Check out five tips to start 2020 with organized company finances, reducing risks and preparing the ground to seize opportunities. Just keep reading!
Micro, small and medium-sized entrepreneurs are already working on their plans for next year. In fact, many entrepreneurs are optimizing their business planning with technology. The new solutions are also efficient in controlling finances. It cannot be denied that from year to year, the need for more detailed planning is increasing. In this situation, management is tested and the use of a performance management system cannot be delayed anymore. Every company that is late in applying the latest technology will be left behind and get the consequences later. The use of technology is mandatory and must be adapted to the real situation on the ground.
To overcome the challenges in the management of small and micro companies, we give tips.
Costs and goals
Establishing fixed and variable costs, as well as company revenues and making a balance sheet is essential to start listing priorities and establishing short, medium and long term goals. In this way, it is possible to identify needs such as investment in marketing, the purchase of new products for inventory, schedule the payment on time of all suppliers and avoid being blindfolded in the actions of the business itself.
Financial planning is a projection for a predetermined period of expenditure and income and is very effective for comparing forecasts and what has actually been accomplished. This control is essential for the maintenance of the business and to make sure that the growth is maintained over the months, with no surprises along the way. In addition, this step in the plan helps to visualize the resources that will be needed and where the money will come from.
Financial planning is not fixed as it changes according to the scenario and the company’s learning and it is also not 100% accurate because it depends a lot on external factors. Therefore, we recommend that entrepreneurs make three possible projections for each situation, namely: an optimist, a conservative and a pessimist.
Another tip to consider is to have a forecast for emergency expenses and leave an amount saved for these cases. This brings extra security in financial planning, should any unexpected situation arise. Preparing for the worst possible company is key. This is the key for a company to survive when unexpected incidents occur. There is always risk and we should have predicted everything.
Management with technology
At the end of the planning, the entrepreneur continues with the task of monitoring the cash flow daily, with each entry and exit, to ensure that the business is doing well and according to what was stipulated. This control can be automated with the help of financial management systems. It provides quick and easy data entry and, at the end of a stipulated period, generates personalized reports and assists in visualizing the health of the business.