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October 26, 2019

Financial Planning for Your Business


Since the advent of the digital revolution, the world of finance has seen dramatic changes to the way in which companies and financiers model their projected growth and their business finances. In an age of advanced Excel techniques and even more advanced algorithmic innovation, it’s important for businesses to stay ahead of this development curve in order to understand their financial data in ever-increasing detail. Without the insights generated by such innovation, those companies without sound financial modeling look set to lose out in the business world. Here are some tried-and-tested methods to get on top of your financial data.

Hire Staff

The simplest way to bring in new financial analysis skills to your company is simply to hire an experienced CFO to help you understand the monetary ins and outs that power your business. Without such skills, you’ll have to either develop them in-house, or get a consultant on board – both of which cost a great deal of money in the long-run. Keep an eye out on the human resources market for individuals you might be able to poach from other companies in order to find the very best skills to match with your company going forwards.

Training

While it’s not advised that you train a financial specialist up from scratch, there are ways in which you can help your staff get to grips with the data, financial and otherwise, that passes through your company each day. One of the best courses here is the Six Sigma training module, which can help you staff understand digital processes with more clarity, having a beneficial knock-on effect on the financial health of your company. If your staff are able to provide condensed data sets to your CFO, your company will be able to make the most of the data insights that other companies are unable to harness.

Algorithms

The stage beyond sound financial modeling, on programs such as Excel, is to find those algorithms that’ll help you predict your current and future spending. You can purchase these on the market, download them in software packages, or simply work on them in-house in order to create a bespoke set of algorithms that are designed to perfectly equip your company with the numbers and the insights that you need. Search for information on these algorithms online in order to benefit from them.

Auditing

Another tried-and-tested way to improve your company finances is also the most simple method: to fully audit your company every now and then in order to get the fullest picture of your overheads, your investments, your payroll and other ins and outs that constitute, together, a full financial picture of your company. Auditing can happen in-house or through external means, but in both cases it’ll help you understand not only where your money is coming from and what its being spent on, but what you might be able to change in order to create a sound and solid financial plan for the future. 

These tips will help you financial model with prowess now and into the future. 

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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