Financial organization guidelines for small and large companies

 Financial organization is the goal of every company, but maintaining good financial control is not always easy for most managers.

It is recurrent for businesses to seek specialized help to solve problems in financial management, which in many cases become an apparently irreversible problem.

The financial organization consists of adopting certain financial indicators and the use of technological systems and tools that make the process possible. Having this control leads the company to the long-awaited balance of finances, adequate planning regarding investments (short, medium and long term), as well as making it possible to adequately structure emergency reserves.

Working in the corporate market for over 36 years and at the head of MORCONE Consultoria Empresarial, restoring financial health to companies of different segments and sizes, Carlos Moreira clarifies the essential practices of financial organization in companies, which, although everyone knows, are not applied as they should.

Organizational practices in finance that every business needs to apply

Here I share key guidelines that I apply in my consulting and mentoring, which help companies to regain control over their own finances.

Control and discipline

These are essential attributes for the good financial management of a company. The monitoring of performance indicators (revenue, fixed costs, total cost, nominal profit, etc.) needs to be carried out with the established frequency.

Separation of personal accounts from company accounts

This is one of the problems that, as obvious as it may seem to many people, is one of the most recurring! This kind of financial mess is what often gets companies into big trouble and even bankruptcy. The root of this lies in a mindset on the part of the entrepreneur that “everything is his” and then this separation becomes, in his view, unnecessary.

This leads the manager to not know exactly how much his company is profiting and prevents accounting from being able to perform the proper closing.

Working capital

This is the decision center of a company, because it is about the capital that your company has to maintain the constancy of its activities.

This is a key resource in which it is possible to balance the company's financial reserve with the amounts that will enter the cash register.

Companies that managed to circumvent the economic crisis in the pandemic were those that had up-to-date financial management and that had this “zeal” for working capital.

Define costs, income and expenses

For the financial organization in companies, it is essential that the business has its costs, revenues and expenses well defined.

Cost – related to the economic expense that the manufacture of a product or provision of a service requires to be carried out;

Revenues – represented by the amount received from the activities of this business;

Expenses – represented by all expenses necessary to obtain revenue.

Do you pay attention to deadlines?

The financial health of a company is also linked to meeting its payment deadlines (suppliers, maintenance bills, employee salaries, etc.).

The receipt period, also known as the average period, is also essential, as it is the calculation performed to find out the average receipt period for purchases in installments.

Stock management

Having good inventory management allows companies to accurately forecast the products that will have to be purchased and/or manufactured and also helps to avoid waste, after all, idle inventory is idle money!

Cash flow

Cash flow is an instrument that helps the company's management to understand and monitor cash inflows and outflows.

This ensures up-to-date bills and helps in planning future investments.

Try to keep what's working

Are you looking at your company in general? It is necessary to analyze negative and positive aspects in management.

What has brought good results, keep it, as for perceived errors, correct them as soon as possible.

Count on technological solutions to aid in financial management

Artificial intelligence (AI) and machine learning enable the automation of processes, which eliminates repetitive manual tasks and enables administration with a lower incidence of errors.

But it is necessary to analyze which software is suitable for the needs of the company. Some businesses, for example, work with more than one piece of software that are not unified, which generates information mismatch or greater difficulties when analyzing the data obtained.

The problem with postponing seeking help

Many entrepreneurs think this way and believe that they can carry on with unbalanced financial management for a longer time, in fact, time is the enemy of the solution and the longer you wait to solve it, the tendency is for things to get even worse.

Look for a professional who has market experience and is up to date on key trends. Ask for help as soon as possible so that the solution path is easier to execute.

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