How to manage your business finances like a boss

Between chasing and managing money coming in, balancing the books and paying your suppliers, keeping tabs on your business finances can be more time-consuming than making the sale.

Digitisation and automation are removing many admin hurdles but integration – specifically within accounting, payments and banking functionality – is revolutionising how small business owners tackle those tedious-yet-necessary tasks.

How much time is your money costing you?

Money management admin tasks don’t only drain your time, they take a toll on your funds, too. UK small businesses spend 5.6% of their working hours on administration each year, the equivalent of £39.9bn in productivity, according to our Sweating the Small Stuff report on the impact of the bureaucracy burden.

Of the various types of administrative tasks we asked about, UK entrepreneurs said accounting, generating invoices and processing payments received take up the most time. It’s apparent that UK small business owners need an easier way to move money in, out, and around their business.

Here’s how payments and banking integration can help you manage your business finances.

1. Money in

Purchasing integrated payments and banking functionality within your accounting software (combining those platforms to streamline processes and extend functionality) gives you complete visibility into all your business’s cash flow streams.

For payments in, that means having all incoming transactions tracked and reconciled with your bank account in real time, in one place. You only need to sign in once, so no more bouncing from one form of software to the other. Plus, automated reconciliation means no errors in accuracy. You can trust your numbers to be the real thing.

Trending payment methods such as direct debit and e-invoicing are also compatible with payments and banking integration for businesses and those who accept payments online. With this, funds from each sale are immediately available in your bank account once the customer initiates the payment. This eliminates the need to chase late payments, which UK businesses say takes up 8% of their admin time.

2. Money out

An integrated view of your money coming in means you can better budget for suppliers, equipment, inventory and other expenses. You can schedule these payments in advance so you’re always on top of when your next payment is due, keeping your bills and access to credit in good standing.

You’ll also be able to better predict where and when you’ll be short on cash and if you’ll need to ask your creditors for a payment extension, keeping you in good standing with them as well.

3. Money management

Instead of crunching the numbers (and checking them twice) to figure out your business’s financial health, an integrated view of your money streams gives you control of your cash flow. You can pinpoint exactly where your business is strapped for cash and move funds around to keep things flowing (or catch them before they get out of hand).

This will help you address big-picture considerations such as if your business needs to boost sales to cover overhead expenses, if you’re investing in too much of one stock item, or if you have enough extra profit to invest in new equipment.

Finding the right solution to manage business finances

When choosing an integrated solution to streamline the processes for how your business finances are functioning, there are three things worth considering:

1. Set-up time and costs

Most small businesses don’t have the additional resources to spare for training staff on how to use new software and installation costs. It would be ideal to purchase payments software that can integrate with your current accounting software. That way, installation is easy and your employees are already familiar with your platform.

2. How often you check your numbers

You’ll get the most bang for your buck if you spend a lot of admin time tracking reconciliation and double-checking data for accuracy. Switching back and forth between platforms and double-checking manual computations for accuracy are a busy person’s nightmare.

If this is your biggest challenge, prioritise automatic reconciliation and bank feeds as you shop for an integrated solution.

3. Data security

As financial services and how we access sensitive information evolves, it’s important to be aware of the security implications as well. Legislation, such as the forthcoming GDPR, is in place to address new security checkpoints when accessing and storing data.

However, you should still do you due diligence by making sure your integrated solution is already up to date with the latest legal requirements and industry-standard tools to protect your business and its reputation.

Our research shows that small businesses stand to gain substantially by turning to digital solutions for admin tasks. Have you already made the switch for your business? Let us know your thoughts in the comments.