Keeping track of your cash flow is important for many reasons. In terms of providing an overview of your business resource and to keep daily operations running smoothly, it’s essential.
Thankfully, there are now a host of affordable digital options out there to help you track your business finances and accurately forecast cash flow. Here’s what you need to know.
It’s 100 times better than a spreadsheet
You might think you can keep track of your finances easily with a spreadsheet – but specially designed software has the edge every time. No misplaced formulas. No lost information due to computer crashes or malware infections. Better security to protect you from hacks.
Crucially, it also gives you the ability to carve up your data in a variety of different views so you can spot trends that might have passed you by. In short – it helps you know your finances better. And that’s essential for any small business.
Helps with forward planning
For SMEs, a lack of forward planning can lead to major issues – and even cause promising ventures to fail. How? Cash shortfalls often come as a nasty surprise because of a lack of financial insight. That means an extra bill or an unpaid invoice can wreak havoc on the financial stability of your business.
Cashflow tools mean you can always get an accurate picture of what lies ahead, and plan accordingly.
Lets you be proactive in borrowing
The ability to raise funds before they’re urgently needed is one factor that can set successful businesses apart from the crowd. And a clear view of your future finances means you can anticipate any potential shortcomings and seek to raise the appropriate finance. Similarly, you can spot potential opportunities for growth that might need additional support.
The bonus: maintaining clear and shareable business finance records in standardised formats will almost certainly make it easier to secure funding from lenders.
Managing your cash flow helps significantly reduce the risk on your business. Used effectively, it protects you against funding shortfalls and provides a truly accurate picture of finances across the business. That means you can balance risk and reward when it comes to taking on new clients and allocate spending across different departments.
Saves you time in the long run
There might be a learning curve the first time you use accounting software. But these systems are designed to be as user-friendly as possible and always have support teams on-hand to answer any questions.
Once you get into the swing of things, it will get easier to enter your data. And lots of programs now offer integrations to do it automatically for you.
Soon to be compulsory
That’s right – if you’re not already on board with digital accounting software, now is a great time to make the switch. As of April 2019, all VAT-registered businesses in the UK are legally required to record and file their VAT records digitally.
HMRC is keen to move everything to digital, and those who don’t keep up with the times are likely to face complications submitting their financial information.
As a small business owner, you might have a digitally savvy accountant who helps with these things. But the cost for these services may rise in line with demand – so investing a small amount in a software package now could be much more cost-effective in the long term. And since your accountant can have access too, it may even make some of your current admin tasks a little easier.
How we help
Finpoint is free to use. We’re 100% transparent about fees and rates, and give you access to the UK’s largest panel of business lenders. We’re also 100% independent. Our only interest is in making sure you get the right funding option for your business need.
Want to know more? Speak to us about funding or your financial planning needs.