Last Updated on Feb 18, 2020 by James W
An essential part of any small business is its financial system, which should be managed efficiently in order to maximise the potential of the company. By implementing a finance software solution, a company can drastically reduce the amount of man hours required for accounting and data entry.
Presenting your business as financially stable, doesn’t just give you peace of mind but it demonstrates competence to clients, suppliers, competitors and could give you an edge in this tough economic climate.
There are a host of different finance software systems on the market, some of which are tailored specifically for small businesses. They typically consist of a fundamental package which can then be supplemented by add-ons that cater for different needs of a company.
For example, in a sales-based business environment, the priority for data recording will be sales invoices, order tracking and transactional payments received. For the latter, the system should be able to cater for credit and debit card payments, as well as mobile transactions in this modern era.
Service providers will require a different package as the finance system will need to generate order forms and invoices on a regular basis, as well as managing the overall order system.
Time management is one of the main appeals of a finance software system. Most will enable your business to automate certain tasks which in the past might have been very time-consuming or even require a job role to be assigned.
Contracted clients can be automatically invoiced each month and if payment is not received, a follow-up can then be sent out.
Incorporating debt management is another major advantage, as dealing with unpaid invoices can be a particularly tricky task and can lead to uncomfortable situations between you and a client.
By sending out a reminder when a payment gets close to its due date, you avoid having to do any chasing. Ideally it might just be the case that the invoice was lost or forgotten about, so no extra steps need to be taken.
Reporting is essential to small business owners. In order to track how your business is growing you need to be able to produce custom reports on all the financial aspects of the organisation. Again these reports can be generated automatically on a periodic basis, so you receive the data as soon as it is required.
Most systems also include a budgeting tool, which allows managers to track month on month expenditure, via itemised reports and visualisations. This leads to more effective budget management as the system can also flag up alerts when notable financial events occur which might affect the cash flow. Any action that needs to be taken can then be done so quickly and efficiently.