In the long term, the success of any business rests upon how well it handles its money. If your finances aren’t fit for purpose, then it’s almost inevitable that your business will struggle.
Modern businesses have access to an impressive range of finance-related tools and techniques. By bringing these to bear, you might put yourself at a marked advantage.
Optimising cash flow
Cash flow is something that can make or break a business. If you don’t have sufficient liquidity, then you’ll struggle to pay your staff. This is why it’s imperative that you have a procedure for chasing up non-paying clients. A professional debt collection agency might do the job, allowing you to focus on running the business. You might also look to outside finance, to get you through any rough patches when it comes to cash flow.
Managing expenses
Keeping track of your ongoing expenses is critical. The best way to do this is with the help of digital tools – and some of the available options today are incredibly sophisticated. Regular review of your expenses will help you optimise them and cut areas of waste.
Getting audited
Your perspective on your own finances will naturally be skewed by your closeness to the business. By bringing in an outside auditor, you can be sure of an impartial view. Auditors may be able to provide insights that put your business on the road to financial stability. They might also be able to spot the early signs of financial problems before they have a chance to cause symptoms for your business. For these reasons, a business audit, conducted at regular intervals, can be vital.
Digital tax
Taxation is a great deal simpler if your financial records are clear and accessible. Again, this tends to mean digitising them. Through digital taxation, governments can do away with the need to store vast amounts of data. Ledgers can be distributed and encrypted. Digital taxation also tends to lessen the administrative burden on businesses.
Smart Contracts
One of the lesser-known advantages of blockchain technology is that it allows for the creation of so-called ‘smart contracts’. These contracts are actually programs designed to run whenever a list of conditions is wholly satisfied. The advantage here is that the terms of the digital contract cannot be altered once the agreement has been made – but this kind of agreement tends to be much more efficient and faster than traditional forms of contract.
For example, a retailer might use smart contracts to resolve disputes with its suppliers. This helps to improve visibility for interested parties up and down the supply chain, and helps to safeguard the financial interests of everyone involved.
