Five Finance Management Mistakes You Should Never Make
Finances are the heart and soul of every business; they’re in the industry to make money and spend it responsibly. From tiny businesses run out of garages to major multinational corporations, they all have to manage their money wisely. Balancing a tiny business budget might be as simple as balancing a chequebook; bigger corporations have entire departments devoted to managing their finances. These departments are run by skilled professionals who essentially serve as the traffic cops in their businesses. They direct where the money goes and make sure that it’s not being wasted.
If you don’t have a finance manager at your business, you might want to get educated so you can manage your business’s finances. Typically, in a small business, the owner/operator does the finances as well. A few financial management courses can give you the skills needed to effectively manage your business’ money. To get a taste of what you’ll learn in these courses, here are some horrible finance mistakes you should never make. If you’re already making them, this is your warning to right the ship.
Decentralised Data
If your business information isn’t all in one place, you’ll have a hard time balancing and closing out your books. You’ll spend days or weeks compiling data and might never be quite sure you’ve found all of the relevant information. Your best bet is to move to a cloud-based data system that keeps all of your information on a server. It will protect your data as well as compile it all in one place for easy access.
Spreadsheets
You might not realise it, but spreadsheets are a horrible way to keep track of data. Recent research shows that around 90% of business spreadsheets contain at least one error. That one error could cost you a lot of money. It’s a better option to move to an automated system that logs and calculate information for you.
Ineffective Tracking of Expenses
Similar to spreadsheets, manually entering your expenses can slow down your collecting and open you up to errors. 21st century automated technology can reduce the amount of time needed, as well as input your information into the cloud, which will give you access to your information anywhere you have an Internet connection and protect it from physical damage.
Collecting Old Data
Many businesses make decisions on their future based on the past. They look at what business was like at similar points in the past to extrapolate how they will function in the future. That’s a faulty system at best. Conditions change so rapidly that what is effective one year might be ineffective the next year. Your time would be better spent analysing the present and making decisions based on that data. You can learn how to do this in a course on financial management.
Outdated Technology
As your technology gets older and older, it becomes more prone to error and damage. Instead of focusing on growth-based solutions for your business decisions, you are focusing on making your old computers function. Replacing your old technology will help you develop an agile business.
