Small business owners face no shortage of challenges and uncertainty during their first years of operation. Even the most skilled and well-prepared startup founder may find themselves unsure what questions to ask and which actions to take at times.
The first thing you’ll want to consider is your current financial management. Are you solely responsible for keeping track of all income and expenses? As a business grows, you can’t underestimate the importance of a financial professional. Rather than just staying on top of your current finances, a reliable CFO will help you project where your business is headed and effectively strategize to maximize revenue.
In order to keep your business’s growth on track, make sure you ask these three financial questions.
How long does it take for us to close out our books?
If your billing and expense management isn’t streamlined, you’re going to struggle in the long-run. As businesses evolved, the importance of automation increased exponentially. Automated financial record-keeping ensures that calculations are always accurate, important data is consistently filed and results are easily accessible and reported to ensure swift response times and strategic planning.
You need your business’s financial information updated and accessible at all times to ensure proper calculations and expert reactions. If you’re currently waiting for someone to manually calculate and log everything into a spreadsheet, you’re risking both company time and money. When money is tight, what’s your best course of action? Should you take out a merchant cash advance as short term solution for working capital crisis? Working with the right staff will ensure that questions like this don’t threaten your entire operation’s longevity.
Automated record keeping and financial tracking also reduces the risk of human error and makes you look less suspicious to auditors. When an algorithm and computer is doing the heavy lifting, there’s nothing to hide or accidentally overlook.
Are we still using Excel?
Microsoft Excel is a thing of the past. Spreadsheets still serve an important role in data calculation and reporting for many businesses, but it’s easy for Excel to hinder your financial tracking and growth. Corporations usually have their own accounting system, but it’s customary for business owners to rely on a familiar program like Excel for reports and forecasting.
Accountants and financial professionals probably won’t phase out Excel anytime soon, but you can ensure that you’re always working with the most recent version of the program and using the best practices including isolated tasks and ancillary reporting.
How do we develop and manage our operating metrics?
Take a look at your current operating metrics and ask if there’s any way to integrate your financial information. Many systems and software are now fully capable of incorporating financial analyses into operating metrics to provide a more concise and developed overview of a business’s outlook.
Merging your financial data with your company’s operational metrics will save time and make it easier to identify untapped opportunities and track important information like product shipments, stock and customer acquisition. When you have easy access to your financial data and understand its correlation to everyday operations, calculating the risk and potential benefit of a business loan alternative becomes much easier.
Metrics can diminish or entirely eliminate anomalies and calculation errors, so you can worry less about fact-checking and free up time to focus on real figures and their implications.
Make sure that financial planning isn’t separate from your business strategy. Automating finances, incorporating fiscal analyses into operating metrics and streamlining your record keeping will allow for a smooth growth and transition as your business continues to expand.