5 financial tools your business can't live without. These tools will improve and significantly upgrade your financial management process.
Most businesses start off by using excel to track their income and expenses. While this may work in the beginning, it’s certainly not a tool I recommend as you continue to grow and evolve. There are certain insights and data that you can’t get from excel especially if you’re in DIY mode. My software of choice is Quickbooks Online which is used by a large number of small business owners. I specifically love it because of its functionality, integrations, and accessibility. It also has the ability to grow and scale with you. From a 1 firm owner to a full team, you can continue using the system while adding your accountant (once you hire one).
Cash Flow Tool/Benchmark
Cash flow issues are cited as one of the main reasons that small businesses go under. It’s important to track your cash flow and have a clear understanding of how money flows in and out of your business. There are multiple tools to assist you with this. Our current application of choice is Fathom HQ. Using this tool allows us to analyze where cash is going, is it diminishing, will the client run out of it and when, is it sustainable, etc. These are the types of questions you should be asking yourself when you’re doing a financial review which at the minimum should be monthly.
Along with cash flow analysis is benchmarking. By benchmarking you can see how your company is performing alongside others in the industry. Fathom HQ also provides this level of analysis. As a result, you can easily determine where you are under or over performing, review non-financial performance indicators, and more.
No money in means you aren’t running a business. A past client of mine came to me due to struggles with cash flow. They knew they were making money but somehow seemed to be cash strapped often. The issue was a lack of process around invoicing and collecting receivables. You need to collect on time and have convenient methods of payment. If you’re using QuickBooks, you can take advantage of automating your invoicing process. Furthermore, you can use Intuit’s Merchant Services to accept credit cards, debit cards, and ACH Payments. Payments can be made online or by phone and you can set up clients to be charged on a recurring basis. Lastly, the collections process (if you’re not paid on time) can also be automated.
By implementing a seamless process for my client, they were able to find comfort in knowing customers/clients were being invoiced on time, the need to track down payments was reduced, and clients were happy with having more options to pay.
Depending on the nature and size of your business you may or may not need an additional tool for expense management. If you’re looking for a way to streamline expense management for and your employees, Expensify is a great tool. It reduces the need to create a stack of paper receipts, reduces paperwork, and streamlines the expense reporting and approval process. Less work for you and a streamlined process for reporting.
Time tracking and payroll are a constant concern for small business owners. It’s no wonder that more and more businesses have moved away from manually reporting time. Our favorite software of choice is TSheets. Using an automated system reduces the ability to “steal” time and also makes job costing easier. The great thing about TSheets is that it also integrates with Quickbooks online. Some of the features include GPS tracking, a mobile app, the ability to create schedules, and integration with not only your bookkeeping system but payroll as well.
These are just a few systems that we use with our clients and that help to effectively manage small business finances. These are all apart of the back office solution we provide to create a streamlined financial process. If your business operations are manual and causing bottlenecks, I encourage you to schedule a consult here.