Correct financial planning is essential for the survival of a company. If you have your own accountant in your business, you need to make sure they do these functions for the well-being and future growth of your business. If you outsource your accounting functions, enquire if they can do these functions for you. It is important that every SME performs these critical financial tasks.
According to expert accountants in central London, the finance area is a fundamental part of the development and sustainability of any business. Many SMEs focus on “what”, “how” and “who” to produce or develop their product/service. They often fail to pay enough attention to financial matters and related tasks.
Many entrepreneurs feel more comfortable dealing with business or production issues than with financial matters. But, the finance area plays an important role in any SME. Your accountant needs to focus some of their time on these essential tasks, for the long-term benefit of your business.
- Register accounting operations and financial data. This is key to obtain the current and historical business information to plan and make the appropriate financial and business decisions. This function is as important as the following ones since what is not registered, is not managed. In other words, what is recorded is managed.
- Plan, analyse and evaluate the recorded information. It is necessary to have in-depth knowledge of the business situation. This is done planning budget preparation, the flow of funds, financial indicators and cost analysis. With good financial planning, you can establish future objectives, payment and collection strategies, investments for future growth and greater profitability of the business. It will also help you anticipate any unfavourable situations which might occur.
- Search funding sources and select the most suitable. There are different financing options and each company should analyse which one best suits their needs. These include seed capital from various organisations, angel investors, family and friends and bank loans.
- Look for investment options that the business can benefit from. Select the ones whose profitability is commensurate with the financial capacity achieved. These might include several alternatives such as the acquisition of assets, new machinery, purchase of securities, shares or shares of mutual funds, and bank account deposits.
- Control the operations executed and registered. This will allow, if necessary, rectification of errors or omissions for the subsequent analysis of deviations in relation to the initially developed budget. The result will be optimal efficiency.
Carrying out these key financial tasks is essential: it will allow the business to increase profits and avoid unnecessary problems. In your SME, do you have a person that deals with these functions? If not, now is the time to do something about it. Your business will benefit from it in the long run.