4 financial management principles all businesses need to consider in 2021
After a challenging year, consumers and businesses around the globe are hoping to experience an easier year than 2020. While that is possible, it won’t simply ‘happen’. Now is the time to plan for the next 12 months, based on the lessons we all learned in recent times.
For any business, money management will play a key role in helping to make the year easier and less stressful. Why not discuss these principles with your team members?
Outsource when you can—And even if you think you can’t
If you’re facing financial strain you often feel you just have to push harder to get the business through the trying times. However, working smarter instead of harder often has better results. For example, imagine what you can achieve if you have more time to get creative about reaching new target audiences. Or you can use a more relaxed schedule to build relationships with the industry leaders that can benefit your brand.
Saving you time is one of the reasons why outsourcing is so popular in the business world today, which indirectly can help you make smarter decisions for your business’ cash flow.
The second reason for outsourcing is you’re bound to get better results when experts work on your behalf. Instead of battling to keep bookkeeping up to date or understand tax submissions, ask expert accountants. They provide you with the latest financial reports so you can make better, informed decisions AND they’ll help you get all the tax deductions you’re eligible for.
So, even if you don’t think you can afford outsourcing some tasks, imagine what it can mean for you long term
Take a serious look at remote working
In reality it shouldn’t be lockdown rules that prompt you to try remote working. The past year simply showed many brands that they can be as effective when employees work at home, without the necessity of paying for office space.
Another benefit is that many workers are happier when working from home. They waste less time travelling to the office and they have more time with their families. In the long run this will lead to higher productivity. And with rental laptops for offices and home workstations, it’s easy to create these spaces, even if you just want to implement it for a trial period.
Review marketing ROI regularly
The marketing you were paying for a year ago may not be effective anymore today. For example, when there are huge market changes—which a global pandemic can cause—consumers may adjust their habits.
They may not buy the magazines you advertise in anymore and you now have to engage them on social media to catch their attention. Measure the outcome of your marketing campaigns regularly to ensure you’re getting returns.
Cash flow is key
Cashflow is vital to money management in any organization. If you need to start using your credit card because there’s no cash to pay a supplier, it means you’re paying unnecessary interest. Implement small changes to ensure a healthy cash flow:
- As an incentive, reward customers who pay on time, offering them small discounts.
- Contact customers about outstanding payments, whether via phone or sending messages.
- Send invoices directly after purchases, instead of only at the end of the month.
Some of these principles may seem impossible to implement at first, but committing to a sensible plan can be the best investment you ever made. In the long run, this is how you can ensure your brand thrives and even grows.