Running a business is a balancing act, and sometimes, financial literacy isn’t one of the top priorities. To run a successful business, small business owners need to learn to understand financial statements and how to run their business most cost effectively. Luckily, they don’t need to be an expert, but they do need to master some financial skills.
There are a few ways to increase financial literacy for small business owners. They can pick up a book or take an online course and begin to teach themselves how to maneuver their business finances. They can hire someone to do it for them, or they can implement certain tools that aid them in becoming more financially literate.
vcita is one of those tools.
Why is financial literacy so important for small businesses?
Financial literacy needs to be important to small business owners for many reasons. Not only will financial literacy help small business owners talk the talk, but it will also help them make crucial business decisions like understanding when it’s time to expand their business and when to cut back.
Gives business owners more control
By enhancing their financial literacy, SMBs can gain more control over their finances and learn to manage on their own. This reduces the need to hire someone to handle it for them and also increases their awareness of issues in their cash flow. To gain a better grasp of their business’ financial health, learning to read and update balance sheets and P&L statements goes a long way.
Allows small businesses to scale up
When we say financial literacy helps SMB owners to talk the talk, we mean when speaking with investors, loan companies, banks, etc. By becoming more financially literate, small business owners can maneuver correctly and minimize the risk their business poses to potential financing opportunities. Gaining access to these funds will surely help the small business to scale up its operations and grow significantly.
Helps with keeping records
Being financially literate also means knowing how to create and maintain certain financial statements as well as keeping track of each and every transaction. This becomes a lucrative skill come tax time and for accounting purposes. In addition, it assists in making smarter decisions about managing expenses of the business. It’s a win-win: being financially literate means SMB owners are keeping organized records of their transactions and cash flow, and keeping organized records means SMB owners can handle the financial responsibilities of their business.
How vcita helps SMB owners with financial literacy
vcita’s all-in-one business management platform for small businesses has a comprehensive suite of tools that allow SMB owners to manage their time, money, clients and marketing all from one location. It’s the money management part that we’re going to focus on as it helps small business owners to increase their levels of financial literacy and better manage their business’ finances overall.
Makes it easy to view payment history
Right at first glance of their dashboard, vcita users are presented with highlights of their transactions including how much they’ve made, how much they’re owed, and any future payments coming in. This helps with forecasting and allocating funds and expenses for the business. However, a deeper dive is available when clicking on the “payments” option on the dashboard’s menu. Payments can be viewed and filtered by a time period or a specific client, allowing the business owner to create an accurate projection, helping them better manage their cash flow.
Offers detailed data about the business’ financial health
In order to make the best decisions for their business, there are a number of things business owners need to know. The reports feature on the vcita platform offers users a birds eye view of their business so that they can make educated business decisions based on data. Users can view their income by client, compare trends in revenue over different time periods, see which payment method is most popular and track income over time from each client. These reports assist small businesses with their strategies for growth and their small business budgeting, among improving their knowledge of their business’ financial health.
Gives access to important financial reports
With vcita’s third party integration with Quickbooks for example, small business owners can easily keep track of their payments and invoices through one centralized hub. Once vcita & Quickbooks are in sync, users can confidently manage their finances and avoid any gaps or discrepancies. Understanding and filing small business taxes is a huge part of financial literacy and a recent vcita survey shows that most small business owners only somewhat understand their small business taxes. So gaining access to these documents is a great help in improving their financial literacy in the tax and accounting spheres.
Financial literacy is easier to attain with vcita
Financial literacy has a direct impact on many aspects of running a small business. From enabling growth, to being better prepared for tax season, and everything in between, financial literacy gives small business owners more control over their business’ financial health. By using a tool like vcita, small business owners can minimize the learning curve and begin to excel at their business finances with as little friction as possible. This will make a huge difference when it comes to forecasting, budgeting and making smarter business decisions.