Fragile Foundations – Detecting Inefficiencies Within Your Business’ Financial Systems

Are you running a business? Or perhaps you’re responsible for your workplace financial systems? Whatever the case, you might shudder to know that there is a chance that some, or even all, of your businesses financial processes and systems are inefficient. Before you get your back up, take a moment to think and reflect. No business is perfect, as is no human being. So it may be time to take some stock and go over your financial systems with a fine-tooth comb. Let’s take a look at how to detect some common inefficiencies.

Are You Using Technology Properly?

This is a great question. Do you know that some businesses still rely on paper records and processes to track their books? Yes! Really! In 2018, some folks still kept a ledger written in with a pen. If that’s the case for your business, you really need to consider some accounting software. There are many options on the market, and they all share widespread useful features – accounts receivable and payable, analysis and reporting, automation (how efficient is that?) and encryption for safety. So consider investing in some.

Overpayment of Tax

While we hope that you want to be a good corporate citizen and pay your taxes like the rest of us, you could actually be paying way too much to the government! While it may be better to overpay rather than underpay and face a huge tax bill, you really want to ensure that you’re paying just the right amount. And guess what – inefficient financial systems aren’t the way to do this. You will have to hire an in-house accounting team if your business can justify the expense or rely on a tax agent at the end of every financial year. While this may cost some money, remember – you want to pay just the tax you rightfully owe. No more, no less.

Remuneration and Recruitment

While your staff are one of the many keys to success sometimes, they may ask for a raise. You need to be very careful here. Over-generous bosses can break an enterprise. You need to pay your staff while remaining efficient. Remember, you want to maintain your bottom line at all costs. If your team truly deserves a reward, but you can’t afford to increase their packet, consider alternative ways to show your gratitude. Offer flexible working arrangements like the option of working from home, or give them a few extra days leave a year.

Also, it can be tempting to recruit outside talent when you have a job that needs doing. Yet you need to consider if this is the best approach. Can you afford to take on someone full-time to perform this task? Is it possible to manage it part-time or via a short-term freelancer contract? Better yet – is there someone within your organisation who’s expressed a desire for a challenge recently? If so, throw them the work instead of wasting money on a new salary and benefits.

Watch Your Outgoings

You need to spend money to make money, right? We do not deny that at all. Yet, inefficient spending can cost you more than controlled, efficient spending. You may want to consider auditing all of your outgoings and see where you can cut costs. Often an enterprise can be bleeding money in a hard-to-see area. So take a careful look over your expenses and ensure that they’re kept in line.

Keep a Tight Ship

The lesson here is to keep a tight rein on your financial processes. Make proper use of technology such as accounting software, and ensure that you don’t pay too much tax to the government. Be prudent regarding staff remuneration and recruitment, and keep a careful eye on your outgoings. At the end of the day, you want to make some money, right?