Creating a strong finance base structure from the start is important in business. Equally, creating a strong base across the business is an important foundation for growth. This month, we have been certified for ISO9001, an international standard for quality management. A significant business achievement for a small finance outsourcing provider, I know, but being able to independently demonstrate to our clients our ability to consistently deliver services that not only meet their needs, but also regulatory requirements is key when it comes to our services.
Of course, we are qualified from an accountancy perspective, but with business and finance going hand in hand, I wanted to make sure our accreditations reflect both our business and finance capabilities.
In addition to this, setting up systems and processes early on in a business so that it becomes your way of working, rather than an adjustment to working processes is much easier. This is what I tell my clients too when it comes to finance.
Of course, there are mandatory requirements for any business from the start from a legal and compliance perspective but anticipating your growth and setting objectives means you can also better plan your investment, anticipate funding needs and be better prepared for any challenges you face.
Financial planning in business
What we’re not saying is implement processes and procedures of a larger organisation from the start. You will be investing additional costs, resource and time to do this, however knowing where you want to get to, putting a strategy and plan together that is agile so that you can modify it as you go; means that you can also anticipate your financial needs, support your business growth and reduce stress.
Business planning and forecasting – financial things to consider
As a business owner, you should consider implementing accurate budgeting, cashflow forecasting and management reports to help you grow your business. The level of detail is reflective of your business size and needs, but with accurate data you can rely on, you and your management team can confidently make business decisions and better plan for your future.
Creating a realistic budget enables a structured spending plan and delegates those all-important costs that you can stick to. Monitoring your performance is easier and budgets can be turned into forecasts for even more clarity.
This helps your business by projecting forward the outcomes of seasonal changes and decisions. Using your business data, it is possible to build 3-way forecasts, enabling you to spot trends and opportunities to progress and build.
Management reports can be used to share with your Board, bank or colleagues. These can be broken down by department so you can see exactly which areas are performing well or need some extra attention. Historical information doesn’t help you progress, it’s real-time data that you need.
By building in these processes, you build your business intelligence and enable you to ask “what-if?” and get real answers. Understand on paper if you can afford the next investment in tech, machinery or employees before you take that step.