Optimizing the financial management of your company is the right step to compete in your sector.After all, the financial health of the company depends on how its assets and liabilities are managed, both in the short and long term. Make no mistake: the entrepreneur who ignores the organization of his finances will soon face a problem.
And to remind you to invest time and resources in your finance department, we have 7 tips to help you make your future ambitions more favorable.
Why optimize the financial management of your company?
Before we begin, it is critical that you, as a manager, understand the importance of keeping your company’s financial controls in order and under control so that we can move on to the practical side of optimization.
The management Financial is the strong point of the company, which is determined to maintain its production. With this control, it is possible to pay employee salaries on time, purchase supplies from suppliers, meet commitments, and carry out marketing strategies.
In addition to financing short-term actions, it is through the correct management of financial resources that the organization is able to plan its future projects, such as expanding production or opening new units. The viability of the business is also monitored by these controls, where we can easily observe the quality of the results obtained in a given period.
How to optimize financial management?
Thus, the relevance of financial controls for the maintenance of business operations in the short term, as well as for planning and long-term investment actions, is evidenced. Here, check out the top 7 tips on how to improve your financial management process to optimize business results. Do not miss it!
- Evaluate the team’s qualification
The first thing that should guide the optimization of financial management is to check the skill level of the professionals who work in the financial department. How many of them have a college degree? Do they know how to use management software or how to handle computer programs? Are they interested in training courses? You should seek answers to these questions, as many obstacles in the work process are related to the lack of training of the team.
Assess the people involved and set aside a portion of your budget to promote the training. By investing in training, you provide the ideal environment for good management practices to spread to all employees, increasing the quality of workflow in this area. If you don’t have the resources available, be flexible and encourage your employees to seek new skills.
- Create time tables for your balances
Having up-to-date information on your company’s financial numbers is an analytical tool that will help you make quick decisions . Therefore, having a timeline for financial statements is a way of looking at the future of the company and being prepared for any changes in the market.
Asking the accounting department for monthly or quarterly financial reports is always the right decision to boost financial management. The detailed evaluation of these financial statements will indicate the real financial status of the business and its development history, serving as excellent references for the decisions and actions of managers and other investors.
- Check the market projections
Market fluctuations directly influence the financial results of your company, whether due to changes in the stock market or in the habits of your customers. That is why you should never stop projecting the future of your industry. In addition to optimizing your financial management, you will be able to evaluate your brand and how you can improve your products or services.
If you have an aftermarket sector in your company, it will be invaluable and a great source for information on market moods. Being able to identify seasonality and other variations in demand over time helps to better understand consumer buying behavior and which items most affect their purchase decision, allowing the design and implementation of action plans for the benefit of their company.
- Understanding your cash flow
It’s an old lesson, but one that can never be ignored. Nothing can escape the control of the financial activity of your company. For example, accounts payable and accounts receivable must be fully aligned to avoid forgetting to collect or pay vendors. It is incredible that there are still midsize companies that make serious mistakes in managing cash flow.
Can you imagine offices with piles of invoices on an employee’s desk waiting for the owner’s authorization to make the payment? It seems impossible, but that is the scenario in many companies in the country. So don’t go down that path. Adopt methods to streamline the financial management of your company. Create positions of trust that can manage cash outflow. In this way, the company will not develop with a philosophy of mistrust.
- Make selling to bad payers more difficult
Selling is always important, but receiving is even better. There is no point in forcing sales to delinquent customers. At the end of the month, the cash shortfall can be considerable and you will have to take out bank loans, meaning you will lose money. Developing a procedure that makes it difficult to sell to clients who do not pay on time greatly helps the financial health of your company.
The programs such as CRM are excellent allies in this process because they provide greater control over the history of the customer with the company and help delineate its profile by attending other sectors (such as sales, service to the customer, production, marketing) information relevant to your job
- Have financial control software
There will be no streamlined financial management through the use of endless papers and spreadsheets that are not shared by the team. In addition to slowing down workflow, the use of outdated resources also increases the risk of document loss and leaks of sensitive information about the company, its customers, partners and suppliers.
In such cases, the company may be subject to sanctions related to the General Data Protection Regulation (GDPR), which stipulates heavy fines for this type of data loss and other sanctions. Therefore, your company must adopt a financial control program that can be related to other administrative activities of the group.
The software will make it possible to carry out bank reconciliations and issue electronic invoices and bank payment vouchers, as well as control the entry and exit of resources. It will also allow the interconnection with the commercial department, and the registration of supplier and customer data. This information is displayed on the screen and can be followed online by managers and business owners.
- Develop strategic planning
The tips we’ve presented so far only make sense if they are grouped into a larger planning , called strategic planning. The managers of the company are in charge of developing this plan, and they need to create it from the information collected within the organization itself and its field of action, trying to direct all the productive resources of the company towards a certain objective or future goal. .
Without this direction, the activities carried out lose their analysis parameter and the organization as a whole is left adrift. Therefore, gather your entire team and establish, in financial terms, what objectives, strategies and operations must be observed to optimize financial management and make the business more efficient and profitable.
Based on our advice, understand that your dedication to the finance department is essential to the smooth running of your business. This is not to say that you should be extremely jealous and centralize all your decisions. Rather, it should be open to employee input and technological advancements.
Take care of your financial management and you will surely achieve good results, since the lack of organization can compromise the health, maintenance, competitiveness and permanence of your business in the market.
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