More insight into your business? Optimise financial management
February 2024 - Whatever business you are in, at the end of the financial year, only one thing counts: the amount below the line. The financial management of your business, therefore, deserves full attention. An ERP system brings insight into your data and figures.
The basis of sound financial management is up-to-date accounting. An ERP (or Enterprise Resource Planning) system contributes by immediately routing incoming and outgoing invoices to the correct general ledger. At least, if you choose an accounting package that can be linked to your ERP package. In that case, you do not need to perform any manual operations to obtain up-to-date accounting records. Credit notes and payments are also automatically included, thanks to the ERP link.
Understanding your business thanks to financial reports
With up-to-date accounting on hand, you have all the data you need to react quickly in case of potential financial difficulties. To make that data transparent, you can once again rely on your ERP system. The software is equipped with a tool that automatically compiles financial reports based on the raw data from your accounts.
So you know exactly where you stand, at any time of the year. Is this the right time for that important investment or is it better to wait a while? Insightful financial reports help you make an informed decision.
Financial metrics to keep an eye on
· Cash flow analysis in the short and long term
How does cash flow evolve from week to week, and month to month?
· Payment monitoring, including stock rotation
Which customers respect the agreed payment terms, which do not? With this information, you can work to determine your debtor management. What is the turnover rate of your stocks? This data will help you find the right balance in your inventory management.
· Solvency and working capital requirements
To what extent are you able to repay credits and loans? And how much capital does your company need to meet day-to-day financial obligations (pay suppliers, pay salaries, carry out maintenance, ?)?
· Analysis of gross margin or EBITDA level
How much turnover are you left with after deducting supplier costs (gross margin)? Or after deducting supplier costs, interest, taxes, depreciation and amortisation (EBITDA)? With this data, you can make an in-depth analysis of profitability per activity, project, product or site of your company.
· Forecasts and actual profit/loss
How much profit/loss have you recorded in the past few months? How much profit/loss will you book in the coming months taking into account various plausible scenarios?
· Tracking HR costs
How much are your personnel costs? How productive are your employees? What is the absenteeism rate?
· Sales monitoring: crm, pipeline and forecast
What sales are in the pipeline in the short and long term?
Simplify and optimise your tax obligations
VAT returns, corporation tax, annual accounts, ?: the tax obligations of a company cannot be underestimated. With the right software, you are always compliant.
· You easily prepare the VAT return in your accounting package at the end of each quarter.
· To calculate corporation tax and prepare and file the annual accounts, you also need tax solutions. Don't worry, these can also be easily linked to your accounting package. So there is no need to enter data twice here either.
· Do you work with an external accountant? He or she can access all relevant information on request. The system ensures that all documents are completed correctly and reach the tax authorities on time.
