paid.
Streamlining the gathering and access to your financial accounts also helps avoid bookkeeping errors that could lead to significant, avoidable costs. And it makes it easier for you or your accountant to focus more time on gleaning insights that could help improve how you plan for next month and beyond.
Cash Flow Management
Small businesses are more vulnerable than most when it comes to managing their cash flow. Tracking the money flowing in and out of your business is easier and more effective when your financial tasks are linked, giving you a more comprehensive view of your company’s expenses and revenue. This is key to avoiding potential cash flow problems that could leave you scrambling for funds to cover necessary expenses.
One way that intuitive online tools can help with cash flow is through automated invoice timing. While customers may not always pay on a timely basis, using a platform that automatically sends out invoices on a set time schedule can at least set the stage for you to receive payments in a way that supports your cash flow needs. You can also set up automatic reminders and alerts to notify customers when payments are due, or past due. The opposite approach opens the door for invoice issuance delays at a time when your business is in critical need of cash.
Integrated financial payment software makes it easy to track, make and receive payments from a single platform. Some payment platforms will even allow you to pay rent and other traditionally cash-only expenses with a credit card. The ability to use your credit card to cover these types of expenses can go a long way to free up cash flow for crucial outlays like payroll in those months when your finances may be a little tight.
Automating Accounting Tasks
The use of cloud-based financial software can help you streamline your accounting tasks while increasing your company’s productivity. Forget cutting paychecks by hand or navigating multiple spreadsheets to ensure employee pay is in compliance with tax withholding requirements. An integrated financial platform enables you to automate these tasks, reducing potential errors.
Integrated tools can also be used to automatically track the hours worked by your employees. Time-tracking software eliminates the data entry associated with physical methods of keeping tabs on employee work hours. This time-tracking data can also help minimize errors when generating your payroll every month, and calculating payroll taxes. You’ll also get a more accurate tally of your labor costs, including any overtime.
Help When You Need It
Another way to improve your company’s ability to meet its accounting needs is to hire a bookkeeper or accountant, if you don’t already have one in your employ. Not every small business needs a full-time accountant, or even a bookkeeper. And while automating accounting tasks can help, sometimes you’re going to need a professional to look over your accounts and provide guidance on how to improve your operations or ensure that you’re prepared come tax time.
One option to consider is hiring a financial professional on a freelance basis. Let’s say you’d like to enlist the services of a bookkeeper. Working remotely through the use of online communications software, virtual bookkeepers can access your integrated financial software to maintain the general ledger, pay bills, cut checks to employees and contend with past-due accounts, among other tasks.
Hiring a virtual support professional is less expensive, because you don’t have to pay for health insurance, sick days and other costly employee benefits. There’s also more than money to be saved in this scenario — enlisting a virtual bookkeeper or virtual accountant to handle or review your company’s financial tasks frees you to focus on other areas of your business.
A variety of online companies that connect freelance workers with employers are making it easier than ever to find a qualified virtual bookkeeper or accountant.
Savvy business owners find ways to streamline financial management tasks so they can maintain focus on growing their company. To do so consistently requires ensuring that you’re getting the most accurate picture of your financial situation, and that you’re managing your finances properly. If this is an area you’d like to improve, turn to integrated financial software that can help keep your company growing into 2020, and beyond.
Eddie Davis is the VP of Business Development for FINSYNC, a consolidated cash flow management platform focused on helping businesses grow. FINSYNC’s intuitive online tools help automate payments and accounting, and provide valuable insight through cash flow analysis. The lending network gives businesses access to fast, affordable financing. FINSYNC’s virtual community of specialists provides unrivaled support with bookkeeping, accounting, human capital management, financial analysis and corporate strategy. Connect with Eddie on LinkedIn and follow @FINSYNC on Twitter.