How does Financial Planning help with your Strategy for Your Company?

How does Financial Planning help with your Strategy for Your Company?

How does Financial Planning help with your Strategy for Your Company?

When it comes to accomplishing the goals, one of the most integral parts is financial planning.  It is planning that determines the future of a company – the better planning is, the more are the opportunities to succeed.

Companies deploy two types of planning; Strategic and financial planning. The principle of strategic planning is to assign a direction for the development/goal of your company.  To have a successful organization, you must be proficient in the way that you can terminate the major areas of inefficiency. With the help of financial planning, you can secure the future of your company and make its revenue to swell up. Financial planning not only enables you to meet your company’s needs but also assists you in devising a strategy for your business.

What is Financial Planning and how does it help?

Financial planning is the process of dealing/managing your accounts in a proper way that you can achieve your business goals without facing any/minimal loss. Financial planning assists in comparing various scenarios and enables a comprehensive understanding of the process of how revenues are generated and how cash is expended in the business. Eventually, it becomes an essential factor in determining the areas in which the company needs to improve.

Financial planning consists of 4 main points

  1. Prioritizing Expenditures
  2. Investment plan
  3. Taking debt or loan
  4. Savings

How is Financial Planning done?

There are 6 steps that play a pivotal role in financial planning.

  • Establishing the goal
  • Collecting data
  • Comprehensive data analysis
  • Developing a plan
  • Executing the plan
  • Complete monitoring of the plan

All these points, if followed correctly, lead to an impeccable financial plan for a company, and they all play an essential part in organizing a business. Without financial planning, a business cannot run profitably. It is because financial planning helps in comprehending the economics of a business by analyzing financial reports and collecting data periodically. This also means that financial planning assists in managing accounts and future investments if needed to be done. The statistics that are recorded enable a company to compute economic ratios such as having the status of some profit margin and yielding arranged investment. Statistic provides helpful information about a company’s liquidity, profitability, debt, operating performance, cash flow and investment evaluation.

The bottom line is that strategic and financial planning is always entangled in a business and they work together in a recurring way. Any change to your budget requires a reassessment of the existing strategy in place. Sometimes budget changes are significant enough that you have to change what you are doing administratively. If you want to change your strategy, you must first confirm that you have the means to do so or how you will get it. The company with strong financial hold performs efficiently in the long run and delivers as per the vision and the mission. A company with stable financial records enjoys stability in every department. Employees, investors, and clients are more likely to stay with the company which has a strong financial setup. Therefore, it can be said without a single doubt that financial planning helps a lot with your strategy for your business.

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7 Best Practices for QuickBooks Online

7 Best Practices for QuickBooks Online

Even if you’ve been using QuickBooks Online for a long time, it’s good to step back and evaluate your actions.

“Best practices” aren’t enforceable rules. They’re simply guidelines businesses commonly follow in one area or another. If you’re in retail, for example, one best practice might be to always ask customers checking out if they found everything they were looking for. This serves two purposes: It conveys a feeling of concern for the customer’s shopping experience, and it may also lead to increased sales.

QuickBooks Online has many best practices, some of which may serve multiple purposes, including these:

  • They keep your company data safe and clean.
  • They provide insight on your financial status.
  • They save time.
  • They can lead you to better relationships with customers and vendors.

Are any or all the following common practices for your business?

1. Reconcile accounts regularly.

One of QuickBooks Online’s most useful features is its ability to connect to your financial institution’s websites and download cleared transactions. QuickBooks Online also offers tools to help you keep your accounts reconciled online like you used to do every month when your paper statement came. Reconciling accounts can help you uncover errors. It gives you a truer picture of your cash flow, and it improves the accuracy and timeliness of some reports.

It’s not a particularly pleasant process, but you should be reconciling your accounts regularly in QuickBooks Online. We can help.

2. Clean up your lists.

Some lists in QuickBooks Online aren’t overly long. You don’t have to worry about, for example, Payment Methods, Terms, or Classes. Your lists of customers and vendors, products, and services, on the other hand, can grow unwieldy over the years. This means it can take more time than it should be scrolling through lists when you’re using those entities in transactions. It also puts unnecessary stress on your company file. If you can’t delete any, at least make them inactive.

3. Never leave QuickBooks Online open when you leave your work area.

This goes for everyone, even people who work alone and don’t access their company files away from their work areas. The obvious reason is to keep someone else from getting in and authorizing payments, for example, or otherwise compromising your financial information. It also protects the integrity of your data file in case your internet connection suffers some kind of outage.

4. Keep track of 1099 vendors.

Whether your company uses 10 vendors or a hundred or more, you may have to supply at least some of them with an IRS Form 1099 at about the same time you’re preparing W-2s for employees. Your 1099-related tasks will be much easier if those individuals and/or companies are earmarked. If you think vendors might need 1099s when you create their records in QuickBooks Online, click in the box to the left of Track payments for 1099 in the lower right corner. Not sure? Ask us.

5. Classify everything with care.

Every time you have to create a record or transaction where categories are involved (i.e., Classes, Customers and Vendors, Territories), check and double-check that you’ve assigned them the correct classification. Errors here can result not only in problems with daily workflow, but your reports will not be accurate.

6. Create a meaningful group of Classes, and use them faithfully.

They’ll help you make better business decisions.

To create your list of Classes, click the gear icon in the upper right and select All Lists | Classes | New.

7. View reports on a regular basis.

There are some advanced financial reports in QuickBooks Online that we should be creating for you on a regular basis, either monthly or quarterly. These include Profit and Loss, Balance Sheet, and Statement of Cash Flows. The mechanics of creating them aren’t difficult, but analyzing them is. You should be running reports on your own at frequencies that you think would be helpful, like A/R Aging Detail, Unpaid Bills, and Sales by Class Detail.

If you’ve been using QuickBooks Online for a while, you could probably come up with your own list of best practices. If you’re new to the site, consider scheduling some time with us to go over more of them. Develop good habits from the start, and there won’t be nearly as much need for troubleshooting down the road.

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