As a small business owner, you want to make sure your finances are working for you. Oftentimes, this is easier said than done, particularly since the COVID-19 pandemic has wreaked havoc on business’ finances all over the world. While effective financial management was important in a pre-COVID world, it is absolutely vital now to ensure the success of your small business.
With this in mind, it might be time for you to reassess your financial management strategies and incorporate some new techniques to strengthen your processes. Below are three ways you can do exactly that.
1. Invest In Virtual Financial Controller Services
A financial controller is essentially your small business’ lead accountant. They are responsible for overseeing accounting activities and ensuring that ledgers are accurate and reflective of the company’s expenditures and revenue streams. These experts can help improve your financial management processes and provide much-needed support during this critical time by handling any of the following accounting and finance-related activities:
- Accounts payable
- Accounts receivable
- Bank reconciliations
- Analysis of ledger accounts
- Cash flow management
While these services have traditionally been administered in person, virtual financial controller services after COVID-19 are widely available. In addition to bettering your financial management techniques, virtually outsourcing to an external financial controller is beneficial in several ways: increased efficiency, improved confidentiality, strategic guidance, and lowered risk of fraud.
2. Track and Analyze Your Major Expenses
One of the most important steps to follow when you’re looking to strengthen your financial management processes is to keep track of your largest expenses. Closely monitoring your expenses is essential because it allows you to see exactly where your money is going and redirect funds to other initiatives if need be. For example, if you’re finding that your small business is spending too much money on real estate (e.g. renting office space), you might want to consider renting a coworking space instead to cut costs.
3. Invest In Growth
One of the most common and relevant finance management tips you’ve likely heard before is to invest. More specifically, it’s essential to invest in growth if you want to secure a prosperous future for your small business. Investing in growth conveys to potential investors, employees, partners, and clients that your organization is not only managing its finances effectively but that it is thinking about the future.
Given that the future is still incredibly uncertain due to COVID-19, these stakeholders will likely have an even higher degree of respect for the fact that you are doing everything in power to plan in spite of that.
Employees will value such action because it shows that you’re willing to invest in your small business and therefore into their careers. Customers will likely receive a higher quality of service as a result of the investment, which they will undoubtedly appreciate.
When you’re running your own small business, you have plenty of things to think about. Chief among your responsibilities is refining your financial management practices to ensure your money is working for you. By hiring a virtual financial controller, tracking and assessing your most prominent expenses, and investing in growth, you’ll strengthen your money management and, in turn, set your small business up for success.
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