(Hat tip to Paul Schadler for the photo)
Financial data doesn’t just give you a snapshot of the current state of your company. A budget backed by information from past spending and revenue can change the way you look at a slow economy, a slow season, growth and setbacks.
How do I get that information?
Many accountants and financial officers bow to the power of the almighty spreadsheet, but getting the data to the spreadsheet can be a time consuming task.
To have the information you need readily available, it’ll take a little teamwork and the cloud. With the right app or software, your sales team, staff and managers can input each expense and purchase as it happens, so the data gets delivered to you all in one place, and you don’t have to go hunting for it.
In the cloud, all spending comes past you as it happens so you can spot deviations from the budget you set. More importantly, each time you or a manager approves a purchase or expense, that information is compiled. No more searching through your email for that purchase order from three months ago.
How do I use the information for cutting budgets?
Any accounting cloud software you bring into your business should have an export feature to get your information into a comprehensive data sheet. This enables you to use the information you’ve compiled in the cloud to help in all areas of your financial operations:
Negotiate with suppliers
If you like the product from company A, you can export data on exactly how much you pay them in a year. You know exactly how much business you throw their way and can explain the impact that a few late shipments had on your business. This gives you leverage to talk discounts and better rates.
Find better suppliers
If another vendor comes along and offers the same product on better terms, you know for certain that you are getting a better deal.
Cut deals with vendors
Maybe your company has a lot of clients in one city. If you can tell the hotel manager that you have employees filling this many rooms so many nights of the year, you have established credibility to ask for a company rate.
Cut unnecessary saving and spending
With the financial data from previous years, you can predict how much funds to set aside for the unexpected and allot the right amount of funds to each department. This saves you from putting money in one department when it could be used elsewhere in the company.
Grow your business
You can probably think of dozens of other ways to use readily available financial information to support you in your role. Whether it’s cutting spending, negotiating supplier deals or saving money, having information is the key to cutting budgets and making your company stronger.
With the right information in hand, you can make calculated, confident budgeting choices to guide your business.