Small businesses have a lot to do, and not a lot of people to do it with. Which means efficiency and productivity are crucial touchstones.
The more you can free your teams from certain time-consuming tasks, the better their ability to add maximum value to the business.
With that in mind, let’s explore four finance goals or principles that can help small businesses turn tedious work into efficiency gains. By approaching traditional finance processes with a more modern approach, finance moves from the “bad cop” in the business to a real value creator.
Here’s how to make that happen.
1. Create clear and easy-to-follow processes
Not everyone understands why certain financial practices are important for the business. Which is fine – that’s not why you hired them. And it doesn’t mean they don’t care about the company or want it to succeed. They just don’t know how they can help.
Whether you have a dedicated finance team or not, you need your teams to follow some basic rules. And the best way to ensure this is good process design.
Many small businesses have no real finance processes at all. You probably have payroll under control – that’s essential to keeping employees around. But expenses, cash flow, budgeting, billing, and payment processing may all be a work in progress.
So it’s time to create simple, user-friendly processes and policies your teams can pick up and run with. Good internal processes are:
- Easy to understand. Even legal terms can and should be explained simply if you want your teams to follow them.
- Quick and concise. A 10-page, exhaustive company expense policy might seem like a good idea. But in reality, most employees simply won’t read it.
- Precise, but flexible. Ideally, you want to avoid leaving things open to interpretation. If you can list every important detail – without overdoing it – go right ahead. But equally, you can trust employees to make sensible choices. So focus on arming them to do this.
- Repeatable. The whole purpose is to have ongoing processes that work the same way every time. So focus on the ones that come up most often.
The ultimate goal is to help your teams act autonomously, without bothering management or finance. So put them in a position to succeed, and then trust that they’ll make the right decisions.
2. Digitize documents and move towards cloud tools
“Digital transformation” has become a bit of a cliché. But that doesn’t mean it’s not a valid goal. And the good news for small businesses is that you usually have fewer ingrained processes to upgrade. Spare a thought for the large legal and accounting firms, with all those filing cabinets.
And if you’re setting up new finance processes (see point 1, above), you can choose digital by default. No transformation required.
The other part of this equation is to choose cloud tools wherever possible. You want these digital documents to be available from anywhere – not just in the office or from the correct computer.
A few concrete steps:
- Digitize necessary finance documents. Invoices, payslips, and expense receipts can all be digital today. So there’s no need to fill them out by hand, nor to store them in giant filing cabinets.
- Make internal records digital. Purchase orders, expense reports, and team calendars, should be digital. Whiteboards and wall planners are nice, but they don’t leave a clear record, and definitely don’t work for remote teams.
- Use cloud tools. Software should be accessible from anywhere. Can everyone execute important financial processes from home? If they’re paper-based, the answer is no.
During the Covid pandemic, we heard from companies whose accountants still worked using physical files in the office. When the first lockdown happened, there was no way for them to access the company’s records. Which is a serious issue, and completely avoidable.
3. Automate low-value-adding tasks
Plenty of work requires real thought and experience to do well. That’s why you hire smart people who know what they’re doing.
But there’s a whole suite of common finance tasks that simply don’t. They waste your team’s time, and create problems down the line. So stop doing them this way.
Basic “no-code” tools like Zapier let you connect software that doesn’t natively integrate. You can send data from Google Docs to Excel sheets, for example, without any technical know-how.
And you should also look for solutions that do natively integrate with one another. Does your accounting system work with your expense tracker and your payroll software? Every time a team member has to copy data from one place to another, or manually check for information, automation may be the answer.
Automated processes come with a few advantages:
- They save time. This is the most obvious and usually biggest win: you don’t waste people hours on repetitive tasks.
- They lead to fewer errors. It can be counterintuitive, but the more you have actual humans working on things, the more often mistakes are made. Machines tend to do things exactly the same every time.
- They free you to do more important work. Automation works best for simple, repeated actions. Which are important, but frankly don’t add much value to the business.
- And this removes headaches. That includes for finance teams who don’t have to chase employees, and employees themselves who don’t have to manually fill out forms or check with five people how to do a simple task. Everyone is more focused, and less flustered.
All of this amounts to a more productive business. So if a robot could do it, let a robot do it!
4. Consolidate processes
This is more of a principle than a goal. But it’s obvious and logical that three clear processes are better than 15. If teams have to learn a whole new playbook every time they encounter a finance process, this grinds the company to a halt.
So instead, put in place systems that work the same for different outcomes.
Spending is a good example. You have a process for taking subscriptions (shared company cards), one for purchases in the field (expense claims), and then a third for submitting invoices from suppliers (email to the finance team). And these might be different again for your various offices or with remote teams.
Typically, everyone just ends up doing things the way that makes sense to them. Which is neither robust nor efficient overall.
Instead, you can consolidate all these processes in one spend management tool. Employees only need one process to pay with cards, make expense claims, or submit invoices. That means less onboarding to new systems, and fewer errors overall.
The added bonus is that this is also far more scalable. The system works the same whether you have five, 50, or 500 employees. Which simply isn’t the case for more traditional finance processes.
Start adding more value to the business
Finance processes are often thought of as the unpleasant essentials – the things you have to do, not want to do. This is largely an effect of slow, uncomfortable practices that simply don’t need to exist any longer.
Modern technology and smarter process design means finance admin can be done in minutes, not hours. It’s no longer a major chore, and teams can focus on more important things.
Which sounds like productivity in a nutshell.