Efficient financial management is the backbone of any successful business, regardless of size or sector. For small and medium enterprises (SMEs) in Australia, staying on top of finances amidst rapid growth can prove challenging. That’s where the guidance of experienced financial professionals can steer companies toward stability and profitability.
Therese Sayers, founder and managing director of AdminWorks, is one such financial expert helping Australian SMEs optimise their financial health. With decades of experience boosting the monetary fitness of diverse companies, Therese outlines her top three tips for taking control of the financial drivers steering your business.
Automate Bookkeeping Processes
“Minimise your valuable time spent on mundane accounting tasks and redirect that time and energy towards growing your business,” Therese advises. She highlights the wealth of software programs and applications available to effectively automate bookkeeping processes.
Tracking transactions, automated invoicing, bill payment, payroll management, receipt logging, and financial report generation are just some of the critical tasks technology can efficiently handle. Therese notes that automation not only saves time but also enables accurate and timely data entry, crucial for financial analysis.
“A good selection of the many software programs and applications available can automate your bookkeeping, avoid time-consuming processes and allow for accurate and timely data entry,” she explains. Therese sees automation as an essential step for SMEs to maximise productivity and minimise wasted effort on routine bookkeeping.
Conduct Regular Financial Reviews
In Therese’s experience, consistent financial review and assessment is a fundamental practice for monitoring and guiding business growth. “By developing a regular review and analysis of your financial data, you will be able to monitor the overall health of your business,” she states.
Compiling data into readable reports and analysing performance metrics allows leaders to track profitability across products, departments, and periods. “Evaluate your actual costs against your budget and compare current to previous periods, months or years,” Therese advises. With regular financial checkups, SMEs can catch budget overages early and course correct. They can also assess the success or failure of business decisions through data trends over time.
“Regular review and analysis will allow you to assess the success or failure of your decisions. Identify potential areas for improvement and ensure that you stay within budgets,” says Therese. Equipped with timely financial insights, SME leaders can steer their company toward smarter decisions and sustained growth.
Engage a Qualified Professional Bookkeeper
While accurate record-keeping is critical, Therese firmly believes business owners should not do it alone. “Ensure the bookkeeper you hire is well versed in accounting principles and has relevant work or industry experience,” she recommends. Vetting a bookkeeper’s qualifications and seeking references are key steps.
“Outsourcing the bookkeeping process to a qualified bookkeeper will ensure the accuracy of your data and provide security for informed decision making by the business owner,” Therese explains. She also stresses the importance of choosing someone familiar with current bookkeeping software and applications. An experienced bookkeeper saves SME leaders time while also lending financial analysis expertise.
The Keys to Bookkeeping Success
In addition to her top three tips, Therese also outlines several overarching keys to bookkeeping excellence for SMEs:
- Stick to a Consistent System: “Maintain the same processes and software for tracking finances month-to-month and year-to-year,” says Therese. Employing different methods leads to confusion and inhibits useful comparison.
- Digitise Records: Therese advises transferring all paperwork to digital copies and storing them in secure cloud-based systems. Physical files get damaged and are unwieldy.
- Review More Than Monthly Reports: “Don’t just look at end-of-month statements. Perform weekly or mid-month reviews to catch issues early,” she recommends. Periodic analysis provides valuable visibility.
- Compare Market Rates: Know what vendors and professionals charge. “Don’t overpay for bookkeeping services or software subscriptions,” Therese states. Regular rate comparisons help control costs.
- Update with Regulatory Changes: As tax codes evolve, bookkeeping must adapt. “Consult experts to adjust to new regulations and comply with reporting standards,” advises Therese.
When SMEs implement Therese’s tips for automated, consistent, and expert-led bookkeeping, they position themselves for informed decision-making and optimised finances. While bookkeeping may not be glamorous, in Therese’ experience, it is undeniably fundamental. “Master your finances, and you master your business’s potential.”
Building a Strategic Financial Foundation
While tracking income and expenses represents the core purpose of bookkeeping, Therese emphasises maximising the value of financial insights. “Don’t stop at compiling the data. Use it to build a strategic financial foundation for your SME,” she urges.
Set Dynamic Budgets
“Rather than static budgets, implement ‘rolling budgets’ that flex with the realities of your business,” Therese recommends. As opposed to fixed yearly budgets, rolling budgets are updated monthly or quarterly. They account for changing needs, new initiatives, and fluctuations.
Therese advises SMEs to involve department heads in rolling budget creation. “Gather input from sales, production, marketing, and operations leaders on current and upcoming resource needs,” she says. Cross-department collaboration leads to budgets tailored to evolving priorities.
Forecast Cash Flow
According to Therese, cash flow projections are a must. “Analyse upcoming known expenses and income to foresee cash availability week-by-week and month-by-month,” she explains.
Armed with cash flow forecasts, SMEs can adjust spending as needed to avoid jeopardising operations. Therese also suggests preparing worst and best case projections to be ready for all scenarios.
By moving beyond bookkeeping basics to build adaptable budgets and cash flow forecasts, SMEs derive greater value from their financial data. “Transform numbers on spreadsheets into roadmaps guiding your company’s growth,” Therese concludes.
To learn more about Therese Sayers, visit her LinkedIn here.
