Financial aspects are often one of the most difficult issues to manage for SMEs. Enhancing the participation of the financial environment in business strategy is essential for its success through five keys to take into account.
Correct financial management in SMEs is today a key issue to make correct business decisions having the appropriate economic information and understanding it.
Demystify financial information It is a pending issue in many small and medium-sized companies that, in a socioeconomic environment such as the current one, must face a series of concerns.
According Datisa, the reduction in profits and the growing number of invoices pending collection, as well as the increase in stock levels in the face of a slower sales rhythm would be two of the main concerns of SMEs.
To these would also be added the increasing competition and falling prices, the need to identify areas for improvement in commercial performance, and the lack of monitoring, measurements and follow-up.
This is what the commercial director of Datisa, Pablo Couso, points out, for whom the presence of the financier is gaining weight in the design of business strategies to make more intelligent use of economic information. “SMEs have evolved in their financial vision of the business. Now, those responsible are more aware of the impact of economic data, of the understanding and application of the information that these data provide for development in the short, medium and long term ”.
The financial priority in SMEs
Faced with these concerns, Datisa identifies five key questions that SMEs ask themselves and how to address them to successfully advance their businesses.
Why isn’t more cash available if the business is profitable? Without a doubt, this is one of the big questions to address when faced with the need to differentiate between profitability and cash flow.
For this it is necessary to perform schedules and simulations that allow you to clearly see the numbers and locate where the problem is and differentiate between earnings and cash.
If sales are up but there is less cash, the cash may be tied up in inventory, or in accounts receivable.
Knowing why our competitors are more profitable is another of the big questions that concern SMEs. However, it is important to understand a number of underlying financial indices when comparing businesses, such as gross and net margins, variable and fixed costs, and their impact on commercial profitability, among others.
This knowledge will allow to find the balance between all commercial operations.
Access to finance is another of the great current challenges for SMEs. At a time of economic slowdown, granting loans is not easy, so it is important to plan and simulate cash flow based on different scenarios, from the most optimistic to the most critical.
It must be taken into account that SMEs that have credible planning and projection, consistent information and a convincing business plan, have easier access to bank financing.
Otherwise, investing in internal financing sources, such as suppliers, may be a good alternative.
The payment of taxes It is another of the most common headaches in SMEs. Minimizing its impact is a key objective and companies must be up to date with the regulatory changes that may affect their business, as well as check that their tools to make these declarations are up to date.
In all these matters, the efficient use of technology can play a crucial role. To do this, especially if you lack knowledge or technological skills, it is essential to have solutions that are easy to use, intuitive and that help automate financial management.
But here it is also important that these solutions also incorporate services such as permanent education and quality support.
However, while technology is important, having a team of professionals behind it who offers support against any incident will be key for SMEs to be able to address these financial aspects from knowledge and the best efficiency for their businesses.
