3 ways to ensure a strong financial future at the firm
January 07, 2013
The new year is an opportunity for many construction firms to reevaluate processes and improve productivity throughout the entire business. Making these adjustments can give businesses the chance to better the financial future of the company. A recent article for Entrepreneur magazine outlined a few strategies management teams at construction firms can use when they are trying to create a better financial plan for the new year.
Gather the right data
Overhauling how the firm will manage its finances can be a long, arduous task, which is why the company should only focus on changing a few things each year. With a construction accounting system, the management team can create ways to quickly learn about the company's finances and what areas need improvement. Setting filters on data collection tools will help decision makers at the firm gather the data that they need to change how the business is handling certain processes. Learning how to determine the best data streams can greatly benefit the firm.
Cut out the bad spending
Many construction firms operate on a shoestring budget and anywhere they can reduce spending can help the companies' finances. The magazine said finding the best deals on insurance, office supplies, telecommunications and any other business expenses is an opportunity to save money that can allow the company to be more efficient with its capital. Trying to find discounts and buying in bulk could be a few ways to trim the fat off the budget that has been bringing the firm down.
Create a cash flow plan
Failing to have an idea in mind about how the firm will bring in and spend money could be a fatal error that can cost the business a great deal. According to blog post for The Wall Street Journal written by Tim Caban, president of advisory firm Copper Beech, cash flow plans not only allow the management team at the company to stay on track, but also can give clients the ability to feel more confident in the business. Caban suggests having multiple bank accounts where money can go from one account to the next to ensure the firm will have enough money for growth strategies, as well as paying the bills on time.