You are currently not satisfied with your company’s financial performance. So you’re wondering what actions you need to take to change that. Let’s discover together in this guide the steps to take to really improve your company’s finances.
Define KPIs in line with your financial goals
You probably know that there is no performance without a goal. If you’ve already set financial goals, now is the time to define KPIs that will help you achieve them.
KPIs (key performance indicators) are tools that allow you to measure the current and future performance of your company. It is thanks to KPIs that you can know if the actions and strategies you put in place are working or not. Defining and monitoring your KPIs helps you to better manage your results, to question yourself if necessary and to duplicate or validate the processes that work for you.
For example, you can use KPIs to monitor and reduce your expenses. Other KPIs will be useful to check if you have at least doubled your profits or reached a certain level of financial profitability.
Set up a dashboard
Keeping track of your cash flow is imperative if you are looking to optimize your business finances. Without a dashboard listing all the KPIs you need to monitor, you can’t do it.
Some of the benefits of a dashboard include:
– It shows you the trend of your results;
– It gives you the status of your finances at any given moment;
– It allows you to quickly anticipate possible problems that could negatively impact your cash flow;
– It reveals your progress, your gaps and your performance at different levels…
The dashboard model to use varies from one company to another. You can therefore consult some online platforms if you want to know the type of dashboard that best suits your structure or take advantage of the best financial advice for your business.
Implement a customer dunning policy
Getting a better handle on your outstanding receivables and increasing your revenue can do serious good for your finances.
It can be difficult to collect from customers. The best solution is to follow up with them regularly. For example, if one of your customers is late with a payment, it is in your best interest to follow up with them within 48-72 hours of the payment due date. Investing in a tool that will allow you to automate customer reminders is an excellent idea. Optimizing your debt collection will increase your liquidity, which will improve your finances every time.
But there is more to dunning than that. If you increase your revenues, your finances will be healthier. That’s why you need to be a little more aggressive in your marketing campaigns.
How do you do this?
When you are prospecting someone, remember to follow up with them repeatedly. Statistics show that it takes an average of 8 times to show a product to a person to make them want to buy it. So, don’t hesitate to develop a follow-up policy in your marketing strategy. You will certainly be surprised by the results.
Increase your equity
Among the easiest ways to improve your business finances is to increase your equity. While this procedure is easy, it is not simple to do.
There are several ways to increase your equity. The capital contribution is one of them. With a capital contribution, you can considerably increase the financial capacity of your company.
The increase of your structure’s equity capital through a capital contribution is a proof of the seriousness and stability of your company. It is also a very good idea if you want to initiate large-scale projects in order to better ride on a recent period of strong growth.
Start a business loan financing process
If your equity is insufficient and you are not able to raise capital, you can opt for a bank loan. However, it is up to you to convince the bank to grant you a business loan.
Here are some things you need to do to increase your chances of getting your loan:
– Highlight the strengths and limitations of your business or project;
– Be ambitious, realistic and, above all, serious;
– Demonstrate your commitment by providing equity (about 30% of the amount you want) to the project to be financed…
Remember that a realistic financing plan as well as a solid and convincing business plan are the main keys to the success of your financing request. And if you want to benefit from your personal loan with better conditions, spending as little as possible, you can use this business financing solutions comparator.
Include a Certified Public Accountant on your team
Improving your company’s financial performance means taking on some daunting tasks.
– Organizing and planning financial operations;
– Monitoring the company’s cash flow;
– Analyzing financial statements and completing tax formalities;
– The recording of accounting operations and financial controls…
Of course, the implementation of these different tasks requires more or less specialized skills in accounting. This is why you need the services of a chartered accountant. If he allows you to better structure your financial plans and to comply with regulations, his advice will also be useful to bring your company’s finances to a better level.
What to remember? If you want to be more profitable, you need to think about improving your finances. Various measures can be deployed to achieve this goal within your company. Defining your financial KPIs, increasing your capital, setting up a dashboard are some of the actions you need to execute. If the use of a business loan seems to be an easy solution, it is not without difficulties. In any case, the services of a chartered accountant will be of great benefit to you if you really want to optimize your business finances.