If you run a business and are looking for ways to improve the management of financial operations and everyday activities, you have come to the right place. This simple guide contains five top tips for improving the financial operations in your business model.
Implementing these changes, such as improving your credit check system and using a trusted international money transfer service, can save you not only a lot of money, but time and manpower too. It’s a no-brainer! Read on to learn how to make your business more profitable, and operations run smoothly.
Improve Credit Management
A common but bad practice by many companies is to take orders and ship goods without first checking customer credit. This occurs because sales staff get paid for making sales, and not for collecting bills, so they are lax on the financial management side of the deal. However, delays in credit checks can cause your business to lose money, increasing its bad debts.
To combat this costly issue, you should use software that allows credit checks to be made before the completion of an order. A good software program will still allow the sales team to maintain its order volume but will put a hold on any orders from customers who have poor credit. Your business’ credit manager can then decide whether to release or cancel the orders from these customers.
If you already have a program in place that allows your staff to check customers’ credit scores before they accept the orders, your accountants should strongly encourage workers to use the system, as it will save the company a lot of time and money.
International Money Transfer Services
If your business deals in international money transfers, you might be spending more than you need to on currency conversions and international banking fees. To find an international money transfer service that suits the needs of your business, click here and read about some of the options available in the UK. Look for a secure and regulated service that boasts good customer service, no transfer fees, low exchange rates, and same-day transfers.
Some other things to note when choosing your international money transfer service include any minimum transfer amounts, and their rating on Trustpilot, as this will give you an idea of how the service is viewed by other businesses. You should also make sure they deal in the currencies you wish to use. Some apps may not deal in less commonly used currencies in the UK, such as some African currencies.
Streamline Processing of Travel and Expense Reports
Your accountants will thank you for this one! Travel and expense reports can be very repetitive and take up a lot of time to approve and set up the appropriate payment entries. To streamline this processing time, employees should be required to submit their reports electronically using precoded charges. This removes the time-consuming need for accountants to code the payments and also removes any chances of additional errors that can occur when reports are being manually processed and calculated.
Your business should also eliminate the step in the process where employees require a manager to sign off on their expenses forms. Instead, immediate electronic submission into a system that can automatically check for late entries or other errors will dramatically decrease delays in the processing time and allow your managers to focus more efforts on their other job roles.
Reduce The Monthly Closing Time
A business’ monthly financial statements are an effective way of obtaining an overview of the previous month’s financial status. They provide an up-to-date report of cash management, profit, and loss statements while allowing management to evaluate future plans and decisions moving forward.
When the financial statements are not published until the middle of the following month, which is not uncommon in businesses, top management does not have time to react to changes and trends in the sector. Using software designed to produce these statements in a timely manner at the end of each month can save companies a lot of time, manpower, and money. Management will get the reports quicker so they have more time to react, and this process reduces the need for manual checking and writing of the financial statements.
Accelerate Bank Reconciliations
In simple terms, a bank reconciliation statement summarizes banking and business activity and should match a company’s bank account with its financial records. Bank reconciliation statements demonstrate that payments have been processed and cash collections have been deposited into a bank account. Where there are discrepancies between the company’s financial records and bank account, an error has occurred.
Depending on the number of checks your business writes, certified public accountants might wish to access information on checks cleared from the bank daily, rather than monthly. This practice can also help to reduce the monthly closing time, as it is a more manageable system and easier to stay on top of, rather than waiting for a massive volume of checks at the end of the month. Your business can use an integrated software package to read bank records daily and automatically match cleared outstanding checks to update the financial records.
Choose A More Profitable Way Forward
With the help of these five financial operations top tips, your business can increase productivity, maximize profit, and minimize time wasted manually writing, checking, and adding on financial documents, such as closing time reports or travel expenses. Taking these simple but effective steps can ensure your business is run as smoothly and efficiently as possible, while also keeping it modern.
Most of these top tips involve using new online services or software programs, and you will find that the more you allow your financial management to evolve with modern technology, the more manageable and less prone to errors the processes become.
Now that you are armed with all of this useful information you can branch out into modern methods for financial management and operations. This is the time for your business to choose the more modern, efficient, and profitable way forward. Good luck!
