Bookkeeping and other day-to-day finance functions should now be in-house.
The roles may not be full-time and they may suit some working from home but there should be a physical finance presence within your business.
But not in a silo! For sure, some financial work is confidential but the different areas of a business need to work together and not build up barriers.
Financial information
Financial information that’s consistent, regular and easy to understand needs to be flowing across the organisation and needs to be acted on.
Information from other areas – sales, CRM, operations etc. – also needs to flow and should be consistent with the financial information.
=> Management accounts – are yours fit for purpose?
Cashflow, break-even and getting paid
Staying on top of cashflow is paramount.
The key driver for improving cashflow is to make a profit every month and therefore you need to know your break-even level of sales and try to beat it more often than not.
The other essential part of healthy cashflow is making sure you get paid on time. Good credit management needs to be embedded in the sales process so that every step of the way through a sale being made the prospect / customer knows when they will be required to pay.
=> Don’t bank on your bank for cashflow
Gross profit officer
Proving and improving your profit margins is an ongoing process and very easy to overlook in a larger business.
Make it someone’s job to check that across products, services, projects and customers you are actually making the profit on each sale that you should be.
=> Gross Profit Officer – appoint one today!
Part-time finance director
Most businesses are too small to need a full-time finance director but could certainly benefit from the experience and guidance of someone who knows how to run the financial side of a business.
This is certainly something that we can help you with.
What next?
Many businesses that reach £1m of sales stay roughly where they are and that’s absolutely fine.
Others seek to grow way beyond £1m and they’ll find that financial management requirements also move on.
