In these difficult times, it is more important than ever to manage financial resources and decisions effectively. Competition among businesses is higher than it has ever been before and with ever-tightening budgets, here are some tips to keep your financial management as secure as it needs to be.
Use a business system
Possibly the most effective way to manage financial resources is to use a business management system such as ERP (Enterprise Resource Planning). An effective ERP system will help you control and understand your business needs better, from purchasing to planning. These business systems are designed to crunch the numbers, so it leaves you with far more time to concentrate on all-important aspects, like making all those decisions, selling and marketing.
Ensure you are marketing correctly and to the right prospects. It is even more important if you are a niche business with a smaller target segment, make sure you are reaching your audience effectively, rather than wasting time, money and resources on a marketing campaign that will not yield the desired results.
Continuously monitor your business's success and financial position. You must keep an eye on your targets, in line with your business plan and if you are not meeting them, do not overspend to compensate. This is where an effective ERP system can assist you because it can tell you which areas have the highest expenditure and which has the highest ROI.
To achieve growth investments into resources need to be made. During periods of growth, it is vital to keep an eye and tight control over expenditure and revenue. Make sure you review and evaluate business plans, objectives, productivity and processes regularly for continue effective growth and always make investment decisions based on the appropriate business intelligence.
Minimise overdue invoices
Getting paid on time will help with cash flow management. If you are not able to manage this area of the business, you may not have enough money or resources to expand, grow or pay your suppliers. Conversely, you must also keep up to date with all your costs and know how much exactly your day-to-day expenditure is. You must know the minimum amount you need daily and make allowances to keep the books balanced.