By Analytix Editorial Team
Though the ideal time for financial planning is year-end, semi-annual reviews and planning changes can help small businesses achieve greater effectiveness. Successful small businesses take time to review business analysis at regular intervals to confidently determine the direction of their business.
Although small and mid-size businesses are the core of the U.S. economy, many small businesses fail to manage the firm’s cash flow and financial position effectively. As a small business strapped for time, money, and resources, managing business finances can often feel like a chore. Therefore, here are a few financial planning tips for small businesses to manage finances better and grow their business.
The IRS estimates that 40% of small businesses in the United States end up paying an average penalty of $845 each year for late or incorrect filing.
Most often, small business owners do not possess the necessary know-how to manage the financial aspect of their ventures. As a result, they often overlook accounting lapses, blunders, and problems that could otherwise be avoided. Regular, proper, accurate, and timely bookkeeping is an essential component of your small business’s success and can mean the difference between you staying in business or closing down due to cash mismanagement. Hence, it is necessary to regularly maintain compliance with U.S. tax laws by providing correct information. However, if you find yourself feeling stressed about all the paperwork, we recommend skipping the traditional approach of hiring a full-time bookkeeper and switching to either online accounting software or reaching out to qualified CPAs for online bookkeeping services.
Choosing to invest in an online accounting software gives deeper insight into the current financial position of the business, thus eliminating the need to invest in additional resources and workforce. Investing in popular cloud-based accounting softwares like Intuit, SAGE, FreshBooks, and Xero not only provides real-time management of your financials but also helps you track your expenses and income from just about anywhere. However, while the right accounting software can work wonders for your small business, hiring a team of professional CPAs and MBAs offers you much more. They help you identify red flags for higher efficiency and offer more robust feedback by reviewing your books, providing periodic business analysis reports, helping with tax filing, and delivering business advice when required.
Analyzing data through business analysis reports is a critical part of every business, but particularly for small businesses with limited financial resources. Business analysis reports empower you with the data to know your business better and improve your understanding of the financial and operational metrics. It further tells you what is working and which are the right products and services to focus on. You can choose a daily, weekly, monthly, quarterly, or annual business analysis by an expert to help you make timely and informed decisions. While weekly or daily business analysis reports by experts give you an improved understanding of the big picture, the mid-year review helps to focus your business and position it to gain an edge in a highly competitive market. With critical deliverables, including KPI analysis, predictive and variance analysis, business analysis reports help you better understand why things happen and what may happen next.
64% of small businesses reportedly have clients who don’t pay invoices for at least 60 days. As a small business owner, maintaining cash flows at a healthy level on a daily basis is critical for your business to run smoothly. Maintaining some sort of internal controls to ensure that invoices you send out are paid on time, can go a long way in protecting the financial health of your business. Here are a few ways to make it easier and quicker for people to pay you:
Want to get finance and accounting tasks under control in your small business?
At Analytix, we believe that small businesses deserve modern accounting processes too! We deploy a cloud-based accounting portal and latest technology tools for managing our clients’ accounting and bookkeeping engagements. With customized finance and accounting services, business intelligence and efficiency tools tailored to your unique industry needs, we help small business owners better manage all facets of their growing business. See what’s possible with Analytix! Email us at [email protected] or call us on 781-503-9004.