Practical tips for good financial health

01. Practice the culture of saving

Corresponding Data“Although you have to invest money to make money, it is interesting to practice the culture of saving. Measure very well where you use the funds and most importantly evaluate the return on investment in terms of time and profitability. Prioritize spending and investments. For example, it is better to use internal sources of finance to avoid dependency on third parties. And if you have to make a choice, prioritize investments in training, innovation and people over other, less relevant expenses.”

02. Monitor cash flow

“The financial health of a company begins in everyday life. The maxim is quite simple: that the “effective” income is always higher than the expenses. When your business starts making small daily expenses, you’ll be in for a big problem sooner than you think. It is important to closely monitor income and expenses and draw red lines.”

03. Always keep tax obligations in mind

“Whether it’s quarterly earnings or annual taxes, tax burdens must always be on the mind of financial management. The best way to ensure taxes are not an additional burden for SMEs is to keep their accounts up to date. When the daily financial tasks are updated, it is easier to make complex decisions because the updated accounting provides economic information about the company. A real picture of the financial situation helps to plan better, analyze the results in terms of profitability and determine which area or function of the company could improve its performance,” they explain at Datisa.

04. Establish financial control processes

“They make it possible to evaluate and analyze the ‘real’ results of the company from different perspectives. The monitoring and follow-up of the results also facilitates the fulfillment of the set objectives. And by providing real-time information, you can design and implement driving or corrective actions as needed. It can therefore be said that controlling in the SME environment fulfills several functions: it identifies deviations, prevents risky situations, diagnoses incidents or errors and helps in decision-making.”