7 Signs that your company needs to improve its financial management

The financial health of a company is of vital importance for it to be able to seek growth and make more assertive decisions, regardless of its size. It is very important to maintain effective financial management for the company to be competitive and profitable.

When it comes to effectively managing a business's finances, many aspects need to be taken into consideration, from controlling expenses to properly organizing operations, for example.

However, some entrepreneurs and managers end up, due to lack of knowledge or time, only carrying out basic financial control, hindering the company's progress.

With this in mind, we have put together 7 signs that your company needs to improve its financial management and tips on how to resolve this situation. Keep reading!

1 - Difficulty in accessing the business's financial data

Imagine how difficult it is to manage a business when financial data is obscure and complicated, and difficult to access. This is the first sign that your financial management needs more attention.

In this sense, always being aware of the business's financial figures is very important for more efficient and planned decision-making. For example, it is essential for the manager to know how much resources are available for an investment or for an unexpected cost.

2 - Your business has difficulty complying with accounting requirements

Each tax regime has its own particularities and aspects that need to be respected and complied with by the business.

Therefore, a company that finds it difficult to comply with the requirements of the tax regime in which it operates will need to improve its financial management to identify possible points of attention.

3 - Time-consuming processes

The financial sector of a company, like any other, has a lot to gain when processes and procedures are automated, reducing the need for human resources to perform certain tasks.

One sign that your financial management is not going so well is when employees spend too much time performing financial tasks that could be automated. Old and time-consuming processes are a major cause of low productivity and delays in a business.

4 - Accounts closing in the red

Having a company in the red is the clearest sign of low efficiency in your company's financial management.

When operating expenses exceed the profits generated by the business, it is necessary to analyze all sectors in search of reducing these expenses.

As a solution, it is necessary to analyze all of the company's expenses and revenues. This will help you understand which expenses can be cut, how to generate more revenue and increase profits.

5 - Difficulty in managing accounts payable and receivable

Keeping track of which bills need to be paid and who owes money to the company is essential for good organization and efficient financial management.

It is important to be aware of defaulting customers and to pay attention to payment dates. After all, not receiving expected amounts or paying interest to third parties due to non-payment can have a significant impact on the profit and financial health of a business.

Reminders on your cell phone or calendar can help solve this problem. Now, with an intelligent financial management system.

6 - Investors and shareholders are not very confident about the business

A good indicator of a company's financial health is the mood of its shareholders and investors, since the business's performance has a very direct impact on them. Therefore, noticing their distrust is a sign that financial management needs to be improved.

To gain this trust, it is important to present the business's management reports , with results and projections for new projects. This way, your business can project a good image and attract more investors .

However, it is necessary to keep control of finances up to date in order to deliver satisfactory reports, plan and execute advances in the company.

7 - Low profitability

Even without losses, maintaining very low profitability does not allow the company to invest in growth and expansion. This can be a problem caused by inefficient financial management.

There are many factors that can prevent profit from increasing, and it is not always an easy task to find out what they are.

The role of financial management is to keep all operations under control and, therefore, facilitate the understanding of where the business needs to improve in order to increase profitability.

Knowing your own business in depth is essential to knowing how to make the right decisions for its growth.