Some areas businesses critically need to focus on are:
1. Managing cash.
While profit is important, focus should be upon generating a healthy cashflow. Good cash planning and drivers in your business that can affect your cash flow should always be analysed and worked upon. Inventory management, payment collection, credit control, loan repayment and any price variance are some variables that affect the growth of your company.
An outsourced accounting partner can help. How are you expected to make time to grow the business as well as be deeply involved in managing your cash? An outsourced partner is just like your in-house finance department. Deeply committed to managing your business, they will maintain your day-to-day accounts, ensure payments come in time and raise alerts at the right time, generate the right reports for you, exercise credit control so your company is never cash deficit.
2. Developing a data-driven work culture.
Use data to understand what is working for your company and what is not. Financial data is one such tool that helps you grow a healthy company. Generating reports, that any software can do for you, is one thing, but interpreting it to help your business grow is another. You can always do it yourself, or you can choose to outsource. If you do it yourself, you risk falling into the trap of doing everything by yourself. If you outsource, the team will be able to send you effective analysis to help your business. This way, you only engage and get involved in key decision-making processes.
3. Engaging in Lean Planning.
It’s important to develop a strategic and financial plan and track on a regular basis, as opposed to doing a long-written document that you use once and forget. Planning is an ongoing tool that should be used to understand assumptions you have about your business, and whether those assumptions are correct, or whether you might have to make adjustments and change your assumptions, especially finance-related ones.
You might have made assumptions that are not working as per the plan and adversely affecting the cash management capacity of your company. For example, if you expected certain payments on a 30-day cycle, and are not receiving them accordingly, then firstly identifying that gap is a win, secondly, taking actionable steps to plug it and rework your planning is second. This entire process can be tedious for the founder/s themselves.
By outsourcing, you are trusting a whole team to do this for you. Remember, they are not distracted by any other organizational processes such as marketing, PR, sales or others. They consistently stay focussed on ongoing planning, forecasting and budgeting. It is exactly like your own finance department!
4. Developing a strategy for recruiting and retaining talent.
Identifying the first few hires can be key to making or breaking your business in the early stages. Some functions need attention right from the day you open shop, such as bookkeeping. As a business owner, you might try to manage it yourself with the help of a software or hire an accountant who might initially not have enough work.
Consider outsourcing your finance department. That way you don’t risk a bad hire, benefit payments and the whole protracted process that comes with hiring and training a team. You can also reduce your investment in infrastructure that way. Outsourcing your finance function ensures an ever-ready team to support you in your business.
5. Networking and marketing products and services
Putting your company, products and services out is necessary for any business. Reaching out to create awareness about the brand and connecting to the right audience is of priority for any growing business. Shouldn’t you focus on doing it right and leaving the necessary but mundane processes such as the financial planning, accounting and forecasting to the experts? This way, it does get done, and you get to free up time to focus on more important things in the business all the while you are still turning your finance department into a competitive advantage.