Financial management tips for SME growth

The financial management decisions of small- to medium-sized enterprises (SMEs) have a direct impact on the efficiency, processes and resource management of a business. This holds true regardless of whether they take on mundane cash-flow tasks themselves, hire professional financial managers or utilise online software tools.

The financial management approach can also mean the difference between an SME achieving sustainable growth or not.

SME owners can optimise future growth opportunities by ensuring that they have their books in order all year round and have an accurate idea of their company’s expenses, budgets and projections at any given time.

These are my top three suggestions for SMEs to encourage business growth through better financial management decisions.

1. Be realistic with your options

When assessing how best to manage your company’s finances, it is crucial to look at the funds available for the task, as well as how much time existing team members could spend on day-today financial responsibilities.

So, for a start-up with a core team of less than five, it may not be realistic for the team member managing sales and operations to also tackle financial management.

Adding the expense of a fulltime financial manager may also not be an option, so affordable online software would be best.

2. Plan, review and adapt

Businesses go through lifecycle stages.

While the majority of start-ups have a period of negative cashflow, as a business becomes better established, the financial management process needs to evolve.

With this in mind, SMEs need to set reasonable goals and be flexible to adjust these as the business matures.

3. Invest in innovative so ware solutions

Leading business software developers offer online and desktop tools that help businesses manage their finances and set the foundation for business growth.

In addition to delivering on convenience, accuracy and efficiency, online accounting, budgeting, payroll and invoicing solutions are an accessible and cost-effective alternative for small businesses with tighter budgets.

Gary Epstein is the MD at EasyBiz QuickBooks