Streamlining Your Finances: Best Practices for Financial Management

Managing finances is critically important for any business, but it’s easy to get overwhelmed by the amount of data, reports, and decisions needed. Streamlining your financial processes and keeping close tabs on key metrics can enhance operational efficiency, spot issues faster, and support data-driven business growth.

The following sections will overview best practices for taking control of your business finances and setting your company up for success through improved financial practices.

We’ll cover how to:

• Set clear financial goals aligned with your growth objectives
• Closely monitor cash flow
• Trim controllable operating expenses
• Leverage accounting and financial management software
• Analyze key financial statements and ratios
• Implement financial controls and forecasting
• Optimize taxes
• Integrate financial data into other systems
• Continually assess your overall financial health

Following these financial best practices reduces risk, frees up management time, ensures sufficient funding is available, and provides the visibility needed to make smart operational and investment decisions.

Set Clear Financial Goals

Setting clearly defined financial goals is critical for guiding budgets, key performance indicators, resource allocation, and overall business strategy. Well-constructed goals should follow the SMART methodology to provide maximum benefit.

SMART financial goals are:

• Specific: target a numeric achievement over a set timeframe
• Measurable: establish KPIs to monitor and track progress
• Achievable: ensure stretch goals remain reasonably attainable
• Relevant: align and support overall business growth objectives
• Time-bound: assign a clearly defined timeframe

Linking departmental budgets and resource planning to financial KPI targets provides a helpful connective tissue between high-level goals and ground-level activities. Financial goals also need regular revisiting through quarterly or annual reviews to confirm they still match where you want the company heading amidst new opportunities or changing market dynamics. Adjustments must align with strategy shifts while ensuring adequate resourcing to fuel growth.

Use Goals to Guide Spending and Growth Decisions

Connecting financial goals to operational activities and budgets provides a decision-making framework for the whole organization. When evaluating investments, expansion opportunities, or resource requests—trace back to those goals.

Do department budgets and staffing plans map to targets set across profitability, revenue, liquidity, and other key financial KPIs? If not, additional alignment likely needs infusing across the broader business strategy.

Strategies for Effective Cash Flow Management

Cash flow reflects the lifeblood of any company. While profitability determines long-term viability, sufficient positive cash flow ensures a business can cover its obligations, take advantage of growth opportunities, and withstand any near-term downturns or customer payment delays.

Best practices include:

• Track Frequently: Monitor weekly cash inflows from customer collections and outflows from vendor payments and operating costs. Maintain a detailed ledger recording every transaction.
• Project Ahead: Create 30, 60, and 90-day cash flow forecasts to anticipate upcoming capital needs and guide major purchases or investment decisions.
• Cushion Funds: Ensure adequate liquid cash reserves to maintain operations for months if sudden business setbacks or economic fluctuations occur.
• Review Recurring Costs: Scrutinize recurring expense outflows to trim any unnecessary spending not vital to core business operations.
• Bill Quickly: Issue client invoices and collect payments as soon as work is complete to accelerate incoming cash.

With clear visibility into past and projected future cash positions, proactive adjustments become possible before liquidity crises arise. Software automates cash flow tracking so teams can focus on using the key insights.

Healthy cash reserves also allow for pursuing growth opportunities at optimal moments rather than delaying while fundraising. Carefully monitoring cash flow provides the liquidity to fund operations and act on new opportunities.

Trim Controllable Operating Expenses

Carefully controlling costs not directly tied to product and service delivery protects profit margins. Finance teams managing key financial management functions like capital planning and expense budgeting play a pivotal role in continually assessing discretionary spending.

When reviewing budgets, gather department leads to evaluate areas revealing savings opportunities without hindering operations. Potential areas of scrutiny include:

• Software, equipment, and professional services subscriptions
• Payroll, healthcare, and HR spend per employee
• Marketing budgets from advertising to event sponsorships
• Other variable general and administrative expenses

The goal of the assessments involves aligning company spending to financial targets rather than simply allowing inertia to dictate cost trajectories. Finance provides the data showing where budgets bloat over time without additional value delivery. Tight yet strategic financial planning focuses only on expenditures, showing limited tie to core operational priorities for the business.

Utilize Accounting & Financial Software

Turning raw data into accurate insights quickly overflows limited human bandwidth. The right financial management software becomes a multiplier— automating tedious reporting, reconciliation, and analysis processes. Rather than chasing transactions, financial managers focus on decision-driving interpretations and strategy recommendations to optimize financial performance.

Modern accounting and finance systems provide additional benefits:

• Centralized real-time data visibility through cloud-based consolidation
• Customizable dashboards and automated scheduled reports tailored to various leadership needs
• Workflow functionality reducing manual data re-entry across disconnected spreadsheets/tools
• Drill-down detailing to trace raw transactions supporting aggregated analysis
• Audit tracking for internal control and external oversight confidence
• Scalability through modular add-ons aligning with departmental or geographic expansion

Establish a dedicated project management department to oversee system evaluation, selection, and deployment. This involvement correlates directly with getting transformational returns across efficiency, insights, and financial management capacity from the system investment.

Analyze Financial Statements

Transforming raw financial statements into decision-informing insights requires applying ratio analysis across key performance dimensions. Financial managers drive this process monthly to equip executives and department heads with a quantitative picture of organizational health.

Common ratios to monitor over time, analyze trends in, and compare against industry benchmarks include:

• Liquidity: the ability to meet current obligations through metrics like the current and quick ratios
• Leverage: debt levels relative to equity and assets indicating capital structure risks
• Profitability: return on assets/equity and profit margin durability
• Valuation: P/E and P/B ratios signaling investor confidence
• Efficiency: asset turnover and days sales outstanding shaping working capital

Financial modeling builds on these ratios to shape growth plans and investment priorities targeting improved future capital efficiency, profit maximization, and stability. Establishing a dashboard incorporating historical ratios, projected figures, and relevant benchmarks provides insights into progress toward goals. Reviewing financial statement ratio analysis monthly allows for timely adjustments to strategy should headwinds emerge.

Create Financial Forecasting Models

Financial projections empower leadership teams to peer into the future when guiding strategy and growth decisions. While guessing precise market conditions proves impossible, financial modeling leverages historical data trends, economic inputs, and sales projections to craft likely scenarios.

Financial management professionals typically build models assessing impacts across:

• Revenue Forecasts: Project growth rates for existing and new product lines, channel expansion, price optimization, etc.
• Operating Expense Budgets: Model changes to production inputs, staffing, facilities, systems
• Capital Expenditures: Quantify investments needed to support growth initiatives
• Profit and Loss Statements: Combine revenue and expense inputs above
• Balance Sheet Changes: Understand how decisions alter asset/liability structure
• Cash Flow Positions: Ensure sufficient funding for growth execution

Updating projections quarterly provides an evolving outlook for executive strategy sessions weighing options and tradeoffs. Models answer what-if questions by forecasting impacts from potential investments, economic shifts, or competitive adjustments. The quantitative insights derived from quality financial modeling reinforce decision-making confidence.

Optimize Your Tax Liability

Few expenses consume resources like taxes, making legal minimization critical. Consult tax specialists to employ strategies fitting your situation across:

• Income Timing: Deferral to years with lower marginal rates
• Accounting Methods: Cash basis delays tax hits
• Entity Structure: Sole proprietorships/partnerships enable pass-through
• Deductions/Credits: Maximize all qualified business expenses
• Retirement Plans: Certain options allow significant deductions

Achieving tax savings must adhere to standards—an overly complex scheme likely crosses lines despite promising unrealistic benefits. Common red flags include unmatched guaranteed refund promises or arrangements keeping the government in the dark.

Work with reputable professionals, prioritizing a personalized approach leveraging retirement accounts, entity structuring, credits, deductions, and accounting methods. Tax strategizing should align with overall financial and growth planning rather than view tax in isolation. Holistic planning enables maximizing long-term after-tax profitability.

Integrate Financials with a CRM Platform

Customer relationship management (CRM) systems shine, tracking sales pipeline health, customer lifetime value, and buying behaviors. Yet when isolated, sales insights remain detached from the corresponding financial performance underpinnings— limiting strategic perspective.

Conversely, financial controllers modeling future growth drivers crave deeper customer data beyond aggregated revenue totals. Integrating related data systems thus unlocks game-changing organization-wide visibility as leadership teams weigh investments, expansion opportunities, and competitive threats.

Integrating financial planning tools with CRM systems enables combined access to:

• Customer profitability supporting precision resource allocation
• Campaign cost/benefit awareness directing marketing budgets
• Sales performance vs spending analytics improving ROI tracking
• Renewal and attrition forecasts tied to bottom-line impacts
• Enriched customer lifetime value projections for priority tiers

Integrating CRM customer data with financial planning systems breaks down historical information silos trapping insights. Though technical barriers persist, advancing tools lower integration hurdles. With committed leadership eager to leverage cross-functional analytics, unified platforms empower better planning powered by complete intelligence.

Syncore, an industry-leading CRM platform for promotional products, provides sophisticated technology to integrate efficiency and data flows across sales, marketing, finance, and other organizational systems—setting a strong foundation for scaled growth. Synthesizing the customer experience with financial planning transforms fragmented visibility into organization-wide growth accelerants powered by a unified view.

Ongoing Assessments of Financial Health

Vigilantly monitoring the overall financial health of an organization ensures teams can respond quickly to any changes in trajectory versus being caught off guard by deterioration only visible in hindsight.

Continually assess core elements like:

• Progress Tracking: Establish clear KPIs directly tied to short and long-term financial goals to quantify performance over time in meeting targets.
• Key Metric Analysis: Closely track vital signs like revenue growth trends by segment, profit margin changes, liquidity ratios, debt obligations against assets/income, and other barometers quantifying fiscal fitness.
• Dashboard Reporting: Consolidate metrics into digestible, at-a-glance visualizations updated dynamically rather than relying on scattered spreadsheets.
• Pattern Recognition: Spot momentum shifts or outliers early enough to investigate causes and course correct.

Ongoing financial health vigilance provides evidence to determine if strategy adjustments become necessary based on internal stimuli like an underwhelming new initiative or external factors such as economic shifts or competitive disruption altering assumptions. Continual assessments also inform forward-looking plans and investments, keeping the future pipeline profitable.

Streamline Business Operations with Facilisgroup

Tired of constantly struggling to sync disconnected sales, order, marketing, and reporting systems? As a leading provider of software solutions for the promotional products industry, Facilisgroup empowers distributors to transform workflows and scale efficiently. Our Syncore Promotional Products Technology Solution delivers the tools to drive productivity across sales, order processing, marketing, and reporting—streamlining critical operations to unlock growth.

Syncore combines essential technology into one seamless, cloud-based solution designed specifically for promotional product needs. Key features include:

• CRM and Sales Management: Customized for industry relationship building to close more deals
• Streamlined Order Processing: Intuitive platform to quickly fulfill customer orders
• Marketing Automation: Promotional product-focused tools to boost branding and prospecting
• Managed Products Website: Showcase catalog with best products, margins, and search
• Real-time Reporting: Analytics for informed decisions across devices

Don’t waste another minute wrestling with your business software. Syncore tackles distributor challenges through customized automation. As an integrated software ecosystem tailored to address industry pain points, Syncore notably enables easy connections between customer data and financial systems—transforming insights into cross-functional growth accelerators.

Simplify your software suite with Facilisgroup. Contact us today to learn more!

For more information on business management, read our guides, ERP Supply Chain Management and Human Capital Management for ERP.

Frequently Asked Questions

How often should businesses review their financial statements?

Managers and leadership teams should review financial statements covering balance sheets, income statements, cash flow, and ratio analysis at least every month. That lets you spot issues and course-correct them early versus waiting for extensive damage. Some leading firms even look at weekly or daily financial snapshots—particularly of cash balances and key drivers.

What is an ideal cash flow projection timeframe?

Build a 12-month forward cash flow forecast updated at least quarterly for stable businesses. That provides visibility to anticipate funding needs for growth plans or inventory build-ups heading into busy sales seasons. Higher growth companies may forecast cash flow every month and extend projections beyond a year. Just ensure you have enough historical data to predict future scenarios reasonably.

How can integrating financial management software with CRM systems benefit organizations?

Unifying financial planning tools with customer relationship management (CRM) software enables leveraging robust data from both systems to make better-informed decisions. Rather than having a disjointed view of sales pipeline health and financial forecasts as isolated data sets, combining platforms provides consolidated visibility that gives leadership more complete, accurate insights for strategic planning.

What type of financial controls should a business have?

Best practice financial controls include cross-checks through segregated department duties, documented policies governing processes, independent internal audits, system permission restrictions, routine bank/credit card reconciliation reviews, and regular training so all employees supporting financially related roles understand their responsibility.

What features should you look for in accounting and financial reporting software?

Prioritize robust reporting, custom dashboard creation, automated transaction entries, real-time data visibility, drill-down detail analysis, audit trail tracking, exports to spreadsheet/BI tools, role-based system access/permissions, and native or third-party platform integration capabilities, allowing you to connect related business systems.