Financial structuring: 6 mistakes that indicate your company needs a

It is common to hear from managers that the financial management of the business is in the background, and that they do not do it on purpose.

When there are no defined sectors within the company, most entrepreneurs strive to fulfill the tasks of several sectors at the same time, including finance.

Although common, it is extremely dangerous for the business, especially for those looking for growth and increased revenue.

Today, in this post, we will show that there are several reasons why a company needs a financial structuring.

Therefore, it is very important that you, the manager, identify if there is, in your company, one of these signs that we will show you below.

Use only paper for financial control

In the midst of so much technology and innovation, writing down company financial information in notebooks seems like an extinct activity, but there are still companies that do this manual financial control.

And this is a habit that must be changed immediately, and we will explain why.

The adoption of a management system, which makes the company's financial control process efficient, will provide more security and enable the use of artificial intelligence as an ally in the decision-making process, in addition to ensuring general control.

In addition, the information will be compiled in one place, providing agility in the search for some information.

Mix personal and company finances

Although it is obvious that it is a practice that should not be adopted, many companies still fall into this error, and are unable to unscramble the two accounts.

Thus, they cannot be clear about the company's fixed and variable costs, how much it is profiting, among other economic indicators.

Without this information, it is not possible to have a good financial planning, forecast income and expenses, identify possible bottlenecks, in short, make a correct financial management.

In this scenario, financial structuring is absolutely necessary, to make this separation correctly, so that the company will be able to know what level of maturity it is at and what actions it can take in a realistic scenario.

Because, without this certainty, decisions will be based on "guess", and this is an attitude that should be avoided as much as possible.

Think only about the “bigger” costs

It is very common for companies to prioritize large costs such as personnel expenses, taxes, electricity and rent.

However, leaving small expenses in the background can lead to a waste of financial resources.

Accounts such as telephony, water, and even reams of paper, deserve attention, and it is the manager's role to constantly check if the inputs generated from these small costs meet the company's current reality.

Ex.: Does the amount paid in the current telephone plan still meet the company's needs, or is it an expense that can be renegotiated for a more basic plan?

A small change like this can bring benefits in the long run, but only with good control will you identify these small points of improvement.

Not paying attention to seasonality

Regardless of the type of product/service being sold, some external events can directly influence sales, causing the so-called seasonality.

Not paying attention to the seasonality of the market, will make it impossible for the business to have a cash flow with forecasts that observe these demands, and how these will impact the financial obligations of companies.

The manager, based on a well-done financial planning, aligned with a calendar with external events that influence the results of his business, will be able to see in advance, the times of surplus and deficit of his income and expenses, in order to take precautions.

Not knowing how much your production costs

Not knowing the costs involved in production is another sign that financial control is not being done in the best way, and needs to be restructured.

It is necessary to know, in addition to the sale price, which are the fixed and variable costs involved in the elaboration of the products and/or services sold.

From the knowledge of this information it is possible to have a sales price that covers all production costs and still makes a profit for the organization.

The use of good stock control and even product technical sheets are essential for the company's financial sector to be efficient, and to operate with real and reliable data.

Think you need more money for the planning to work

First of all, it is necessary to understand that a financial structure must be based not on what you want to have, but on what you have.

As a manager, focus on your current financial results, and what actions you can take so that expenses do not exceed your income.

There are businesses that even earning millions, because there is no good control over their finances, end up sinking into debt and having serious financial problems.

Therefore, it is important to have great goals, and aim for the growth of your company; however, for this to happen, you must have a good management of the resources you have today.

Conclusion

The financial structuring process is not complex, however it must be well thought out and planned so that it does not become a bad strategy within the organization

Surround yourself with the right team and resources; your company is more likely to maintain a stable and balanced financial health!

In this post, we show you some signs that your company needs financial structuring. Have you identified any of these signs in your business?

Posted by: John Labunski

Digital communication consultant. I deal with Strategy and Digital Communication. Web & Digital Manager, SEO, eCommerce, Content, Social Media. Songwriter, Guitar Player, and then anyway I look at everything.