Business finances – a topic of conversation that often comes up nowadays. Why? Well, the state of the world right now isn’t great. Many companies across the world are still recovering from the impact of the pandemic and many households are struggling to make ends meet.
With fewer people spending, it means budgets are reduced and sales are likely lacking. However, in order for the world to continue spinning, it relies on people spending money and making money.
Keeping track of your own business finances is important and something to be particularly mindful of in 2023. With that being said, here are some top tips for tracking business finances in 2023.
Hire a talented finance team
First and foremost, consider who you have on your finance team. Are they doing enough to save you money while also spending it effectively? There are some finance members that might be delivering and others may be lacking the skillset or knowledge to really make a difference to the company finances.
With that being said, you might look at training any staff that are currently not delivering on expectations. For others, it might be a case of filling the gap with the right financial talent needed to bulk out the team.
If you’re a small startup, you might want to outsource your financial needs as a business until you’ve gotten to a point where you can hire internally full-time. Whether it’s in-house or outsourced, it’s essential to have a great team in place to look after the company finances carefully.
Make use of intuitive software
Technology is a wonderful thing and something that many businesses have found to be a game-changer. With that being said, it’s important to make use of any tools and technology that will help keep track of your finances and find ways of helping keep your money in order at all times.
Quickbooks is typically one that’s used by startups and solo entrepreneurs who may be running a business in its early days. There are plenty of other platforms to make use of for the bigger corporations. These include:
- Zoho Corporation
Investing in this type of software is definitely something you want to consider if your finances aren’t exactly in a good way. Be sure to make comparisons to the financial software you’re looking at investing in before you go spending your money. Many of these options offer great 14-day trials or free demos.
Identify pain points in your finances
You’ll find pain points occur in all of business but when they’re identified in your finances, that can cause some more serious problems.
What are those pain points for your finances? For example, it could be a common problem of cash flow. The cash coming in is not coming in fast enough for all of the expenses going out.
It could be a problem with late invoice payments and improving the processes that ensure all invoices are being paid early or at least on time.
Identifying these pain points in your finances is going to help greatly when it comes to keeping track of your business finances in 2023.
Have an emergency fund available
There’s nothing more important than a rainy day fund. Rainy day funds are often something that most residential households have for when something goes wrong and it’s an expense that can’t immediately be covered by that month’s wages.
Emergency funds should also exist within your business. Why? Well, the pandemic was a prime example of a business suffering financially, not just from income but also from the costs that were needed to keep the business running every day.
An emergency fund is helpful to have tucked away for when it’s needed. You never know what could happen in the future, after all, so it’s important to have a fund in existence. It’s something to treat as another expense each month and while you might not be able to put lots in it each day, it’s something that you could definitely trickle into every month.
Make use of business credit cards
Whether you’ve got multiple employees making financial decisions on a daily basis or you have employees who are going out to represent the business, credit cards are important to set up and helpful in tracking business finances.
Of course, you don’t want to hand these out freely and they should only be given to those that need to make regular expenditures.
If you’ve got staff who are often on the road, servicing clients or transporting goods from one place to another, it’s worth looking at the benefits of using a business gas card.
Business gas cards are great to have in place, especially when it comes to keeping track of your business finances. They’re a great way to give your employees to freedom to fill up on gas as they go while recording all of their expenses through the card itself.
For your finance department, it’s a good way of keeping everything in one place and tracking each individual’s fuel expenses when they head out onto the road.
As a business, it means you can set guidelines, limits, and policies that ensure your employees are using these cards in the right way rather than taking advantage of them.
Review business expenses closely
Your business expenses are something that needs to be reviewed regularly and with a detailed eye. It can be easy to let your expenses run riot, especially when you’ve got team members who are a little tap-happy with their business credit cards.
Look at how your expenses are doing each month and identify any areas of concern with your finance team as and when they crop up. You might want to set spending limits for certain employees and only provide the ability to expense certain expenditures depending on what rank your employee is on right now.
Reviewing your business expenses is something you don’t want to drop the ball on, especially as it can be the reason for a business struggling financially as a result.
Assess department budgets regularly
Be aware of department budgets regularly. It’s important to be mindful of which departments require the bigger budget and which ones might be spending too much that it’s causing problems with your profit margins.
There are departments that will need to maximize all of the funds they’re given each year, whereas others might not need all the funds they’ve got access to.
This might change over time, which is why you want to assess department budgets regularly and look at allocating funds from one place to another when it’s needed.
Make sure that you’re sitting down with the department heads when it comes to budgeting because you don’t want to take away funds that are very much needed. It’s a line of communication that always needs to be constant when it comes to changing or adjusting department budgets.
Digitize all of your financial records
When it comes to tracking business finances, it’s important to consider how you’re storing these financial records. Ideally, you want to digitize all of your financial records, especially in this day and age where the digital world is dominant. Having paper receipts and records can easily get lost or damaged if you’re not careful.
Consider digitizing your records and in general, look at a digital transformation for your business if it’s a little outdated when it comes to technology. Embracing technology is a must when it comes to existing as a company nowadays.
With these tips, you’ll be able to easily keep track of all your business finances in 2023.