By : Akhil Gopakumar
Managing Finance as your Team Expands
Effective management of finance is a crucial part of running a growing business. As the team expands, financial management helps you to evaluate the success of your business strategy and to identify the most cost-effective way to build capabilities. So that it matches your needs and can expand with your business. Here are the key ways for the financial management as your business grows:
Manage day to day accounting properly
It is of utmost importance to have an eye on day to day accounting process. Either you can hire someone to do the job or purchase any reliable accounting software which doesn’t do much harm to the overall budget of the company. There are plenty of such online tools available. Zoho Books is one of the best options to go for.
Keep a track on expenses
A practice which has to be followed from startup level to billion-dollar level. The one thing which adds up quickly is the expenses. Keeping a track on it helps to understand where the money is going. It also helps in fine tuning the whole process.
Financial projection is the forecast of future revenues and expenses. Preparing financial projections always helps in the way forward by giving an idea of possible future obstacles and the way to tackle them. Planning helps the company to deal with change, both inside and outside the company. Use financial projection as the guide for the growth of the business.
Corporate bank account opening
Open a corporate bank account as soon as the company get registered and route all the income and expenses through the same. This helps in proper tracking of business funds, like from where they are coming and where they are going to.
Open Salary Accounts
Also open salary accounts for all the employees in the same bank where corporate account has been opened. This helps in reducing the hassle and makes the process of salary updation smooth. Make sure that the employees receive a fairly good debit card which allows them to use the card in any bank ATMs multiple times. Most of the new generation banks provide such features these days.
Make invoicing a regular habit
As soon as after providing the clients with goods or services send out the invoices. The invoice should be simple with the nature of work done, amount charged for each module, tax rates (if applicable) and the payment terms. Try to keep the payment terms within one week of the invoice date as it will make sure that the payments are not forgotten or lost in the process. Again Zoho Books is a handy option to create neat invoices and mark the payments against the invoices created.
Keep a track on business loans
Whether the loan is from any banks or if it is a loan from any director, keeping a track on it will help in planning. When revenue comes always allot a portion of that to paying off the loans.
Minimal travel costs and luxuries
In the starting and intermediate phases directors or the person who is in charge of marketing department needs to travel a lot for business purposes. Make these travels count and as well as make it economical. Try to avoid luxury and keep in mind that hotel and travel costs should be spent just to lay your head at night and a way to get from meeting to meeting. Always think and plan these travels in such a way that you are paying for these expenses rather than the company.
Plan your expansion
Business expansion is an integral part of every company. So plan the same in such a way that it is done steadily and wisely. Investing too much money at a time may bring a negative impact as well. It is always advisable to make one step at a time. This gives you time to plan the next step and more control over the financial situation of the company.