Running a business has become more challenging than ever in today’s fast-paced world. Entrepreneurs have to look after operational tasks, marketing activities, investment opportunities, and, most importantly, finances. It doesn’t matter if you own a public limited company or a multi-national giant; staying on top of all money-related matters is crucial.
The question is, how to upskill your finance department? Truthfully, having a team of finance and accounting experts won’t be enough. The upcoming technological advancements have changed the way how companies handle their finances. Instead of having multiple bookkeepers, they prefer automating the entire process through smart software solutions.
Similarly, artificial intelligence and machine learning provide predictive analysis of all financial projections. In turn, you can get an accurate picture of the company’s direction in the next few years. Failure to keep up with these innovations can become a major setback for your business. After all, it is essential to handle money wisely. Let us help you understand if you’re new to the entrepreneurial world.
Here we have highlighted six tips for businesses to streamline their finance department.
Table of Contents
1. Focus on Operational Excellence
When we talk about operating with excellence, it’s all about going beyond the standard reporting metrics. It means you must focus on the financials and the company’s accounting side. For that, understand the difference between accounting vs finance and expand your horizons. The accounting side of the business is all about record keeping and ratio analysis. To understand performance, you must monitor inventory turnover, payable days, and interest cover.
At the same time, a business’s financial aspects are directly linked to profitability metrics, meaning you must keep up with gross profit margin, net profit, and much more. Incorporating different metrics in your analysis will give rich insights into the company’s operations. As a result, you can implement strategies to promote excellence.
2. Streamline Cashflows
As experts say, business cash flow can make or break your business. After all, not having enough cash available can drown the company into a liquidity crisis. How about you install a simplified cash management system? Consider choosing an automated account payable system to reorganize your payments with a solution that processes your payments automatically. It will allow you to track funds easily and eliminate the risks of incorrect payment amounts.
Besides that, these systems offer accurate cash flow forecasting. It can forecast your expenditures and revenue, identifying the areas that consume a significant portion of the cash. Staying hands-on with cash flow problems will help you plan for financial needs accordingly. Above all, keeping the operations stable will save your business from the threat of a liquidity crunch.
3. Utilize Modern Software Solutions
Companies invest heavily in robotics and artificial intelligence to upscale business operations. Such implementations can lead to a considerable reduction in manual processes. Therefore, you must consider utilizing modern software solutions. You may take advantage of AI technologies to make more apt investment decisions. The AI-enabled app will analyze market trends, helping you buy and sell stocks at higher premiums.
Similarly, accounting tools can assist in preparing financial statements. All you have to do is record entries in the ledger, and the software automatically generates income statements and balance sheets. Besides reducing the likelihood of error, it will improve efficiency significantly. In turn, your employees can spend time on more meaningful tasks.
4. Go Paperless
Believe it or not, documentation is a crucial part of every business. From bank statements and customer receipts to bills, your shelves might be overflowing with these documents. As these papers pile up, they occupy more space, making the office look cluttered and messy. In addition, you have to go through bundles of papers to find one document, leading to a loss of productivity. So, why not go paperless and reduce the usage of documents in your finance department?
Going paperless saves you a lot of money on printer toner and paper, helping you use fewer resources while saving space in your office. It will also allow you to store your documents on the cloud, giving your workers immediate access to files whenever and wherever they want.
For instance, it can be time-consuming to review every document if someone wants to look for outflows in the month. Whereas with digital documents, it’s much easier to search for an amount, keyword, and phrase, saving you ample time.
5. Upskill Your Staff
Most people working in finance operate by the books and procedures assigned. Hence, they aren’t used to thinking out of the box nor like change. Therefore, one could say streamlining the finance department can cause stress for your workers. Some might find it arduous to adapt to technology, whereas others can keep lagging. However, with proper training, your staff can learn how streamlined processes can increase your business’s overall productivity and save time.
For that, you have to conduct training programs to optimize your team’s performance. Perhaps, you can teach them the basics of FinTech and its role in businesses. However, ensure to implement a structured program. It should be relevant to the workers and finance department that help workers equip with new skills.
Maybe you can also provide cross-training to help other workers temporarily handle financial operations if another team is unavailable.
6. Manage Your Expenses Wisely
Undeniably, managing bills and invoices seems like a daunting task, especially at the time of filing returns. Using software makes it easier to track invoices and customers who owe you money. Modern-day expense trackers allow businesses to create profiles for regular customer orders. As a result, you can schedule invoices and send them automatically once they place an order.
Besides that, expense trackers can also help with expense categorization, giving an insight into where you are spending money. You can also use accounting software to scan expense receipts and track information from scanned bills automatically. It eliminates the need to maintain paper receipts and the risk of losing them.
As the finance team plays a substantial role in every company, you must streamline the processes. However, remember that streamlining processes takes a leap of faith and persistence. After all, employees don’t welcome change quickly. Hence, upskill the staff and gradually implement changes to avoid resentment. In addition, take advantage of modern-day tech to further streamline financial operations.