How Outdated Payment and Financial Processes Hurt Your Company
Outdated or obsolete technology makes your business inefficient. Just as many things in our lives need updating from time to time – from slow technology to the apps on our phones – you also need to look at how you can update your processes to improve your business.
Some companies may not update their processes because they think they can’t afford to buy some fancy new invoicing software or pay a bookkeeper to manage payroll. Others simply may not be aware that better options are available.
Systems are an important part of managing your business operations. Below we explore three examples of how outdated processes hurt your business, and how you can fix it.
Poor processes lead to poor insights
If your invoicing and payment processes aren’t up to snuff, you could be hurting cash flow by not receiving payments at the right time, or are overestimating how much you actually have on hand. If you’re managing a small business, can you afford to simply guess how much money you have at a given time? Poor processes prevent you from getting a complete picture of your business.
Solution: Invest in accounting software that helps you manage invoicing and generate reports about your cash flow and future projections. A financial advisor is also a great person to have on the team for generating these useful insights.
Legal risks of bad payroll
If your HR and payroll processes are outdated, it could mean you are paying staff the incorrect amount or paying late. Incorrectly paying employees is at best a pain to remedy and at worse a crime that carries with it costly penalties – not to mention causes you to lose respect from your employees.
Solution:Finding the right payroll software for your business will help you avoid costly mistakes. If you’re able to swing it, hiring a bookkeeper can also help, as this person’s sole responsibility is ensuring payroll is handled correctly.
Silos prevent efficient workflows
If your business has multiple departments, it’s easy to for departments to stay in their silos: finance handles finance, HR manages HR, etc. In reality, your departments are all interconnected; finance and HR must work together with management to determine payroll, hiring and more. Tasking each department with creating and maintaining their own processes without stepping back to see how well these systems work together will ultimately lead to greater inefficiency. There need to be effective ways for each department to communicate and learn from one another.
Streamline your processes into as few software solutions as possible. While we noted the right software was the solution to the issues above, we don’t recommend being bogged down by so many “solutions” that they’re no longer effective. Investigate which software offers as many of the solutions as you need for your business to grow.
If your payment and financial processes seem to be slowing down your business, our financial specialists are ready to help. Contact Patin and Associates today to get started.