As remote working becomes more popular, team finances become more complicated. If your team isn’t organized, it can lead to problems down the road. Just a simple misunderstanding between team members can snowball into a full-blown financial crisis if caught too late.
Business cash flow is the lifeblood of any organization. As team leaders, taking charge of your team’s finances is one of the most important things you can do to ensure long-term success. Ensuring that your team is organized and on the same page when it comes to finances will save you time, money, and headaches down the road.
Whether your team is just getting started or has been working together for years, here are our four best tips to help you get your team’s finances in order:
1. Establish Clear Financial Goals
Clearly defined financial goals are important for any organization because they provide a roadmap for decision-making and help to ensure that resources are best used to achieve the organization’s objectives.
For example, if one of the goals is to increase profitability, then investment decisions will be focused on initiatives that are likely to generate higher returns. Alternatively, if the goal is to reduce expenses, then there will be a greater focus on cost-cutting measures.
Having well-defined financial goals also allows an organization to measure its progress over time and identify areas where performance is falling short. By having everyone on the same page in terms of what the organization is trying to achieve, it becomes easier to make adjustments and take corrective action when necessary.
2. Automate Financial Processes
Some businesses—particularly smaller ones—hesitate when it comes to automation. Owners might feel that they need to maintain control over financial processes or that automation is too expensive.
There will be a bit of an upfront investment to automate your finances, in terms of both time and money. But handing off repetitive, time-consuming tasks to software—such as invoicing and bookkeeping—will free up your energy and attention for pursuits that can actually grow your business.
Here are just a few examples of how automating financial processes can make a big difference:
- Ensures that invoices are paid on time and that late payments are avoided.
- Eliminates the need for paper records, which can get lost or damaged.
- Enables you to track spending and budget more effectively.
- Allows you to generate reports with ease, so that you can make informed decisions about your business.
Adjusting to automation takes time, and it might sting a bit for team members who take pride in doing things a certain way. But the benefits of automation are impossible to ignore at this point. Don’t get left behind. Over time, your team members will adjust and come to see automation as their savior from all the tediousness of financial management.
3. Have Regular Financial Check-Ins
Check-ins give you a chance to review your team’s financial situation and make sure everything is on track. They also allow you to identify any areas where there may be room for improvement. For example, if you notice that your team is spending a lot of money on travel expenses, you may want to consider ways to reduce those costs.
Regular financial check-ins can also help you catch errors or discrepancies before they become a problem. Catching issues before they spiral out of control is key to maintaining a healthy financial situation for your team.
They also help foster a sense of transparency and accountability within your team. When everyone knows that their finances will be reviewed regularly, they’re more likely to be mindful of their spending.
Lastly, they also help protect your business against fraud and embezzlement. We all know how quick it is to rack up expenses on a business credit card. Having a regular check-in system helps minimize the chances of abuse, as well as the impact of any fraudulent activity if it does occur.
4. Empower Your Team to Make Financial Decisions
As a team leader, knowing that every single financial decision can have a ripple effect on your company’s bottom line can be stressful. You may feel like you need to stay on top of everything that might affect your company’s finances, from deciding on the right business card for your team to monitoring your office’s electricity usage.
While hands-on management will always have a place in the business world, at some point you need to empower your team to make their own financial decisions. Doing so will not only help to ease your stress levels, but it will also give them a greater sense of ownership and responsibility for the company’s finances—two things that are essential for any team to function effectively.
This, of course, doesn’t mean giving them free rein to make whatever financial decisions they want. Instead, it involves creating clear guidelines and expectations for what they can and cannot do. For example, you might give them a monthly budget to work with or set spending limits for certain items.
That leeway will give them the freedom to make decisions on their own, while still ensuring that they’re acting in the best interests of the company. You can then focus on the big-picture items and leave the day-to-day budgeting to those who are closest to the action.
You may feel like you’re in over your head when it comes to managing your team’s finances, but don’t despair. With a little bit of planning and some helpful tips, you can quickly get a handle on things. Getting everyone on board with your company’s short-and long-term goals, automating wherever possible, having regular financial check-ins, and empowering your team to make their own decisions are all great ways to stay on top of things. So take a deep breath, roll up your sleeves, and get started!