Every finance department typically has three main jobs - increase revenue, cut costs and reduce loss by controlling money flowing into risky ventures. As businesses become more complex, the finance department becomes a more critical tool to drive profits, stability and growth - the job profile of the department expands to handle greater responsibilities and uses more technology to bring about these changes.
First, let us look at the benefits a good financial management software will provide you with :
Small businesses are more often than not, reactive to changes. Whether to do limited finances, lack of investment in financial planning or simply, low awareness, MSME owners are busy with managing day-to-day affairs and do not or cannot afford to put greater effort in financial planning. This is where good financial management software comes into the picture.
The software comes equipped with predictive analytics, i.e., it has the ability to analyse your expenditure and predict which part of your business you will be spending more in the selected time period. When this works along with subscription billing, it gives you a clear picture of how much money is coming in, versus how much is flowing out.
Subscription billing is a software tool that allows you to create automatic billing for your customers, so that this important process is error free. It also helps you monetise or tap into newer sources of income by creating new business models - for example, a consumer can choose to subscribe to your product on a monthly or yearly basis. This creates convenience for the customer and more people may sign up. You also have a steady flow of income from your loyal customers.
Making changes in the way you handle finances is the first step you need to make as a small business to chart a profitable growth path. The way to achieve that is to turn your financial management system into an intelligent one. This is where new technologies like Artificial Intelligence (one where you train or program machines to display intelligence, or make decisions and predict what comes next) and Machine Learning (a part of artificial intelligence where the machine learns to solve problems).
By applying these technologies, you can gain more efficiency across all financial operations - you can organise and improve your workflow and increase productivity for important tasks, such as financial close, cash management and compliance reporting, i.e., ensuring that your organisation meets all the financial and tax regulations. When you can teach a machine to take care of all these critical tasks - not only do you save time and money by paying your dues on time and allocating resources efficiently - you also reduce wastage due to manual errors.
In today’s fast changing world, everyone is a hungry consumer - we have become used to instant solutions to pressing problems. Whether it is groceries, internet connection or taxi service, our day-to-day life is driven by comfort and convenience. Rather than wait 15 days for a landline phone, today, internet companies are competing to complete the service within hours.
The same ease and speed can be brought in your finance department too. A good financial management software will enable you to get a clear picture of your finances at any time - you do not need to wait for the end of the month or annual close to understand where you stand in terms of revenue. Your team will get the relevant insights and be able to take any corrective action, if necessary.
In the next blog about financial management, we will explore the different areas where tech can help you. For more information, click here.