Do you manage the financial data of your small business on your own? It can be a large burden to bear if you do, and it can cause additional stress in your life. For many business owners at the start of their journey, the small size of their team leads them to think they have no choice but to go solo in many areas. It doesn’t need to be this way. There are seven key ways a collaborative process makes lives easier for small business owners.
There are seven key ways a collaborative process makes lives easier for small business owners.
1) Two heads are better than one
When you collaborate on a forecast or budget, different people will see different things based on their interest and focus. A collaborative process results in a more robust and accurate set of numbers. This is especially true if you are working online using a single source of truth. Errors are easily located when a second set of eyes is reviewing.
2) You can find mistakes and test your assumptions
When working on your own forecast and budgets, you become blind to the numbers after awhile and you find it hard to see your own mistakes. Collaboration will help mitigate this problem, as more sets of eyes mean a greater attention to detail. Furthermore, when you collaborate on forecast and budgets with advisors outside your business, you benefit from trusted advisors questioning your assumptions. This will help find oversights in the data and help you identify possible mistakes or identify unseen opportunities.
3) You can negotiate better rates or higher funding with your bank
If you involve your financiers collaboratively in the forecasting and management of your cash flow, you present a lower risk to the bank. By demonstrating you are a low risk debtor, you have an increased ability to negotiate lower rates and margins. This could lead to you receiving a higher level of funding.
4) It will help you keep on track
Having one or many financial collaboration partners is like having an exercise partner. You will have a higher probability of reaching your financial goals because you have someone else to motivate you. In addition, knowing you need to meet with another person to collaborate on your finances means you are more likely to stick to a regular schedule. Ideally you should review and collaborate on your budget/forecast at least once a month.
5) You will discover hidden opportunities
Financial forecasts are just the numbers side of a business plan (which may exist either written down or in your head). When you collaborate on your forecasts, an interested third party could see opportunities in your numbers you may not see. In this way, collaborating on your financial data could mean the difference between an ordinary an extraordinary future for your business.
6) You can receive instant help
If you’re using an online system, when you call your accountant to ask a question about your business forecast or a change in your budget versus actuals, your accountant can simply log on to your account to view and discuss it in real time using the same source of truth. This opens the door for receiving instant help when you need it most.
7) You can engage in better decision-making
Most importantly, when you collaborate on your cash flow forecasts and budget to actual comparisons it is easier to make decisions as a collaborative team than on your own. Better still, when you’re using an online system you don’t need to be in the same room or the same country. With better decision-making, you’re bound to unlock new opportunities for your business.
Consider the use of cloud technology to share and collaborate on financial data. With access from anywhere at any time, owners, managers, bookkeepers, accountants and advisors can collaborate on one set of data. If you’re looking for a cloud-based accounting software that allows you to share financial data in real-time, take a look at Reep. Reep uses real, constantly updated data that you can easily share to anyone, anywhere, on any device.