Best Practices for Business Financial Control

Companies of all sizes and areas should structure their financial management to ensure evolution, business sustainability and market competitiveness.


Best Practices for Business Financial Control

Companies of all sizes and areas should structure their financial management to ensure evolution, business sustainability and market competitiveness. Thus, adopting some corporate financial control practices is essential for smart resource management and achieving the objectives.

An internal financially scenario benefits a better decision-making, boosting the performance, generating a cycle of opportunities and more capital inflows. An inaccurate financial data, however, leads entrepreneurs to mistakes that can cost the business viability.

Thus, keeping finances organized, managing income, expenses and investments is critical. The financial control will day to day help the company to see clearly the real situation in which it is.

Check out the following practices to maintain business viability through corporate financial control:

Establish the prior planning and budget

Attention to planning and prior budgeting is a necessity, whatever the company's size or area of activity. This is an important step to stablish expenses, revenues, costs and investments, allowing the financial organization and goal setting.

Remember to consider expenses incurred in the future. Accruals prevent you from looking for bad financial solutions, such as preventable bank loans, for debt repayment when it comes to covering the expense.

The whole process provides an overview of the company's commitments, making it easier for the organization to meet all its obligations, as well as helping in the adoption of best practices for the maintenance of economic health and in the analysis of the results achieved, avoiding problems caused by mishandling of the budget.

Keep cash flow and deadlines under control

The inflows and outflows need to be monitored in order to understand the funds origin and destination. In this way, it is possible identify the generation of monthly cash whether expenses can be cleared or if there is a balance to be intended for investments.

The control is indispensable for budget management and not only enables the identification of all obligations, but also demonstrates which deadlines must be met to avoid fines and interest.

Monitor company’s banking transactions

The monitoring of banking transactions is also a management tool because as it portrays the finance-upgraded scenario. Bank balances, which are net assets, must be well managed, either to meet commitments or for investment purposes. Reliable information is critical to business planning.

Manage the financial investments

As good as business planning is, unforeseen events will happen. Dealing with unexpected expenses when you have a fund reserve has less impact on your financial health.

For this reason, it is important to allocate part of the cash to high liquidity investments that allow for quick redemption.

Another part of the capital may also be intended to more profitable investments to be used to reinvest in the business, whether in an expansion project or technological or management improvements.

Receive credit in a planned way

One must have caution in choosing suitable credit products and loan management.

The market offers specific products and lines of credit for different purposes and it is worth searching for options in line with the need, size and reality of the business. Costs, fees, limits and deadlines are linked to a number of variables.

Borrowing, since it is planned and well managed, can be useful to the company for its structuring and growth. Good financial control even helps in this planning. Evidence of financial stability through reliable numbers is also considered when negotiating conditions with the financial institution.

Use technology as a partner in corporate financial control

Spreadsheets or specialized software make the control easy, automate tasks, and cross-reference information with other areas of the company, streamlining processes and minimizing errors. Currently, technological tools are seen as indispensable, especially for larger companies with greater financial complexity.

Evaluate if it is moment to outsource financial processes

The corporate financial control routine is complex and may be consuming much time of the team. As formerly shown, all aspects that affect the budget must be under attention: unawareness of the cost structure, no control over banking, no provisioning, mismanagement of cash surpluses, and no investment of resources.

Relying on experts’ assistance puts the performance of corporate financial under the control of qualified professionals. In cases where it is necessary to focus at the core activity, optimizing time, costs and processes, it is worth considering specialized consultancy to take care of this area.

Operational solutions for the company to focus on its core business

Control of revenue and expense, cash flow, accounts payable, bank account management and investments are all operational tasks that can be outsourced to optimize the daily routine and improve internal processes and flows.

Domingues e Pinho Contadores has a specialized team exclusively dedicated to financial management. This team operates with agility, efficiency and confidentiality, always respecting the internal policies of its contractors and defining individualized solutions to provide companies with reliable reports to support the decision-making. Accessing these results, clients are able to understand the company's financial situation and are available to dedicate themselves even more to activities that require strategic action.

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