4 Ways to Detect & Fix Inefficiencies in Your Business Finances

All businesses strive for an efficient organization that is streamlined and productive with happy staff and valued customers. Because of this, it’s important to take stock every now and then and look at areas in your business that offer room for improvement.

Your finances are an integral part to your business and a key player in the business’ overall productivity, so ensuring that your finances are efficient and organized will give you huge return for your time investment.

1- Use Up to Date Technology

 With the technology and software at everyone’s disposal today, tedious day to day tasks are able to be regulated and made more efficient than ever before. Specialized software is no longer the domain of large multi-nationals, every small business now has access to a wide range of great software that can help to organise, streamline, and increase the productivity of your business. Use it!

2- Bank Reconciliation

 A bank reconciliation is the process of matching the balances in your accounting records for a cash account to the corresponding information on a bank statement, with the idea of ascertaining the differences between the two. It should be completed at regular intervals for all of your bank accounts to ensure the business’ cash records are correct. Conducting a bank reconciliation may find that cash balances are much lower than expected, resulting in bounced checks or overdraft fees, which of course are better to be avoided.

If you find you have accounts that don’t really warrant a periodic bank reconciliation, then maybe reconsider the necessity of that bank account. When doing this, think about closing the account and rolling over any residual funds to a more active account. Consider doing this for any accounts that don’t need to be looked at least every few months.

For the others, conduct a bank reconciliation at the end of each month when the bank statement arrives, or more regularly if the account warrants the need for that. For highly active accounts, it can be beneficial to conduct a bank reconciliation every day at the close of business based on the bank’s month-to-date statement. This way you can pick up on any errors on a daily basis, giving you a much more manageable approach to staying on top of your banking.

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3- Clear the Slate

It’s important to clear bad debts. The last thing you want to do is roll over an bad debts or outstanding bills into the new financial year. Make debt repayment strategies a top priority for your business to ensure that you are paying off any outstanding amounts quickly and efficiently on a regular basis.

Create a system where all aspects of your finances are dealt with on a weekly basis, and not left to build up or be forgotten about. Part of doing this includes revising your budget and examining the business’ income and expenditure. Find patterns of inefficiency or areas for improvement.

4- Set New Financial Goals and Targets

You don’t have to wait until the beginning of the new financial year to do this. Revise your financial goals, sales targets, short-term and long-term business vision. Have a clear vision. Have everything written down and properly thought out. The more time you spend on planning and organising, the easier you will make life for yourself in the future, and the more efficient your business will run.

The Bottom Line:

If accounting and bookkeeping makes you cringe, then consult a professional, but don’t let things get out of hand. Don’t lose sleep over something an experienced financial expert can help you tailor and streamline. Keep everything orderly and your business will flourish.