Blogs Archives - Finsights Solutions

Oct 20

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Marketing your Business in the Midst of Covid-19: 7 Things to do Now

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Marketing your Business in the Midst of Covid-19: 7 Things to do Now

We’re all struggling with how to market ourselves during the pandemic. Not because we’re greedy, but because we have to survive.

Here’s how you should be changing your marketing approach.

Be realistic about your offerings. Scale back to market only your most critical offerings—your customers “must” have’s and stop marketing anything else.
Don’t be tone deaf right now. Acknowledge the new environment of the pandemic. Don’t be tone-deaf or opportunistic. Your customers are worried, and some are scared. Acknowledge this, and write and market accordingly.
Focus on relationships. The pandemic will pass. Every interaction you have with your customers (see #2 above) will have an impact. If you’re ethical and helpful, they’ll remember you, stick with you and (if they can’t) return as customers when they can. If you are opportunistic, they’ll leave you for life. Don’t mess this one up.
Think about what your customers need from you and provide as much free and helpful advice as you can. Are you an HVAC company? Many customers might be reluctant to pay for a service person to tackle projects right now. Consider sending them basic HVAC tips that they can do themselves to keep things running. Are you a gym facing a dropoff in customers? Instead of encouraging them to come in, consider telling them that if they’re not comfortable coming in, they should continue their fitness routine at home, and send them a useful video for a 20-minute cardio workout. You get the idea.
Turn off all marketing campaigns (including automated social media tweets, posts, and paid ads). Pivot to campaigns that are more serious (see #2) or do nothing at all.
Adapt. Change your approach to meet your business capabilities, right now. Perhaps you’re short-staffed or cutting back on some services. Focus on fewer things, and do them well. It is not business as usual right now. You must adapt.
Be empathetic. Be patient with your employees and contractors, your vendors, and your customers. Expect (and understand) requests for cancellations and refunds, and handle those in the most empathetic, and flexible way. We are all in this together, and everyone is in a different place, trying to figure out what the “new normal” means for them during this pandemic.

Your customers will remember how you interacted with them during this crisis. And, for better or for worse, those interactions will become your brand.

Oct 13

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How to set up a Yoga or Meditation Centre, Advice from an Accountant

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How to set up a Yoga or Meditation Centre, Advice from an Accountant

Most of the yoga centre owners have the passion for yoga and would not want to get into yoga for business management; you just want to run a centre because you love what you do.

No matter what business you are in having a true passion and love for what you do is what leads to running a successful business. If you are wondering how to open a yoga or meditation centre, plenty of advice from a business as mentioned below:

Find a CA and Lawyer

The first thing I would do is find a good lawyer and CA. So the obvious question is how do you find a good lawyer and CA to work with? I would definitely start with tapping your business network.

Ask other yoga centre owners who they use and why. See if you can find a CA and lawyer that have experience with other businesses in the yoga industry.

You will want a good lawyer to make sure you have the business set up properly and protected. They should be able to give you advice on the type of insurance to carry.

A CA will play a crucial role in your big picture tax and financial planning items. Having a good lawyer and CA will also help you choose the correct entity type for your yoga centre.

Choose an Entity Type

I would definitely have a conversation with both my lawyer and CA to choose the correct entity type. The entity type should take into consideration items such as liability concerns and big picture tax planning.

Having a conversation with both will help you choose the entity type that is right for your business as well as your personal situation.

Your CA and lawyer will also be able to help you file the correct paperwork with the state and central agencies to ensure that you are set up properly and legally with the government.

Yoga Centre POS System

Let’s get to the fun stuff; bringing money into the bank. You are not going to stand at the entrance with a bank bag full of money, you need to look professional. These days most consumers want the flexibility to be able to pay how they want.

The last thing you want is potential customers choosing another centre because they are keeping up with the times.

I have found that many yoga centre prefer to use the POS software throughout the industry for the functionality and affordability of the product.

Bookkeeping for a Yoga Centre

When you start your centre you are going to need a way to track the finances of the business, so you need to set up a bookkeeping system (I know you just cringed at the word). We highly recommend using QuickBooks Pro for windows at the very least.

To really over simplify the bookkeeping system for your yoga centre you need to be able to track the money that comes in and leaves your business.

Your money going out can be easily recorded by tracking your credit card purchases and checks written to vendors. We highly recommend doing as much digitally through credit and debit card payments as well as utilizing online bill pay.

Payroll and Independent Contractors

Payroll – You can handle the payroll needs yourself through QuickBooks assisted payroll or have your CA handle it. Outsourced payroll companies are very competitive and it is no secret that they don’t make much money on the payroll service itself.

Independent Contractors – Independent contractors are a touchy subject for yoga centres. I have seen many centres go through a wage audit and have their yoga instructors reclassified from independent contractors to employees. The back payroll taxes owed can be detrimental for many centres.

You want to make sure you follow the independent contractor rules for your state and make sure you get all of the proper documentation. This is an area I would highly recommend getting some advice on from your CA.

Financial Reporting

Having small business financial reporting in place for your centre is important no matter how small your centre is. You should develop a set of reports with your accountant that you review on a regular basis. If you are not analyzing financial reports regularly then you are running your business blind.

At the very least you want to learn how to run a simple profit & loss and learn how to compare that to previous periods. You should also understand the balance sheet for your business and what it means to the health of your business.

Avoiding or disregarding your financial reporting can give you a false sense of if your centre is succeeding or not.

Filing Taxes

I highly recommend that you consult with an excellent CA on all tax related issues.

In a very simple approach to taxes I would say you can break things down into payroll taxes and independent contractors, sales taxes and income taxes.

Setting up a yoga or meditation centre is not much different from starting any other business. However, if you are new to business you may not know all of the proper steps you need to take to set your yoga centre up properly the first time.

If you need any help along the way please don’t hesitate to reach out to us.

Oct 06

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5 Bookkeeping Mistakes That Will Have You Overpay Taxes and Can’t Afford:

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5 Bookkeeping Mistakes That Will Have You Overpay Taxes and Can’t Afford

As a small business, there are many bookkeeping mistakes you just can’t afford to make.

A small mistake can mean a minor setback in your operations. Some larger ones can have you overpay taxes. There is not a company anywhere that wants to pay more tax than they legally have to.

That is why it is so important to make sure that bookkeeping mistakes are not resulting in overpaid taxes.

Furthermore, a big mistake could put you out of business. Here are five bookkeeping mistakes will have you overpay taxes and that flat out you can’t afford to make.

1. Mistakes in Payroll Reporting

Payroll reporting can be a problem if your bookkeeper does not understand how to enter the data correctly. The gross wages need to be on the income statement not the net paid out. Often this is missed when a non-trained person handles the books.

Fixed assets need to be appropriately recorded. Depreciation is only correct if the asset has not been expensed in error.

2. Improper Reconciliation

Balance sheet accounts need to be reconciled monthly. By year-end, it takes a lot of work to go back through twelve months to find out a double posting was made or that the cash account has not been reconciled. Duplicate entries will throw tax calculations off.

Any account that has a statement beginning and ending balance can be reconciled. This includes bank accounts, credit cards, loans, lines of credit etc.

Many businesses not only fail to reconcile all of their accounts, but they don’t even reconcile the key business accounts such as the general checking account.

Reconciling your accounts is the only way to be sure you have accounted for all of your business activity. It also can help to ensure you have not overstated or understated your income or expenses. Accurate financial statements are crucial to the future success of your business.

3. Hiring Untrained Bookkeepers

Untrained bookkeepers often do not understand how an entry can cause so much time and trouble. Trained bookkeepers know that a prior year adjustment is not something to consider lightly. These kinds of changes can cause significant tax problems and are not easy to find and fix.

Small business can sometimes have a bookkeeper that is not fully trained. There are many reasons this happens.

When small businesses first get started, they may not think they need bookkeeping help. This means that the owner or the office manager may well be doing the accounting along with their other jobs. This puts additional work on someone who already has a full-time job.

4. Misreporting of income or expenses

When a small business owner takes on the task of bookkeeping on their own, mistakes are frequent. One of the biggest and most common mistakes is over-reporting or underreporting of income or expenses.

It really is not that difficult to make a huge mistake if you are not 100% sure of what you are doing. As an example, if you don’t know how to handle the procedures of invoicing and accurately recording payments in QuickBooks, you will most likely overstate your income.

Likewise, we often see businesses miscode transactions which will either overstate or understate your expenses. The most common example is the owner draws being recorded as an expense which is incorrect.

5. Not using checks and balances

Many business owners are too trusting, and unfortunately, this often leads to bookkeeper theft.

By installing the proper checks and balances into your bookkeeping system, you can be sure your bookkeeper is not stealing from you. A few simple tips are that a bookkeeper should never have the authority to sign checks, use online bill pay or handle cash.

Sep 29

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Artificial Intelligence – Significant Impact in Accounting and Finance

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Artificial Intelligence – Significant Impact in Accounting and Finance

As artificial intelligence has done for every industry, it’s making a significant impact in the world of accounting and finance.

From saving time and money and providing insights, AI-enabled systems for accounting and finance are the way finance professionals and their firms will stay competitive and attract the next generation as employees and customers.

If you could reduce costs by 80 per cent and the time it takes to perform tasks by 80 or 90 per cent, would you be interested? According to Accenture Consulting, robotic process automation will yield these results for the financial services industry.

For accounting firms and finance professionals to deliver services their clients will demand and compete with other professionals for business, they must begin to embrace artificial intelligence.

Benefits of Artificial Intelligence for Accountants and Finance Professionals

New technology is changing the way people work in every industry. Artificial intelligence can help accountants be more productive and efficient. An 80-90 per cent reduction in the time it takes to do tasks will allow human accountants to be more focused on providing counsel to their clients. Adding artificial intelligence to accounting operations will also increase the quality because errors will be reduced.

When accounting firms adopt artificial intelligence to their practise, the firm becomes more attractive as an employer and service provider to millennials and Gen Z professionals. As clients, millennials and Gen Zers will determine who to do business with based on the service offerings they can provide. As more accounting firms adopt artificial intelligence, they will be able to provide the data insights made possible by automation while those who don’t commit to the technology will not be able to compete.

Robotic process automation allows machines or AI workers to complete repetitive, time-consuming tasks in business processes such as document analysis and handling that are plentiful in accounting. Once RPA is in place, time accountants used to spend on these tasks is now available for more strategic and advisory work. Intelligent automation is a more sophisticated version of RPA. IA can mimic human interaction in many cases, such as understanding inferred meaning in client communication and using historical data to adapt to an activity. There are multiple applications of RPA and IA in accounting work.

AI can often provide real-time status of financial matters since it can process documents using natural language processing and computer vision faster than ever making daily reporting possible and inexpensive. Automated authorization and processing of documents with AI technology will enhance several internal accounting processes including procurement and purchasing, invoicing, purchase orders, expense reports, accounts payable and receivables, and more.

In accounting, there are many internal corporate, local, state and federal regulations that must be followed. Fraud costs companies collectively billions of dollars each year and financial services companies have $2.92 in costs for every dollar of fraud.

Changing the Human Mindset

It seems like the only barrier to artificial intelligence adoption in accounting is getting people on board with the change. Since the chief executives seem to understand the importance of artificial intelligence, it just requires a mindset shift from the accounting professionals to accept the changes. With an assist from AI-enabled systems, accountants are freed up to build relationships with their clients and deliver critical insights.

To help accountants accept and hopefully embrace the tech addition to accounting firms, it’s vital that the benefits of automation and artificial intelligence are shared with them and they are provided with the proper training and any support necessary to learn how best to use AI to their advantage. AI and automation in accounting and finance are just beginning. The technology is getting more sophisticated, and the tools and systems available to support accounting are expanding at a rapid pace.

Sep 22

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Positive Work Culture are linked to Employee Productivity

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Positive Work Culture are linked to Employee Productivity

Strong productivity is the result of many things, but it starts with an award-winning culture. Think about it for a moment. If your employee wakes up in the morning and is already dreading going to work, how productive are they really going to be? But when you have an employee that is excited for work because of the people they get to work with and the culture they get to be immersed in, then that leads to a much more productive experience. When someone doesn’t want to be in the office, it’s less likely that they will spend their time being productive.

Productivity in the workplace is something that many business owners and managers struggle with. Trying to get your employees to focus and get work done can be difficult and frustrating. But if employees are finding it difficult to be productive at work, that may mean something is wrong with the culture in the office.

Creating a positive work culture can do wonders for productivity in the office. Here are some reasons why:

Positive Work Culture Leads to Happier Employees

When someone dreads going to work, they are likely to drag their feet and complain internally all day. They might stare at the clock and count down the hours until 5 p.m. rolls around. In short, they’ll probably do the bare minimum they need to do to get by.

On the other hand, if you establish a work culture that your employees are excited to be a part of, then productivity will increase. In a study by economists at the University of Warwick found that happiness led to a 12% spike of productivity while unhappy employees proved to be 10% less productive.

If team members are happy at work then they are more likely to be better collaborators, work to achieve common goals, and be more creative in finding solutions to problems. Happy employees are more likely to exceed expectations which means that your entire office can get more done. Also, if your employees are happy then they are more likely to stick around. When your company doesn’t have to spend time on interviewing, hiring, and training new people then you can focus on other things that will boost productivity in the office.

Positive Work Culture Impacts Engagement

Does your company’s culture make employees feel excited and connected to the work they are doing? If not, it’s time to make some adjustments. The culture of the company is an important factor in an employee’s level of engagement. When an employee is engaged in an office setting, they look at the company as a whole. They understand their purpose, as well as where and how they fit in. Employees that don’t feel any engagement to their work will just show up for a paycheck—nothing else.

When employees are highly engaged, they treat the company as if they are an actual owner of the business because they are proud to be a part of it. They care more about the results they are producing, which means they will be more productive and work to produce their best work possible.

Positive Work Culture Inspires Good Ideas

Instead of building walls, your team needs to build bridges—and great company culture does just that. There is always a hierarchy in an office. From bosses and managers to entry-level and interns, everyone knows who they report to. If those higher up in the hierarchy seem intimidating or like they would laugh at your idea to have the company picnic at a trampoline park, then employees are less likely to speak up.

A positive work culture encourages employees of all experience levels to be fully invested in the projects and tasks they’re assigned. When employees feel like they are able to speak, they are more likely to share what they think is the best idea to solve a problem or a way to make a product or service better. They won’t feel like they need to keep their ideas to themselves for the fear of it not being good enough or laughed at. New perspectives are always important for being productive.

Positive Work Cultures Promotes Collaboration

In a positive work environment, employees will feel encouraged to get to know their co-workers and team members. When the culture allows and encourages you to chat, spend time in the office, grab lunch, and truly get to know the people you spend every day with then everyone will feel more comfortable when sharing ideas and allow themselves to be more creative.

Collaboration is a huge part of a productive work environment. When teams collaborate to solve problems then work gets done better and more efficiently.

If you want to keep employees productive, you need to ensure they’re happy, open to collaboration, and able to express their creativity. Creating a strong company culture is one of the most important things you can do for the well being of your employees and your company. Because when you have a dedicated team that is happy and productive, then there is no limit to what they can accomplish

Sep 14

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How to create a Team Structure that works for your Startup

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How to create a Team Structure that works for your Startup

You probably started your business to solve a problem. When you first began there were likely a lot of sleepless nights as you managed every role you needed for your business. But now, you’re ready to change that. You’re hiring—congratulations! As you consider hiring your first employees, or even if you’ve hired a few folks onto your team already, the structure of your team will impact your ability to grow and function with agility.

There are two basic organizational structures generally thought to be ideal in the business world. They are vastly different and seem to be in stark contrast with each other, though both agree that when your team is functioning at its best they are organized around job functions. Meaning the structure you choose to use should group your team together with the duties they perform or their areas of expertise.

Here’s what each of those elements means to an organization:

Chain of Command

Your chain of command is how tasks are delegated and work is approved. The team structure allows you to define how many “rungs of the ladder” a particular department or business line should have. In other words, who tells whom to do what? And how are issues, requests, and proposals communicated up and down that ladder?

Span of Control

Your span of control can represent two things: who falls under a manager’s, well, management … and which tasks fall under a department’s responsibility.

Centralization

Centralization describes where decisions are ultimately made. Once you’ve established your chain of command, you’ll need to consider which people and departments have a say in each decision. A business can lean toward centralized, where final decisions are made by just one or two entities; or decentralized, where final decisions are made within the team or department in charge of carrying out that decision.

You might not need the team structure right away, but the more products you develop and people you hire, the harder it’ll be to lead your company without this crucial diagram.

Mechanistic Versus Flat

Mechanistic or vertical teams are grouped with clear hierarchy and chain of command. Each team member knows where they stand, who their direct manager is, and who their manager’s manager is. They can follow the structure all the way to the top with the CEO. It’s clear to any person entering this workforce exactly who they report to and who will give them the information they need to complete their job every day.

Flat or horizontal teams are not quite as clear cut. You’ll need to define who manages each area of the business to approve things like raises and paid time off requests, but generally, anyone can give input and an intern’s ideas are not considered any less than those coming from your Director of Finance. The chain of command, or how work is assigned, isn’t as strict and leaves room for a lot of flexibility.

How Your Team Communicates and Works

When choosing between a mechanistic or flat organizational structure the most telling piece of information you’ll need to gather is how your team communicates now and if you’d like that to be how they continue to communicate moving forward. Thankfully, their natural patterns of communication and collaboration will tell you everything you need to know.

If your team looks to certain people for communication, it may make sense for you to adopt a mechanistic structure where they can clearly go to certain folks for updates regarding the business. In this structure, your leadership team will divide and assign work to the folks below them. Businesses with stable environments who perform routine tasks or those who are under strict government regulation will thrive in this structure where one person must be responsible for completing a task.

If your business suggests teammates check their metaphorical business card at the door upon arrival every morning, you’re likely to fare better with a flat structure. Ideas and communication can come from anywhere in this model, where there may be dotted lines between team members whose roles may not fit in one particular department. Departments will be tasked with initiatives and can split the load however they see fit amongst themselves. As companies grow, you’ll see natural leaders emerging from this flow and you can continue to have a flat structure while you promote various people to lead the teams collaborating to solve complex problems.

Real-Life Application: The Matrix Approach

While there are plenty of examples of rigid mechanistic structures, like the military, the flat organization’s inspiration is a little harder to find. Most companies tend to work in a hybrid of these two structures, referred to as the matrix structure. The most prominent large scale example of a combination organization is the sportswear brand, Nike.

In this style of organization, decision making and authority flow both vertically and horizontally. The teams are grouped by geographical division who can each act semi-autonomously. Because of this, there are no “standard products” that come out of Nike. Each group in their organization is given the authority to create and own products for their region. This keeps them agile and able to develop their products with relative ease as every decision isn’t bubbled upward.

Use your people skills to build your team

For your team to thrive you must be approachable, friendly, authoritative and responsible. In other words, a good manager and leader.

You may need training to help you become a better manager and there’s no shame in that. Running a business is a learning process – and just like your employees, you can learn and improve.

After all, the better you are at managing people, the better your team will perform and the faster your business will grow.

Sep 07

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The Leadership Skills You’ll Need for Entrepreneurial Success

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The Leadership Skills You’ll Need for Entrepreneurial Success

When we set goals, some of us aim high. Some of us wake up every morning, ready to take on the world at 100 miles an hour. The folks in this category want everything, every opportunity and every chance to succeed. That outlook coupled with a thirst for knowledge is an essential part of an entrepreneur’s DNA.

One of the most important things to understand as an entrepreneur is that success requires them to be leaders. It’s not about being a natural-born genius whose idea can change the world as soon as it’s launched. Steve Jobs, Mark Zuckerberg, and Bill Gates—all of these maverick entrepreneurs who changed the world knew they couldn’t make big things happen alone.

But, while they created things that altered our lives, they kept their feet on the ground. They led enormous team to see their visions, harnessing every resource available to them along the way. They weren’t afraid to try something bold. There may be no magic formula for success, but entrepreneurs like this have taught us how to lead—how to take an idea from just that to something much bigger. These are just a few of the traits that successful leaders share.

Inspiration from Thriving Entrepreneurs and Leaders

Good Leaders study the best. They read biographies of innovators, watch documentaries, read articles in magazines. They soak up every snippet of information about the folks they look up to, finding inspiration from motivational figures, spiritual leaders, and, yes, business success stories.

But they don’t stop there. Strong leaders form lasting relationships with mentors and friends that push them. They believe that the people we spend our time with have an impact on our behavior and, ultimately, our success. So they surround themselves with people that they can continue to learn from and lean on.

Unrelenting Passion

How far are you willing to go to see a dream realized? Do you have the passion to go above and beyond the competition? What is it you really want to achieve? Being honest with yourself about goals is a critical first step in the battle for reaching success, but that also means you can’t let others dictate your vision.

As an entrepreneur, there are many ways to define success. One person might be looking for a high-dollar buyout in five years. Another may be looking to build a business that will last them to retirement. Maybe you want to help as many people as you can. Maybe you want to change the world.

Whatever your ultimate goal, the first step to achieving it is to not be scared by it. The entrepreneurs we look up to dreamed big, probably to the dismay of people around them. But they knew what they were after and were able to put plans in place to get there. They set lofty goals year over year until eventually that dream didn’t seem quite so big anymore.

Ability to Make Sacrifice

More often than not, leaders are the first to the office in the morning and the last out at night. They make personal sacrifices in order to give their company its best chance at success.

More than that, they’re always on the lookout for opportunities to boost the company. Leaders get on every podcast, take every media request, and take every chance to promote their product. Every opportunity to get their product in front of people matters. They have to share their vision—to connect with as many like minds as possible.

They live and breathe their companies because they don’t want to look back and wonder if they could have done more.

Sponges for Knowledge

Curiosity is an essential trait of an entrepreneur, not just because businesses that fail to evolve with the times won’t succeed for very long. But also because building a company requires understanding (at least on a basic level) all of its moving parts. To be a successful leader, you need to have a firm grasp on everything that your teams are working on. If you’re developing an app, you don’t need to learn how to code per se. But you should know enough about the development process that you can ask intelligent questions, track progress, and offer guidance when they need it.

To successful entrepreneurs, having the opportunity—and expectation—to continue learning and amassing knowledge is one of the best parts of the job. Ask an entrepreneur you admire for a book recommendation, and you can bet they’ll have one up their sleeve.

Perseverance and Positivity

Most success stories don’t happen overnight. As you launch your business, you’ll likely have many pitfalls before you reach your goal. The important thing is to keep going. Learn from your mistakes and never give up. Failure in business is temporary, but quitting is something that lasts forever. The best leaders realize that the journey is the destination.

Pessimism will get you nowhere. With every mistake you make, think of it as a chance to try a new strategy. If a customer, employee, or anyone for that matter brings you down, overcome the negative feedback and just be excited to switch things up to get a better outcome next time.

“We need to accept that we don’t always make the right decisions, that we’ll screw up royally sometimes – understanding that failure is not the opposite of success, it’s part of success.” -Arianna Huffington, Co-founder/Editor, Huffington Post

Aug 31

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Managing Cash Flow during COVID pandemic for Startups

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Managing Cash Flow during COVID pandemic for Startups

The worldwide COVID-19 outbreak is a quickly changing, uncertain situation. You may be seeing hourly updates about travel bans, upticks in cases, and restrictions on day-to-day life – all of which are affecting your business. As a business owner, you may be balancing keeping your staff and customers safe with keeping revenue flowing in. Below are the ways to keep your startup cash flow as strong as possible during the COVID pandemic and resulting economic slowdown.

1. Provide business services virtually

Many parts of the India are now under lockdown restrictions and social distancing guidelines, which prevent people from gathering in public. Additionally, in many places “nonessential” businesses have been closed.

While these restrictions are crucial for public health, they are having an outsized impact on startup businesses that are dependent upon foot traffic and in-person sales. The lockdowns to control the virus spread can have a devastating effect on your startup business cash flow. However, there are some technology solutions available that can help you still serve your customers, even while your physical business location is closed.

For example, if you own a gym or fitness studio, you can offer personal training sessions via video chat. Or, you can use services like Zoom or Jiomeet to live-stream your fitness classes to loyal customers. Most of your customers are likely looking for a way to get in workouts while stuck at home.

If your business provides veterinary services, non-emergency medical care, or dental services, you’ve likely closed your office to all but emergency appointments. However, there are many telehealth services available now that you can leverage to continue to provide some care to your patients in the short term.

Or, if you run a professional services firm (i.e., consulting, accounting or law firm), you can leverage email, phone and video conferencing to continue to provide services to your clients. In light of the quickly changing situation, your clients may need your support now more than ever.

2. Offer curbside pickup and delivery services

Retailers and restaurants have also been hard-hit by the lockdown restrictions and social distancing requirements. Depending upon the restrictions in your region, you may still be able to offer curbside pickup and delivery services to your customers.

If you have a corresponding e-commerce site or online delivery platform, making the transition to offering pickup and delivery only shouldn’t be too difficult. If you don’t have these services in place, you can promote that you offer these services at your business now by emailing your customer list and promoting on your social media channels, take orders by email or phone.

To transition to these types of services, you will need to retrain your current employees who are store clerks or waiters to provide delivery services or take orders via phone or email instead. You will also want to review the government portal for guidance on how to offer these services and still keep both your employees and customers safe.

3. Stay in touch with your customers via email and social media

If you have collected customer email addresses in the past, now is the time to use them. If you have figured out a way to offer your services virtually or via pickup/delivery, email your customers and contacts to promote your new offerings.

If you have had to temporarily shut down, consider emailing your list promoting gift cards to your business with no expiration date. This can help to solve your immediate cash flow needs, and customers can then use the gift cards when social distancing guidelines are lifted and your business is open again. Many businesses are looking for ways to support their favourite startup businesses during the outbreak and buying gift cards has become a popular way to do so.

Additionally, if you have company social media channels, promote your new service offerings or gift cards to your followers. You should also continue posting regularly during this time, even if you’re closed, to stay top of mind with your customers. This can help you keep your customers engaged with your brand even though they can’t visit your physical business location.

4. Work with your landlord, vendors, and suppliers

You should also look at your liabilities, such as your accounts payable, to see where you can possibly create a deal to manage your cash flow shortage. For example, many businesses likely work with a few suppliers and vendors where they regularly purchase their inventory and other supplies. Reach out to your vendors and see if you can extend your usual payment terms, or if your vendor can offer a temporary payment grace period. If you lease your business location, you may also want to reach out to your landlord to see if they are able to offer some sort of payment grace period or discount on rent.

5. Look into available financial assistance programs

Even if you are able to put some of the tips listed above into practice, you’ll likely still find it difficult to keep your startup business cash flow healthy during this time. Most businesses will still need extra financial help. Fortunately, there are a number of local, state, and central assistance programs launching to help businesses deal with the fallout from the COVID-19 outbreak.

Aug 24

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Financial Management Goals for Startups

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Financial Management Goals for Startups

In July of 1999, Marvel Entertainment was emerging from bankruptcy. Sales were stagnant, and they were burdened with $250 million in debt.

Their secret weapon to save the business? Smart and strategic financial management.

Peter Cuneo was brought on as Marvel’s new CEO that same year, and his first step was to review the company’s finances, cut back on working capital, and conserve cash. In doing so, he gave the company breathing room, and they used that time to brainstorm strategic decisions. The company managed to power up by merging with the American toy company Toy Biz and selling off the rights to popular characters like Spider-Man and the Fantastic Four.

Marvel’s comeback story is a big one, but all businesses—no matter their size—can learn from their strategic approach to financial management.

So Why Does Financial Management Matter for Startups?

Managing your finances is so much more than entering numbers into a spreadsheet. Effective financial management means strategically planning for the long-term success of your business, whether you’re salvaging a sinking ship or jumpstarting the growth of a burgeoning company.

That’s why, to make the most out of your resources, you need to be methodical about setting financial-management goals. By establishing clear goals, realistic budgets, and attainable benchmarks around things like budget maximization, cash flow, and risk management, you’re working towards establishing a sound financial footing.

Here are a few financial management goals you can start working on now to protect your business in the future.

1.Build Out Your Budget

Budgeting for your business requires a hard look at what happened last month, what happened three months ago, and what this month last year looked like—then using that information to make wise financial decisions for the months and years ahead.

For example, a sound budget will give you insight into the resources you can use on hiring, development, and any other needs. It should also layout your fixed and variable costs; the sales and revenue needed to support key initiatives; and an estimate of expected profits.

Here are a few budget-related goals to help you get started:

Examine Your Revenue

The first step in any budgeting exercise is to look at your past revenue sources. Add all those income sources together to discover what money comes into your business on a monthly basis.

Subtract Fixed Costs

The second step in creating a business budget is to add up all of your fixed costs. This includes things like rent, supplies, debt repayment, payroll, taxes, and insurance.

Determine Variable Expenses

Variable expenses are the things that change depending on how much you use the service. Many of these are necessary for your business to stay in operation, like utilities. This will likely include things like office supplies or marketing costs.

Build Your Profit & Loss Statement

Making a simple P&L statement is an exercise of addition and subtraction: Add up all of your income for the month and add up all of your expenses for the month. Then, subtract the expenses from the income, and hope you end up with a positive number. If you do, you’ve made a profit! If not, that’s a loss—and that’s okay, too. Startups aren’t profitable every month (or even every year). This is especially true when you’re just starting out.

Outline Your Forward-Facing Budget

This is what you’ve been working toward all along. Now that you’ve created your P&L, it’s time to create your budget. This is a future-focused document that’ll help you manage your money and stay on track. For this step, referencing your P&L will help you better understand the seasonal ups and downs of your business, which investments in your business are worth repeating, and what you should avoid in the future.

2.Manage Your Cash Flow

Whether your business is growing or struggling, managing your cash flow effectively could make or break your survival odds.

If you’ve used a lot of your working capital, for example, you may come up against a cash crunch that prevents you from paying suppliers or even paying salaries. That’s why it’s critical to maintain a level of working capital that allows you to continue to operate the business, even when things get a little rough.

Here are a few methods to help your business do just that:

Analyze Margins

Financial management, at its core, is about boosting efficiency. By analyzing your margins, you can find inefficiencies in your business and strategically prune them. If you are burning cash on unnecessary expenses (think software subscriptions that you don’t use, for example), adjustments are in order.

Manage Solvency and Liquidity

Analyze your ability to pay your long-term debts and short-term debts. You might find it necessary to increase sales or sell off some assets to stay solvent (meaning you have a positive net worth). If you are struggling to stay liquid (which means the ability to quickly turn assets into cash without loss), you can lease assets instead of buying them or analyze your accounts receivable to make sure you are getting paid fast enough.

3.Identify and Learn How to Manage the Risks

There’s no doubt that starting a new business has risks. So what can you do to improve your odds? More specifically, how can you reduce the financial risks that come with running a business?

Here are a few goals that’ll help you identify—and mitigate—common risks:

Keep Good Records

Establish a record-keeping system that works from day one. If you create a sound filing system and keep up with paperwork, it can save both time and money when it’s time to pay your bills or file your taxes.

Diversify Income

Whenever possible, have income from more than one source. If your business starts to struggle, having a backup plan to keep you out of bankruptcy might just save you.

Buy Insurance

Purchase insurance against death, disaster, and anything else that could potentially jeopardize your business. Although it will cost you some money to buy insurance, the peace of mind it brings is well worth the cost.

Save Money

Save as much money as you can so you can build up some cushion in case of an emergency. This means you may need to focus on investing in your own personal emergency fund.

Aug 18

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CFO’s Transformation to Digital World

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CFO’s Transformation to Digital World

CFO’s are always under the gunpoint. They need to manage the growing burden of regulatory controls while being proactive advisors to the business and ensuring a focus on the bottom line. Complicating matters: today’s rapidly changing, highly competitive business environment, which demands timely information and insight yet pressures companies to pare resources. Forced to do more with less, CFO’s must balance performance, efficiency, and risk—but that requires digital tools as well as the agility to manage volatility and drive enhanced decision making at reduced cost. Only few CFO’s have these capabilities.

In fact, many finance organizations lack such digital basics as automated processes, the ability to integrate and analyze data, and a workforce with digital capabilities. The finance function is often hobbled by slow, legacy systems that don’t talk to one another. Without integrated data and a full set of digital tools, CFO’s are unable to detect and quickly respond to real-time business changes. And they risk falling behind their more forward-looking peers, who are already transforming their business models and gaining a competitive advantage from their digital investments.

Digital technologies—and their ability to transform the finance function with improved planning and decision making, streamlined processes, and better cost management—are critical to meeting today’s business challenges. To achieve the most value, the finance function must develop a digital strategy that aligns with the company’s overarching digital framework. However, going digital requires that you first put a solid foundation in place.

A DIGITAL FOUNDATION

Digital transformation often starts with the ability to capture, integrate, easily access, and analyze high-quality data. Fortunately, the costs of data storage, cloud infrastructure, and processing power have dropped by as much as 100-fold over the past decade. That’s important because predictive analytics, artificial intelligence, and other digital tools are fueled by data. Lots of it.

Data capture and access can be enhanced with a data lake, an important piece of data and process architecture that supports the digital transformation. Unlike data warehouses that store and organize only highly structured data, a data lake can accommodate virtually any type of data in any type of format, from unstructured data and raw data streams to documents, emails, and audio-visual files. As a result, companies can migrate to a single enterprise-wide data repository, minimizing silos while increasing information sharing and access.

A data lake does more than store data: it transforms data on demand into a validated trove of information that can be easily accessed and mined. Software architecture makes this possible by processing incoming data, cleaning it up, and transforming it with high integrity—critical for regulatory reporting, more reliable modeling, and predictive analytics. Compare this with the expensive, IT-intensive approach of cataloging and cleaning up data in a warehouse operation before it can be used.

Another advantage of the data lake is its ability to capture and process real-time operating and market data instead of relying solely on historical data stored in ware-houses. Besides providing better support for time-sensitive financial transactions such as credit analysis and money transfers, it leads to far more informed analysis and planning.

Once the supporting architecture is in place, the foundation is set for key digital tools such as predictive analytics, robotic process automation (RPA), AI, and machine learning.

THE KEY BENEFITS OF GOING DIGITAL

Armed with a digital foundation, CFO’s can begin deploying a wide variety of digital tools that can dramatically improve the performance and efficiency of the finance organization and increase the value it delivers. Doing so will yield dramatic improvements in the performance and efficiency of the finance organization and in the value it delivers.

Benefits include the following.

Higher-Value Business Advice. Digital tools such as predictive analytics, digital dashboards, AI, and advanced algorithms can deliver powerful new insights into how the business can improve its financial performance. Because best-in-class CFO’s and their teams focus their time on being astute and proactive advisors to the business, this is arguably the area where digital investments will have the greatest impact. For instance, digital dashboards can work as strategic command centers, delivering real-time data to guide business operations. Dashboards can flag and evaluate the impact of unexpected events such as a new market entrant, geopolitical crisis, or supply chain disruption, providing timely analysis to decision makers across the company.

Better Planning and Forecasting. In today’s unpredictable, fast-moving business environment, plans and forecasts tend to have a short shelf life. Digital tools can provide the flexibility, agility, and responsiveness needed to manage this new reality. With automated on-demand budgeting, planning, and forecasting capabilities, finance staff can revise assumptions and inputs and get instantaneous feedback. For instance, changes in tax policy or foreign currency valuations can be quickly and easily modeled. And “budgeting season” can be whittled down to a week. Digital tools also improve the accuracy of plans and forecasts by eliminating human bias and analytical error. Using predictive analytics and algorithms, some analysts have boosted accuracy by more than 20% and cut forecast volatility by nearly 50%. The end result is a more robust planning process that generates better forecasts—in less time and with less effort.

Streamlined Accounting and Compliance. When preparing financial statements for regulatory submission, the accounting group must gather and validate the data in a carefully controlled environment to ensure that reporting is accurate and compliant and can be audited—a costly, time-consuming process. Digital tools minimize compliance errors and enhance transparency while saving time. Process automation can further enhance accounting control and efficiency, with benefits that extend across the accounting function to areas such as taxes, accounts payable, and accounts receivable. A fully digital control system can even use algorithms to ensure data traceability and integrity and improve the overall control environment.

Enhanced Decision Making. With access to better, more timely data, finance teams can analyze patterns and trends, gain new insights, and respond more quickly to changes in the marketplace. AI, predictive analytics, machine learning, and advanced algorithms can reveal unexpected drivers behind business performance. For instance, one firm used these tools to flag key patterns that indicated a likelihood of nonpayment or outright fraud—such as accounts opened on a weekend or a newly installed account—and was able to eliminate 60% of nonpayers. Before going digital, the finance team had to detect fraud using labor-intensive methods such as calling customers and manually looking up addresses.

Lower Costs and Fewer Errors. Digital tools are more efficient and less error-prone than humans—and they don’t need sleep. RPA can reduce the manual work associated with routine rules-based tasks and sharply reduce error rates and rework. As a result, staff reductions of 25% are not uncommon across all routine finance functions, from journal entries and reconciliations to payables, receivables, and beyond. Given that data and transactions are more easily audited, digital tools can reduce the need for external service providers.

Decreased Risk and Higher Returns. Many finance functions create economic value directly through treasury activities such as cash and investment management, capital market financing, and foreign exchange hedging. Machine learning and AI algorithms can deliver objective, predictive models to help CFO’s unlock and extract greater financial value from these activities. For example, a multinational firm developed a predictive hedging model to reduce exposure to currency and commodity volatility. Compared with traditional hedging, the new model reduced potential losses in more than 99.99% of the scenarios developed. (For additional comparisons of historic versus digital processes, see Exhibit 2)

GETTING STARTED

Clearly, digital technologies have the potential to dramatically improve the performance of the finance function. But most companies struggle to prioritize and focus their digital efforts. In fact, many simply aren’t prepared to go digital. Understand that digital investment per se does not guarantee digital success and positive ROI. Before they invest, companies, particularly those that are large and decentralized, should evaluate—and fix—organizational and process roadblocks that might limit the impact of digital transformation.

Once they’ve done that, they are ready to launch a real digitalization effort. Our experience in a variety of industries suggests the following guidelines for getting started.

Prioritize opportunities. Start by assessing the weaknesses, or pain points, in your organization—these offer the best opportunities for early digital success. Some areas may be saddled by high-cost, manual processes or data integrity issues. Others may be lacking in planning or analytical power and insight. So, it falls to the CFO to determine which specific opportunities will bring the most incremental value to the organization in the short term.

Benchmarking your peers will provide further insight. But because no organization has unlimited time and resources, prioritize the most pressing initiatives on the basis of cost, complexity, time to results, and projected benefits.

Think big and stay focused. Digitalization must be ambitious and far-reaching to drive real transformation, but don’t try to do everything at once. Start with test projects that focus on the highest-priority areas. Use these projects to lay the foundation, develop capabilities, and refine new ways of working. Then aggressively scale them across the function.

Know what drives value. Digital technologies provide massive analytical power, offering finance teams new clarity into value drivers—not just financial drivers such as revenue growth and expenses but drivers at the operational and business unit levels. One company analyzed its products, costs, and revenues across every business and geographic area. The key insight: product proliferation was creating a reporting nightmare, consuming vast resources without adding value, and hampering management’s ability to effectively run the business. The company cut more than 90% of its P&L preparation and reduced related head count by 25%.

Expand your digital toolkit. Look for ways to roll out additional tools—consistent with your digital strategy—for even bigger benefits. A global media company is deploying digital technologies to transform both its financial planning and analysis and its accounting and back-office functions. A new cloud-based financial-planning system helps identify key profitability drivers and enable dynamic forecasting. The system simplifies and links processes that previously involved discrete spreadsheets and multiple owners. Users can now easily test different business scenarios to understand risks and opportunities and make quicker, better-informed decisions, eliminating much of the guesswork, error, and manual iteration that were part of the legacy process. In parallel, the company is developing RPA capabilities to automate repetitive tasks and linkages between systems that couldn’t previously talk with one another. The company continues to expand its digital footprint.

Track your progress and stay involved. Measuring the results of your digital efforts is critical, especially because many of the initiatives will be evaluated and refined over time. Knowing what cost reductions, productivity improvements, and other benefits the new tools are delivering is important input, as is communicating these benefits to your organization. In many cases, digital initiatives are self-funding. Savings can be reinvested in additional capabilities with long-term strategic value.
Where possible, tie these metrics to the company’s overall digital objectives.

Realign your resources. As the finance organization goes digital, many staff members’ roles will evolve. To fully capitalize on the new tools and processes, finance staff will need closer links to IT and training in skills such as data analysis and forecasting. New hires may be needed in the near term.

Digital technologies may be the most effective way to manage the challenges of today’s fast-changing business environment. Drawing on digital tools and their many benefits, CFO’s can transform the finance function and add more value to the business, all while balancing performance, efficiency, and risk. The key is to develop a comprehensive strategy to ensure that digital tools deliver the most impact. Forward-looking CFO’s have already invested in a digital future and will continue to invest as the tools evolve. Simply put, it’s the price of gaining and sustaining a competitive advantage.