Keeping finances and numbers up to date is an integral part of running a business. Although for some the subject of finances may not be the most interesting, it is definitely one of the most important aspects.
If the accounts are not doing well, the business is not doing well. No matter how much desire and dedication we put into the matter.
There are many entrepreneurs who feel that their knowledge about finances is not enough to manage this aspect of their organization and we want, with this article, to try to give them a hand.
7 tips and good behaviors to keep your venture's finances under control
As we said before, finances are mandatory and necessary for the proper functioning of any company. Since we have to deal with them, we will try to help you to do it in the simplest and most intuitive way possible.
We will divide the tips into three groups according to the activity to which they are associated and we will see what each one is about. In this way, you can go by phases or simply focus on the ones that interest you the most or are relevant to your business.
Automation and digitalization
It's time for your business to take the step into the digital era. Here are some software that will help you in your day to day:
ERP
An ERP is a software for managing day-to-day activities. They are often also called invoicing programs since, technically, they revolve around it, although they are much more.
Not all software is the same, but the best invoicing programs include and allow you to connect all the departments of your company; from the warehouse to sales, through human resources. This way you can have all aspects of your company under control in one place.
As far as finance is concerned, they integrate with the bank, automate the control of movements and include them in the journal, notify us of taxes and help us to file tax forms.
Using an ERP means not having to worry about a large part of the finances of our business.
CRM
A CRM is a customer relationship manager. Through this software we can unify customer data, record their behavior and improve and centralize customer service.
Of all the interactions you have with your customers and potential customers, the most relevant data is stored there. This data can range from contact details, through their buying habits, the products they value most, to their degree of satisfaction with the company. You can generate reports or simply access the data of a particular customer in a few seconds.
At this point you are probably wondering what this has to do with finance. As you well know, customers are the main source of revenue. Without them, there are no sales, and without sales, there is no business.
Good customer service, efficient and fast sales and a segmented and personalized product help us to secure them. If we can simplify and automate this process, they will be satisfied and we will save time and money.
In addition, with the data from the reports we discussed earlier, we can create customized and personalized marketing strategies tailored to each customer. We can also have a more global idea of which customer profile was most attracted or finally made the purchase of a certain product.
Knowing the profiles and buying habits of customers can help us to consolidate current customers and to carry out actions that attract more customers with these characteristics, or focus them on a different profile and broaden the spectrum of our clientele.
Strategic management software
There is not (yet) an acronym for this type of software, but it is one of the most useful tools, although it is not yet widely used. We want to help to progressively eliminate this lack of knowledge and make them be used by more and more people.
This type of software helps us with the management of our company, helps us to determine the improvements, goals or objectives that we want to impose and to take the necessary actions to meet these objectives.
Once the objectives have been established, these programs help us to follow up on all the actions that are being carried out and developed. There are several types of this kind of software that focus on a specific aspect of management:
We can plan our strategy, globally control the development of the business and measure and improve how our strategy is being carried out through a Balanced Scorecard - BSC software.
Use a quality management system software to manage in a simple, fast and customizable way all the documents related to our company's quality management system.
Monitor the status of our facilities and equipment, so that we ensure that they are always in optimal condition and working properly.
Along with these listed, there are several other tools that can help us achieve our objectives through the strategic management plan.
Management software is not only limited to the private sector, it can also be of great help to those who need assistance in measuring, planning or reviewing their development plan in public management.
2. Planning and objectives
It is important to know your objectives in order to make an optimal planning. That is why we believe it is important that these two actions go hand in hand.
Set short and long term goals
We have previously talked about objectives and goals and how important they are. Let's delve a little deeper into the subject since they are a fundamental part of managing a venture.
We often think about success, about reaching the top and getting the most out of our business. That's fine, but we must keep in mind that the road to success is a long one and many businesses fall by the wayside.
Balance is the key. Neither long-term goals should be unattainable, nor short-term goals should be tiny.
In addition, our objectives must be specific and strategic. Strategic objectives are those that each organization aims to achieve over a period of time, usually longer than a year.
These strategic objectives include the actions taken to achieve them and the company's vision and mission.
Just as we must set ourselves objectives, we must also periodically check whether we are on the right track. KPIs or management indicators help us to do this.
They are not universal and not all comprehensive management indicators can be applied to our case, but we can choose those that best fit and help us to achieve our objectives.
They can be high level to measure strategic objectives or low level to measure more specific situations of departments or workers. Whichever it is, it is important to be clear about them and choose precisely which one to use to get the best possible result.
Expense control
Planning expenses and keeping them under control is key to good financial management.
We must know and monitor all the periodic fixed expenses: taxes, utility bills, leases, contracts, licenses, etc. Those expenses that, regardless of how much movement there is in our business, will always be there.
In an ideal situation, the level of expenses and income is always balanced or, even better, there is a surplus. We know that this does not always work this way, since, although we can try, it is very difficult to control or calculate all the income in a given period of time.
All the more reason to keep fixed expenses under control. In the case of income, everything that is not fixed is good news. While with expenses, it is the opposite, unscheduled expenses are the so-called "unforeseen".
Unfortunately, no matter how hard we try, it is impossible not to have unforeseen expenses. Having an enterprise implies having unforeseen events. And, since we cannot control them or know when they will appear, we must always be prepared.
Leaving a special contingency fund is the most common - and effective - way to deal with them.
3. Analysis and improvements
Collecting data for the sake of collecting data is nonsense. If we make use of management tools, such as those mentioned above, we will have in our hands a lot of information about our company, sales, finances and customers.
Today, data is the most valuable asset we can have. Although by themselves they have no value, if we know how to use them, they can mean a radical change for our business.
Study your company's data
Earlier we talked about objectives and KPIs. In addition to monitoring whether we are on the right track to meet our strategic objectives, we can also use them to make a general analysis of the current situation of our company.
Analyzing data is all well and good, but without something to measure it against, this data collection effort is wasted. KPIs help us to analyze the data in perspective and to see if the company is indeed taking the necessary actions to achieve the strategic objectives set and to be able to forecast the situation of our company in the future.
It is necessary to periodically review this data and compare it with the indicators, since a timely correction can avoid many problems in the future.
Study the market and analyze the competition
Depending on the market in which we move, we may have different ways to reach the top.
If we have an already established and populated market, with a lot of competition and several years of operation, our options may be:
Make a niche for ourselves in this market, try to stand out and thus gain ground and customers to the competition. This is already a highly contested market and the percentage of demand is already defined. The vast majority of the customers we win will be former customers of the competition.
Create a new market. By betting on R&D or with a totally new product, we can open up an unexplored market, with no competition, where we set the rules.
Obviously, the second option is the one that offers the greatest potential for growth and the most profit, but it is also the most complicated. Not everyone can afford to start from scratch, without the experience of others.
It is up to each company to evaluate its situation and product, and to choose the one it prefers or believes to be more profitable.
Propose improvements
Every business, venture or situation can be improved. There is always something that can be simplified, done differently or organized differently.
Starting from the data that management software provides, this improvement is made on a realistic and concrete basis. Analyzing data and reports correctly is one of the starting points for finding errors and solving them.
As mentioned above, the data together with the KPIs we use are an optimal way to have a general and realistic idea of the current situation of our company.
From these, we will see where things are not working as they should and how to transform them to channel and achieve our objectives.
All this is much easier with a management software that provides us with clear and reliable data, allows us a clear visualization, guarantees accessibility and facilitates the assignment of responsibilities. It could take us months to achieve what a program can give us in just a few seconds.
We have tried to cover a broad spectrum of areas and possibilities, so that these types are applicable to as many undertakings as possible.
To start by automating processes, so that we can devote more time and energy to the rest of the processes: planning what happens inside our business, analyzing data and the general market and, based on all that, proposing improvements to optimize our venture, is to think big and to promote the growth of our organization.
It is a basic, simple and universal scheme, but no less effective for that. If you follow these simple tips and adapt them to your business, there is no doubt that you will see improvements in a short time. In Pensemos we are experts in strategy planning and execution, if you want to know more about these topics do not forget to subscribe to our blog.
We have also developed a strategic management software that will allow you to achieve the level of organization you expect with your venture and will fit your needs. Contact us and we will advise you through the whole process of implementing the tool.
If the accounts are not doing well, the business is not doing well. No matter how much desire and dedication we put into the matter.
There are many entrepreneurs who feel that their knowledge about finances is not enough to manage this aspect of their organization and we want, with this article, to try to give them a hand.
7 tips and good behaviors to keep your venture's finances under control
As we said before, finances are mandatory and necessary for the proper functioning of any company. Since we have to deal with them, we will try to help you to do it in the simplest and most intuitive way possible.
We will divide the tips into three groups according to the activity to which they are associated and we will see what each one is about. In this way, you can go by phases or simply focus on the ones that interest you the most or are relevant to your business.
Automation and digitalization
It's time for your business to take the step into the digital era. Here are some software that will help you in your day to day:
ERP
An ERP is a software for managing day-to-day activities. They are often also called invoicing programs since, technically, they revolve around it, although they are much more.
Not all software is the same, but the best invoicing programs include and allow you to connect all the departments of your company; from the warehouse to sales, through human resources. This way you can have all aspects of your company under control in one place.
As far as finance is concerned, they integrate with the bank, automate the control of movements and include them in the journal, notify us of taxes and help us to file tax forms.
Using an ERP means not having to worry about a large part of the finances of our business.
CRM
A CRM is a customer relationship manager. Through this software we can unify customer data, record their behavior and improve and centralize customer service.
Of all the interactions you have with your customers and potential customers, the most relevant data is stored there. This data can range from contact details, through their buying habits, the products they value most, to their degree of satisfaction with the company. You can generate reports or simply access the data of a particular customer in a few seconds.
At this point you are probably wondering what this has to do with finance. As you well know, customers are the main source of revenue. Without them, there are no sales, and without sales, there is no business.
Good customer service, efficient and fast sales and a segmented and personalized product help us to secure them. If we can simplify and automate this process, they will be satisfied and we will save time and money.
In addition, with the data from the reports we discussed earlier, we can create customized and personalized marketing strategies tailored to each customer. We can also have a more global idea of which customer profile was most attracted or finally made the purchase of a certain product.
Knowing the profiles and buying habits of customers can help us to consolidate current customers and to carry out actions that attract more customers with these characteristics, or focus them on a different profile and broaden the spectrum of our clientele.
Strategic management software
There is not (yet) an acronym for this type of software, but it is one of the most useful tools, although it is not yet widely used. We want to help to progressively eliminate this lack of knowledge and make them be used by more and more people.
This type of software helps us with the management of our company, helps us to determine the improvements, goals or objectives that we want to impose and to take the necessary actions to meet these objectives.
Once the objectives have been established, these programs help us to follow up on all the actions that are being carried out and developed. There are several types of this kind of software that focus on a specific aspect of management:
We can plan our strategy, globally control the development of the business and measure and improve how our strategy is being carried out through a Balanced Scorecard - BSC software.
Use a quality management system software to manage in a simple, fast and customizable way all the documents related to our company's quality management system.
Monitor the status of our facilities and equipment, so that we ensure that they are always in optimal condition and working properly.
Along with these listed, there are several other tools that can help us achieve our objectives through the strategic management plan.
Management software is not only limited to the private sector, it can also be of great help to those who need assistance in measuring, planning or reviewing their development plan in public management.
2. Planning and objectives
It is important to know your objectives in order to make an optimal planning. That is why we believe it is important that these two actions go hand in hand.
Set short and long term goals
We have previously talked about objectives and goals and how important they are. Let's delve a little deeper into the subject since they are a fundamental part of managing a venture.
We often think about success, about reaching the top and getting the most out of our business. That's fine, but we must keep in mind that the road to success is a long one and many businesses fall by the wayside.
Balance is the key. Neither long-term goals should be unattainable, nor short-term goals should be tiny.
In addition, our objectives must be specific and strategic. Strategic objectives are those that each organization aims to achieve over a period of time, usually longer than a year.
These strategic objectives include the actions taken to achieve them and the company's vision and mission.
Just as we must set ourselves objectives, we must also periodically check whether we are on the right track. KPIs or management indicators help us to do this.
They are not universal and not all comprehensive management indicators can be applied to our case, but we can choose those that best fit and help us to achieve our objectives.
They can be high level to measure strategic objectives or low level to measure more specific situations of departments or workers. Whichever it is, it is important to be clear about them and choose precisely which one to use to get the best possible result.
Expense control
Planning expenses and keeping them under control is key to good financial management.
We must know and monitor all the periodic fixed expenses: taxes, utility bills, leases, contracts, licenses, etc. Those expenses that, regardless of how much movement there is in our business, will always be there.
In an ideal situation, the level of expenses and income is always balanced or, even better, there is a surplus. We know that this does not always work this way, since, although we can try, it is very difficult to control or calculate all the income in a given period of time.
All the more reason to keep fixed expenses under control. In the case of income, everything that is not fixed is good news. While with expenses, it is the opposite, unscheduled expenses are the so-called "unforeseen".
Unfortunately, no matter how hard we try, it is impossible not to have unforeseen expenses. Having an enterprise implies having unforeseen events. And, since we cannot control them or know when they will appear, we must always be prepared.
Leaving a special contingency fund is the most common - and effective - way to deal with them.
3. Analysis and improvements
Collecting data for the sake of collecting data is nonsense. If we make use of management tools, such as those mentioned above, we will have in our hands a lot of information about our company, sales, finances and customers.
Today, data is the most valuable asset we can have. Although by themselves they have no value, if we know how to use them, they can mean a radical change for our business.
Study your company's data
Earlier we talked about objectives and KPIs. In addition to monitoring whether we are on the right track to meet our strategic objectives, we can also use them to make a general analysis of the current situation of our company.
Analyzing data is all well and good, but without something to measure it against, this data collection effort is wasted. KPIs help us to analyze the data in perspective and to see if the company is indeed taking the necessary actions to achieve the strategic objectives set and to be able to forecast the situation of our company in the future.
It is necessary to periodically review this data and compare it with the indicators, since a timely correction can avoid many problems in the future.
Study the market and analyze the competition
Depending on the market in which we move, we may have different ways to reach the top.
If we have an already established and populated market, with a lot of competition and several years of operation, our options may be:
Make a niche for ourselves in this market, try to stand out and thus gain ground and customers to the competition. This is already a highly contested market and the percentage of demand is already defined. The vast majority of the customers we win will be former customers of the competition.
Create a new market. By betting on R&D or with a totally new product, we can open up an unexplored market, with no competition, where we set the rules.
Obviously, the second option is the one that offers the greatest potential for growth and the most profit, but it is also the most complicated. Not everyone can afford to start from scratch, without the experience of others.
It is up to each company to evaluate its situation and product, and to choose the one it prefers or believes to be more profitable.
Propose improvements
Every business, venture or situation can be improved. There is always something that can be simplified, done differently or organized differently.
Starting from the data that management software provides, this improvement is made on a realistic and concrete basis. Analyzing data and reports correctly is one of the starting points for finding errors and solving them.
As mentioned above, the data together with the KPIs we use are an optimal way to have a general and realistic idea of the current situation of our company.
From these, we will see where things are not working as they should and how to transform them to channel and achieve our objectives.
All this is much easier with a management software that provides us with clear and reliable data, allows us a clear visualization, guarantees accessibility and facilitates the assignment of responsibilities. It could take us months to achieve what a program can give us in just a few seconds.
We have tried to cover a broad spectrum of areas and possibilities, so that these types are applicable to as many undertakings as possible.
To start by automating processes, so that we can devote more time and energy to the rest of the processes: planning what happens inside our business, analyzing data and the general market and, based on all that, proposing improvements to optimize our venture, is to think big and to promote the growth of our organization.
It is a basic, simple and universal scheme, but no less effective for that. If you follow these simple tips and adapt them to your business, there is no doubt that you will see improvements in a short time. In Pensemos we are experts in strategy planning and execution, if you want to know more about these topics do not forget to subscribe to our blog.
We have also developed a strategic management software that will allow you to achieve the level of organization you expect with your venture and will fit your needs. Contact us and we will advise you through the whole process of implementing the tool.