September 5, 2018 8:42 PM
As much as it may seem like a world of fun and freedom, being an entrepreneur is a lot of hard work. From working overtime even on days you don't feel like it to having to spend more than your initial budget, this job is taxing and time-consuming. As hard as this sounds already, it could be worse if you don't diligently plan how your finances, services, and revenues should be. Your business could really hit bottom if you don't make use of the necessary tools created to make your business easier and more effective.
Financial tools are important to monitor your business and ensure its continuous growth and survival in this competitive world. They not only help you monitor your business but also predict the future steps your business should take after proper analysis. Indeed, these tools are essential if you aspire to grow bigger and better.
Thankfully, there are numerous financial tools you can use to help your business grow and thrive. Here are five key categories.
1. Budgeting Tools
Budgeting tools are necessary to summarize the intended expenses of your business, which helps you determine your gross business turnover.
For your business to succeed, budgeting your funds is the first thing you must do. This is because having a budget helps you understand your cash flow and control your finances better. Budgeting also helps you make the best financial decisions with pre-informed knowledge.
A budget would only be effective if it is well prepared. A badly drawn budget might be even worse than no budget. It is vital that as you prepare your budget to deliver its best, you give it your maximum devotion and be honest in stating the facts. Constantly reviewing your budget is necessary as certain factors might affect your business cash flow, hence the need to restructure your budget to tally with your current income.
Most entrepreneurs have their budgets on cloud-based budgeting software because it is less expensive and easier to manage. Some helpful budgeting software you should check out include:
• Scoro, which combines other financial tools to help you excellently budget and plan
• Prophix, which helps you budget easily as it is easy to use
• Others, like GIDE, Centage, etc.
These tools work excellently with other financial tools to perform top-notch services.
2. Bookkeeping Tools
Bookkeeping tools are simply software to keep up-to-date records of all financial transactions, even the smallest amounts used, in the order in which they were carried out.
These tools help you track transactions, efficiently estimate profits, and generate invoices. They also help you pay your taxes well, ensuring your finances are kept orderly. It's the best way for business owners to expand and follow where their money goes easily.
Proper bookkeeping is crucial as it is needed to access your business information to make better financial decisions. It also helps you measure your business performance and finds ways to achieve your total revenue goals.
Some tools you could use for efficient bookkeeping include:
• QuickBooks, which tops the list of bookkeeping software as the best for any business size, recording all transactions, receipts, revenue, and expenses for all kinds of business
• Xero, which works best for smaller business enterprises
• Wave, which offers the best bookkeeping practices for free
• Others, like Freshbooks, Kashoo, OneUp, etc.
These tools offer some of the best bookkeeping services for entrepreneurs.
3. Cash Flow Forecasting Tools
These are tools used to plan and estimate cash revenue and expenditures for the future. Cash flow forecasting is of great importance to entrepreneurs to make informed business predictions and set targeted goals.
Cash flow forecasting techniques predict profits, analyze sales, and develop a better work method using predictions based on proper analysis of your business's current cash flow. This process involves identifying relevant issues that would determine the business's finances in the long run to choose the model that would best tackle these issues in the future, impacting how you spend for your business requirements.
The cash flow forecast provides important help in making the best business decisions. It pre-informs the future planning process about identifying periods of low financial strength and high cash turnover.
These tools inform the business of present cash flow patterns, shaping the future business ideas by identifying areas to be reviewed for growth in your business.
Some of the best cash flow forecasting tools include:
• PlanGuru, which entrepreneurs analyze finances and model expenditures and income, and then integrate those into a larger cash flow sheet
• Float, which gives you a clear pictorial view of your past and present data so you can make careful plans for the future
• Others, like Pulse, CashAnalytics, etc.
4. Inventory Management Tools
These are tools used to effectively manage all available valuable products for a business. This involves knowing the worth of all available stock, which could be raw materials or services.
Inventory management compiles all goods and their costs, which directly affects your business's profits, turnover assets, and liabilities. Having a tool to manage your inventory helps you know the worth of what still keeps you in business.
Some of the software entrepreneurs use for efficient inventory management are:
• Cin7, which works best in assembling total stock of goods and services
• Veeqo, the easiest inventory software to use
• Inflow, a free excellent inventory interface
• Others, like Fishbowl, Ordoro, etc.
5. Expense Tracking Tools
As business owners, your constant diligence might just be futile if you don't properly track and account for the money you spend. It is advisable to reduce spending in cash as cash is more difficult to fully track.
Expense tracking involves scanning receipts, monitoring business expenditures, and creating expenditure reports.
Some of the software used for tracking expenditures include:
• Mint, which offers one of the best functionalities for billing reports, storing and tracking business expenditures.
• Zoho Expense records all transactions, directly tracking your business expenses.
• Others, like Clarity Money, Recieptmate, Fyle, etc.