Remote work has acted as a reset button on all SMBs. As a result, every company has had to revisit its core functions and financials from scratch to ensure sustainable processes.
In addition to this, going remote has introduced broken processes and workflows, with Finance teams having zero insight into finances and no control over business expenditure. This topped with distributed employees, miscommunication, and spreadsheet-based expense reporting poses a serious threat to your business finances.
As a business owner, you might wonder, where do I start with fixing this problem?
Fret not; the following article is going to elaborate on everything you’d need to know to manage your company’s cash flow and business finances efficiently. It will also elaborate on different methods to help your organization sustain and scale during these uncertain times. Let’s dig in!
What challenges did remote work bring to cash flow management?
Traditional methods of cash flow management are already an ardent task for your Finance teams as it requires them to be in touch with every other department to get the job done. However, with remote work in the picture, the physical distance between employees makes it impossible to maintain the same levels of communication, and this is just a recipe for disaster.
Scratching your head and wondering how? We’ll show you what remote work does to your Finance teams:
Zero Communication and Collaboration.
As mentioned earlier, remote work has resulted in reduced and inefficient collaborations, extending redundant financial processes over weeks by being dependent on every other department to get the job done. This seriously harms your economic and employee productivity.
Zero control over business expenses.
Remember that remote work means no more in-house meetings or paper-based reports (you could, but then you’d have to send them over by mail, phew!) Unfortunately, this means your Finance teams will not have instant access to critical information or enough insights to back them while making financial decisions.
Think of it: How efficient will your expense policies or budgets be if you don’t have accurate and real-time data to back decision-makers?
A need to relook expense policies.
Old expense policies have now become redundant as remote work has changed the way a business incurs expenses. In addition, with Finance teams not knowing company-wide expenses, the expense management process becomes chaotic.
Broken traditional processes and workflows.
Finance teams can no longer just walk into an employee’s cubicle to gain clarifications on expense reports. If your process will require much human interaction, remember that remote work will cause it to fail.
When critical business processes are affected, they can undermine the sustenance of your business. Remember that a healthy financial balance and cash flow management process is at the center of every successful business.
Where can SMBs start with remote cash management?
- Understand the present state of your business’s cash flow, expenditure, and financial processes.
- Note what changes the transition to remote work has brought up and its impact on operations.
- Label each challenge as non-operational or operational while assigning them individual priorities.
- Ensure your team understands and makes use of automation-driven technology to solve mundane issues.
Pro-tip: Automating your payroll, expense management, and AP & AR is a great place to start.
How can SMBs manage cash flow effectively during remote work?
Understand the present state of your company’s finances.
Understand that to make “data-driven decisions,” your Finance teams need data. For example, before teams find ways to preserve finances, they need to understand the current state of business finances. This could mean analyzing your expense management process, income statements, and P&L statements.
Moving away from human intervention.
It’s no news that some aspects of financials are better handled by technology than humans. Every mundane part of your financial process, from data entry, verifications, or approvals, can be controlled by technology to free up more time for your employees while making these processes more accurate.
Leverage the power of cloud technology.
SMBs need to aptly use cloud tools if they’re looking to scale with remote work. Softwares also ensure strict policy compliance by streamlining all the mundane tasks in your financial processes, thus fixing any financial leaks in the system.
Here’s a list of software tools to get you started with automation:
Revise expense policies.
It is crucial to revise your expense policies and how employees submit reports to suit remote work better. Start with a policy revision and enforcement process to make sure the process feels more manageable for both employees and Finance teams alike.
This ensures that the entire company is in a position to report and track its expenses easily.
Be on the lookout for cost-saving mechanisms.
By using an expense report software, your business can use its advanced data analytics features to gain detailed insights into real-time expenses happening across the company – departments, projects, cost centers, policy violations, frequently used airline and hotel chains, etc. This will be all the data your Finance teams need to make better cost allocations and budgets and help them reduce costs through discounts, renegotiations, or possibly revising policies. For instance, it may make sense for your company to cut back on sales travel and instead invest in a quality webinar platform to be used whenever possible as opposed to business travel.
Cleaning up broken financial processes and workflows is essential for SMBs to adapt to these uncertain times.
Consider making the switch to automation-driven tech to handle all your error-prone tasks, for instance, using an expense software to automate your expense management process to gain more control over your business finances.
Change is inevitable, and every SMB would have different needs depending on their current circumstances. The whole point, though, is that you start the conversation around change.