4 ways to simplify your financial management

Qonto’s SME barometer found that 59% of SME managers in our four markets spend most of their energy on administrative tasks and financial management.* TPEs (a French term meaning 'Very Small Businesses' of fewer than 10 employees) and the self-employed aren’t spared from this either.

Do you think of financial management as paperwork and frustration, often wasting your valuable time?

Do you sometimes feel like you don't have control over your expenses?

If this rings a bell, there’s a strong chance your organization's financial toolkit could be improved.

What if you started fresh? Let's take an in-depth look at four best practices, simple but fundamental steps, to stay on top of your finances and encourage growth.

*Qonto Data Report, conducted in collaboration with the Appinio Institute, 2023

When looking at a new year, we encourage a simple reflex: always take a moment to analyze the data and results of the year before. You can do this whenever, simply reread a previous forecast and compare it with end results.

This helps you identify:

• what worked well: projects that generated profit, etc.;
• what worked less well: projects that cost you a lot of resources and which were less profitable than expected, periods of reduced activity, unexpected expenses, etc.

This retrospective exercise is crucial. It allows you to identify and analyze the root causes behind some of your financial problems, and then develop appropriate solutions.

In practice, it's about asking yourself:

• Why did this happen?
• What could I put in place, concretely, to prevent it from happening again?

Let's take a look at some common situations that many companies face.

This may reveal a lack of clarity in your spending policy, or the use of unsuitable payment methods (e.g. a company card circulating freely amongst teams). Here’s how to prevent these situations from becoming recurrent:

• Establish a clear, unambiguous spending policy and (most importantly) communicate it universally.
• Use appropriate payment methods, such as configurable payment cards that cap expenses to avoid going over budget.

This might just mean that your budget at the beginning of the year was unrealistic, inconsistent with your objectives and/or costs were poorly anticipated.

Some solutions to explore:

• Spend extra time refining your forecasts, and possibly hire a professional like a financial controller.
• Plan a safety cushion in your budget in case of unforeseen events.
• Automate real-time monitoring of your budget.

Maybe you had difficulties allocating finances or human resources in your company. Perhaps you didn't prioritize projects that accelerate growth. This could come from a lack of clarity from financial data. To address this, try relying on decision support tools such as dashboards. Dashboards bring together reliable, accurate data, helping you make more informed decisions.

This retrospective work is valuable because it allows you to identify repetitive patterns, and to put in place — once and for all — effective, adapted solutions to stop them.

Whether you’re self-employed or managing a TPE/SME, admin is unavoidable. But you should know that you can automate and delegate certain time-consuming, repetitive tasks. This will help you to free up time to focus on more strategic missions for your company, but also to prevent potential errors.

Repetitive tasks that could be automated include:

• accounting tasks: logging accounting entries, synchronizing transactions, categorizing expenses, exchanging supporting documents with your accountant, etc.
• invoicing tasks: issuing invoices, quotes, but also customer reminders in case of late payments.
• expense report management tasks: collecting supporting documents, reminding late-filing employees, etc.

There are many suitable tools that will help you automate these tasks (we’ll address these in detail in the next section).

You can also delegate certain missions to a designated accountant, such as:

• tracking your expenditures and preparing the annual accounts.
• preparing and filing your tax returns.
• payroll management: calculating social expenses, issuing/sending payslips.
• drafting various contracts: commercial contracts, employment contracts, etc.

Nowadays online tools to get organized, do business, and manage finances are unavoidable. But you still need to know which ones to choose.

Before subscribing to new software, it’s important to first make a list of everything you already use in your company.

Then ask yourself a few simple questions:

• Do you (really) use all the tools you subscribed to? Do you need them regularly?
• Do they help you improve performance/productivity?
• Do they help you save time?
• Do you find them intuitive? Easy to use? Adapted to your needs?
• And bonus question (to rationalize expenses): how many people use the tool? Is it consistent with the subscription you’re paying for? (For example, if you subscribed to a license for 10 employees, but in fact only 2 people use it, it could be time to renegotiate).

If you answered "no" to any of these questions, then maybe it's time to question their usefulness. Ask yourself, are some tools redundant? Do you have several tools with similar features?

When it comes to financial management in particular, the vast array of tools is often counterproductive… it wastes time, complicates your work, and adds additional costs.

It’s better to favor so-called “all-in-one” tools that help you to gain efficiency and streamline your processes.

Here’s our selection of solutions designed to simplify your financial management and automate repetitive tasks:

• Qonto, the account that means business. Qonto is above all a business account with everything you need to manage everyday finances: Mastercard cards and instant transfers are included in your subscription. Plus, tons of features designed to simplify your accounting preparations, automate invoicing, and streamline expense management.
  
  

• Dougs is an online accounting firm with a mission to make life easier for entrepreneurs so they can focus on growing their businesses. Dougs guides entrepreneurs through all aspects of creating and managing their companies (choice of legal form, optimizing pay, minimizing taxation…) and helps them to build their wealth.

As an entrepreneur, maintaining cash flow is a constant challenge. Don’t see it as a negative; it’s the reality of doing business. It’s directly linked to your sustainability and growth.

To avoid cash flow discrepancies, focus on two key areas:

• negotiating payment terms with your suppliers.
• limiting payment deadlines with your customers.
  
  

Payment terms with suppliers

Do you regularly work with the same suppliers? In this case, you can try to negotiate payment terms with them. If you are an important customer and have good business relationships, they may be willing to grant you more flexible deadlines.

In Europe, remember that payment terms can’t exceed a maximum of 60 days from the day the invoice was issued. This must be specified on all commercial and accounting documents (contracts, quotes, invoices).

Payment terms with customers

On the other side, the objective here must be to do everything possible to limiting customer payment deadlines and avoid unpaid invoices. A few very simple good practices are enough to limit delays and encourage prompt payments, such as:

• Sending the invoice as soon as the service is completed / the product’s been delivered;
• offering a discount on the invoice amount in case of early payment;
• reminding customers from the first day of late payment.
  
  

All of this means staying organized and managing your invoicing on an ongoing basis.

To help you, Qonto offers an invoice management solution which allows you to:

• generate and send electronic invoices in less than a minute, then easily remind your customers.
• gain visibility on your supplier invoices.