The number of businesses in the US is picking up, with Forbes reporting that 5.4 million new businesses sprouted in the United States in 2021. However, only 35% are expected to last over the next ten years. This aligns with the Bureau of Labor Statistics findings, which indicate that about 20% of small businesses fail within the first year. The primary driving factor behind this is poor financial management; the US Bank estimates this is why 82% of companies shutter. As challenging as it can be to maintain and manage finances, it is essential to your enterprise’s long-term health and continued growth. It allows you to effectively use your resources without falling behind on customer and stakeholder commitments. If you are a business owner, take heed of the following tips to help you gain control over your finances:
Improve inventory management
Inventory management is a vital element of revenue-centered financial management for product-based businesses. According to an RSM US survey, 60% of enterprises expect inventory levels, and the challenges surrounding keeping more inventory, to increase. However, many enterprises can’t effectively manage their products or materials, which can hurt their bottom line. Too much stock eats up valuable cash resources, while too little inventory may result in unsatisfied customers who will take their business to the competition. Entrepreneurs should implement a software-based inventory management system that limits the misallocation of resources. Ideally, this integrates seamlessly with existing point-of-sale systems and provides accurate, real-time inventory data. A clear view of your stock levels allows you to efficiently forecast upcoming demand, freeing up cash resources to invest in products that generate profit.
Use efficient technologies
Financial management is an ongoing process that needs to evolve with business needs and revenue goals. Poor financial planning could lead to high debt, damaged reputation, and, at worst, business failure. Along with the human efforts of your finance team, technology can provide support and visibility. To enhance efficiency in this aspect, Softrax’s revenue management solutions deliver high-level, system-wide automation to streamline and optimize revenue management. Migrating from legacy core business systems, the system simultaneously accounts for exchange rate, tax, and payment data. Operationalizing this massive accounting shift is easier for business owners as the software integrates seamlessly with CRM, CPQ, and even homegrown systems to create a path toward total back-office automation, allowing entrepreneurs to spend less time managing revenue and more time finding strategic ways to enhance it.
Conclusion
In our “3 Essential Rules to Get Hybrid Work Right” article we talked about how empowering employees with communication technology aids in business profitability. Efficient internal communication systems allow for revenue-affecting issues to be reported more quickly, allowing finance teams to work with vendors, clients, and other stakeholders. This is where we come in: Carolina Digital Phone’s products offer a flexible, scalable, and cost-effective communication solution for your business to improve efficiency, enhance customer experience, and ultimately increase revenue. With cloud voice, video conferencing, and bulk text messaging capabilities, finance teams can maintain open lines of communication wherever they are and stay on top of any issues. If your customers feel you are responsive and reachable, you increase the likelihood of their repeat business.
By prioritizing efficiency in inventory management, striving for full automation in your finance system, and streamlining communication channels between employees and customers, you can create a solid foundation for well-managed finances. Over time, this translates into robust revenue that is not only scalable but also future-proof.