Being a business owner takes planning, and one of the most important business aspects you have to manage is the financial health of your business. You need to plan, control, organize and understand the money that flows into and out of your business. Depending on the type of small business you run, you may be responsible for sending out invoices, following up on payments, paying bills and suppliers, buying equipment, paying employees, and approving budgets.
It’s a lot of work to manage your finances along with the rest of your business. These days, you can turn to financial management tools for small business that help you take control of your finances without requiring a lot of extra time or effort on your part. Many offer reports as well, so you can better plan and strategize your cash flow.
Here are some of the accounting tools used in financial management.
1. Accounting & cash flow tools
Accounting tools allow you to manage basic accounting tasks, including invoicing, expenses, recurring payments, payroll processing, and tax preparation. A good financial accounting tool for business decision-making will include a way to create customized invoices, track expenses, perform bank reconciliation, generate purchase orders, manage customers and vendors, and view reports.
2. Budgeting tools
A budget enables you to forecast how much money will flow into and out of your business. An effective budgeting tool allows you to create a financial plan that fits your needs and stick to it. Use reports from your accounting software to compare your actual financial situation to your budget so you can revise your plans or projections if needed.
3. Payroll management solutions
Payroll management is one of the more difficult aspects of financial management, and it’s prone to costly errors. As your business grows, you may find it’s too much for you to manage your own payroll.
A robust payroll management system streamlines the payroll process, reduces errors, and eliminates inefficiencies. Many payroll systems also integrate with your other accounting tools to give you a more comprehensive picture of your financial health. If you’re planning on growing your business, find a payroll solution that can scale as your business grows.
4. Financial dashboards
A financial dashboard allows you to track key performance indicators (KPIs), enabling you to measure whether your business is on track financially, allowing your team to pivot and invest at key points in your sales cycle.
This financial feedback empowers you to make crucial decisions to get your business back on track if you aren’t meeting your goals or add investments in key areas to take advantage within areas of growth.
5. Inventory management tools
If your business has inventory, you need a way to track it. Inventory management tools show you where your inventory is along the journey, from when you purchase an item to when a customer’s order is fulfilled. Additionally, inventory management tools generate sales reports and can be set up to automatically alert you when items in your inventory need restocking.
Look for a system tailored to your business and provides real-time visibility to your inventory. It’s also vital to have inventory software that integrates with your point-of-sale software to know how many items you have available in real-time.
6. Expense tracking tools
Gas, meals, and other seemingly minor purchases can significantly impact your company’s finances. If you have employees generating expenses, you need to know what is being spent and where.
Expense tracking tools generate reports, allow employees to scan receipts, and streamline the process of approving employee expenses, saving you time and money.
Although some accounting software integrates with expense tracking, not all do. Explore your options to see which expense tracking financial tools for business best help you. Just be careful not to purchase more than you need—small businesses don’t typically require the same type of expense tracking management that large corporations need. Choose expense software for small businesses that has the features best suited for your team.
7. E-commerce tools
Customers want the option of buying and paying for products and services online, making e-commerce vital for many businesses. Whether you want to set up an online storefront or just have an easy way for customers to pay you remotely, e-commerce tools make it more efficient to collect payment and increase your revenue.
Each of the above tools used in financial management has its own pros and cons and comes with its own pricing. It’s important you choose the financial management tool for small business that meets your needs and fits your budget. You’ll also need to consider how secure they are, whether they’re scalable, and whether cloud versus on-premise is best for you.
Purchases made with an American Express product may include additional reporting information to help you review expenses. American Express Merchant Offers for cardmembers may include deals and discounts on tools and software to support your business.
Visit American Express to learn more about options for small business owners or contact an American Express Specialist to discuss your needs.
This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. It should not be regarded as comprehensive or a substitute for professional advice.