According to the Bureau of Labor Statistics, approximately 45% of new businesses fail within the first five years, and only 25% make it to the fifteenth year. While there are many reasons why growth-focused organizations fail in the long run, poor financial management is a major factor. 

Many business owners lack the necessary skills and tools to ensure proper financial management of their companies. Deep financial management knowledge is vital in understanding profit margins, determining if there is sufficient cash flow to sustain operations, and making decisions on buying important assets. 

This article will dive into some of the best tips to improve financial management services in businesses ready for growth.

Financial Management Challenges for Growing Businesses

Some of the problems you may encounter when managing your company’s finances include: 

Controlling Debt

Regardless of how strong you may be financially, at some point, you’ll likely need to borrow money from banks to grow your business. However, taking on too much debt can hurt your business in the long term regarding higher interest; you can avoid getting into such a situation with proper financial management skills and tools. 

On-Time Bill Payments

Due to various challenges, business owners may struggle to pay their bills on time. If you have strong financial management skills, you’ll know how to acquire the necessary cash to meet your obligations on time. The best ERP system for growing businesses can help you solve this problem effectively by keeping financial information organized in one place. 

Creating a Budget 

Many growth-focused businesses end up in a tight place economically when they don’t efficiently create and monitor budgets. Budgets should prepare a business for unforeseen circumstances such as inflation and pandemics, and should guide business owners when making strategic decisions such as hiring new employees or working toward expansion.

How ERP Software Can Improve Financial Management Services 

An ERP system is a software that integrates all functional areas of an organization into a singular system. These functional areas include: finances, accounting, inventory management, customer relationship management, and human resources. A cloud ERP software solution will help your company achieve greater visibility into its finances–the result is a better decision-making process that drives overall business growth.

Additionally, ERP software can increase throughput of a business . Other benefits of ERP software in financial management services include: 

Better Workflow 

ERP systems automate tasks like asset tracking, making it easier to streamline your internal processes. Integrating accounting functions into new and existing systems makes your financial management processes more accurate and efficient. 

Increased Business Performance

ERP software boosts the productivity of businesses by automating redundant tasks like lead management. By doing so, your employees will get enough time to focus on more important aspects of the business, such as customer service. 

Accurate Financial Forecasts

Financial management involves tracking and reporting all transactions and other financial information, such as payroll. With an ERP system, you can transform complex data into accurate financial forecasts, including revenue and cash flow reports.

Choosing an ERP for Financial Management Services

Even though there are many ERPs out there, it may be difficult to determine the best ERP software for a growth-focused business if you’re new to the field. It’s important to make the right choice that is flexible enough to fit your unique needs. Navigator Business Solutions has everything necessary to help you avoid problems with open-source software and easily implement the best ERP system possible for your business.

Learn more about ERP solutions for financial management by contacting one of our experienced ERP consultants at (801) 642-0123 or by writing us at info@nbs-us.com .