As a financial services and accounting firm, we’ve seen a pattern of issues that plague companies of all sizes. Some of these can be easily rectified while some require deeper introspection. Without further ado, here are 5 common problems and their solutions to make your finance function more robust and insightful.
Outdated accounting software Old software makes finance inaccessible.
The reason old software is bad is purely because it is old. It is past its prime but stays alive because some financial professionals do not bother to keep up with the latest trends. There is a lot of outdated accounting software that is neither user-friendly nor mobile-compatible. If in 2023 you cannot manage your finances from your smartphone or access vital information with just a single click you need to update your software.
Our recommendation: Upgrade to a cloud-based accounting system. You’ll not only enhance your team’s productivity but also stay ahead of the curve. Just remember to choose a system that fits your business requirements and don’t be tempted by complex ERP systems unless they’re truly necessary.
Financial performance reviews are not a priority: Regular assessments lead to gradual improvements.
Examine your core financial reports every month. As your business expands, it’s essential to monitor your Profit and Loss statement, Balance Sheet, Cash Flow statement, and other important reports. Analyzing your current performance against previous periods helps you identify trends and make smarter decisions. You can gain amazing insights by comparing P&L statements from one period to another. Want to know how prepared your business is for the future? Get a forward-looking cash flow forecast as well as a budget to actual variance report to get a better grip on your financial health.
Not having a financial plan in place: No Plan, No Budget? How is that working for you?
Our proposal: Create a financial plan using Excel. Ambitious businesses need a robust plan, and developing one will encourage valuable discussions among your team members. Once you have a budget in place, monitor your progress with variance reports to ensure you stay on track.
Chronically delayed bookkeeping
If your bookkeeping is consistently late, it’s likely due to a lack of a well-defined calendar. Familiarize yourself with the rhythm of your F&A department and set up a timetable for invoicing and payments. Establish calendars for payroll, invoicing, and payments and stick to them through rain and shine. This builds a discipline that trickles into every function. Try it. We promise this will change your operations for the better.
Always worried about cash
They say ‘Cash is king’ for a reason. Cash is the lifeblood of any business, and any delays in the cash flow process will leave you stressed. Traditional advice recommends having 3-6 months of cashflow reserves on hand, but one month is a good place to start. You will be able to meet payroll and honor cheques – both of which are important metrics to keep your credibility in the market. Focus on obtaining a bank loan if necessary. This will help you avoid the chaos and trouble that comes with constantly having to check whether you have cash available.
Succeeding as a business is not easy. There are hundreds of factors – many not in our control – that can impact your bottom line. The right habits, however, can make this difficult ride a lot more fruitful. At Finout, our goal is to help businesses overcome these procedural financial hurdles so they can spend time serving their core customers better. Need help? We’re always here for you.
Conclusion:
Finout, One the Best Financial Advisors in Hyderabad frees entrepreneurs like you from tedious financial tasks so you can focus on the core mission of your business. Using proven processes and our in-the-know expertise, we ensure your company’s finance function runs smoothly and provides you with the right information to make the right business decisions. We offer a fresh, modern approach to accounting that turns your finance function into a powerful tool that delivers insight and drives your growth.
Traditional accounting firms are limited to helping you meet compliances. But what about growth? What about essential data to make key business decisions? Traditional firms are not designed to deliver to companies run by ambitious teams. That’s where we come in. We use our collective experience to help you navigate obstacles and red tape. We are your financial advisors and Tax advisors Hyderabad and our expertise is at your disposal.
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