How Can SMBs Decrease Complexities in Finance Departments?
With a decreased financial resources access and time constraints, SMBs face challenges in producing valuable, accurate, and timely financial calculations. Majority of SMBs typically operate their finances in utter chaos even with an accounting system at place. The traditional methods of managing and organizing finances opted by big enterprises are too time consuming, and complex for SMBs. Complexities are the main cause of this challenge. Although complexity is faced by all businesses, the larger enterprises have the luxury of recruiting the right human resource to decrease any complexity faced by the organization. This isn’t possible for SMBs as they have limited resources.
However, this doesn’t mean that there isn’t any solution for SMBs to manage their finances well. There are three major practices which the SMBs can implement in order to decrease the complexity in their finance departments and enhance efficiency. These practices are described below:
Centralizing the Finance Function
It is a time where businesses have gone beyond the collection of excel spreadsheets, even SMBs have moved past those data templates to more sophisticated finance management software. Companies require a standardized process to secure their business from any frauds and since SMBs risk more as compared to large enterprises, it even more crucial for them. With a limited amount of revenue, SMBs have low legal and financial resources to allot when audited which indicates that a software reducing complexity and limiting costs is a dire need within these organizations. A centralized finance management system can allow SMBs to discover simple and easy frameworks which would be rather beneficial for them. It will also help them in complying with the changing financial regulations in an efficient and streamlined manner while restricting the risks.
Automating Time-Consuming Processes
According to a survey, 7 out of 10 SMBs don’t have an automated expense management system and rely on outdated methods. SMBs must realize that an automated system can assist in decreasing the costs of expense claim transactions by 75% and decrease the expense processing time by 35%. Automated cloud based solutions offer significant value as they enable businesses to transfer main resources away from tactical and tedious tasks to the tasks with high value and bigger business impact. The lack of an automated system not just reduces the growth of the company but also effects supplier relationships. It is essential for SMBs to automate their systems in order to remain competitive.
Embracing Next Generation
Hiring can be a daunting experience for SMBs. They have to decide between selecting a candidate with years of experience or a young individual with a knack for finance and tech. however, the millennial pool of candidates are a more valuable resource for SMBs that must be tapped sooner. According to an IDC report, SMBs and Millennials have common views regarding technology. Both are comfortable with latest mobile capabilities and cloud-based resources, are interested in leveraging technology, and also have a strong interest in opting for efficient and better strategies to enhance the outcomes of business. The new generation offer immense value to SMBs as they can offer best technology solutions for challenges being faced by the company. This surely would give the SMBs a competitive advantage.
The finance related world of today doesn’t allow exemptions for businesses with few resources, it is important for SMBs to make their due diligence to stay competitive through automating and centralizing their financial functions and strengthening the finance department as this will benefit them in a long run.