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4 Signs You Need Help With FP&A for your Small Business

Maddi Prince
June 4, 2022

4 Signs You Need Help With FP&A for your Small Business

It’s almost too much for someone who is also trying to run and build a business to manage alone. But professional financial help is often out of reach because of prohibitive costs (imagine that). These complexities are a burden for business owners and are a deterrent for others who would consider starting a business but are intimidated by the complexity and dangers of managing business finances

Most small businesses are so caught up in the day-to-day that they don’t have time to look up and see what the future holds. Unfortunately, most businesses aren’t achieving the full potential of their FP&A activity. We’ve come up with the top 4 red flags we’ve seen with FP&A practices, and how you can upgrade your business.

🚩 You haven’t started your financial plan:

We’re not gonna judge. In many respects, the FP&A process is only as good as the people managing it. Executing the plan requires that people know what the plan is and their role in executing it. 82% of businesses that fail, fail due to cash flow problems.

Starting this journey can be intimidating, perhaps you don’t have enough capital to hire a outsourced CFO just yet. First of all, your business need to incorporate a FP&A process that allow for flexibility. If you use software like Quickbooks Online or Xero for accounting, you’re off to a great start. The key is that you need a platform that allows you to quickly react to change. 

🚩 The data is outdated or incomplete:

If you’ve ever had the experience of nearly throwing away a seemingly useless item but being thankful years later that you held on to it, you know that experience can reinforce the decision to keep things. If you treat your financial data like an old thing in your garage and don’t keep it at top of mind, it will over time start to overwhelm you and decrease it’s value for your business. 

Keeping your data constantly flowing and up to date is incredibly important. The pace that businesses run today is so fast that staying on top of numbers should be at the forefront of your mind. If you are struggling to drive your forecast and budgeting process with Excel, it’s time to think about improving your process. 

 

🚩 You don’t have weekly cash flow 

Cash is king, and if you want to position your business for success, you need an accurate cash flow projection in your toolbox. That’s because knowing how to put together a reliable cash flow projection is like creating a financial roadmap for your business, combining insights from historical data, along with your own assumptions about the future, to show you exactly when cash is coming and going, as well as what your bank balance will be at different points in the future. 

Some cash flow projections look like a typical cash flow statement, and others are designed to illustrate cash movements in different ways, but they should all tell you the same basic information:

  • When cash will come into your business, and how much
  • When cash will exit your business, and how much
  • What your bank balance will be at different points in the future
  • What is driving those cash movements

Knowing how to properly create a projected cash flow statement can be incredibly powerful for your business. However, many businesses don’t build or maintain their cash flow projections, either because they don’t have the time, they don’t know how, or they don’t think they need one. That’s a problem.

🚩 You’re not using Clockwork

You don’t have to be a financial expert to understand Clockwork. Clockwork takes all of your business's financial inputs and makes sense of your data. Using artificial intelligence and your financial data to create actionable models that direct your financial decisions. We will help you understand your money and all of the factors that influence business finance. 

Clockwork is built and priced for small businesses - we won't add excessive financial burden to your business. Your money is important, limited, and should go to building your business. We want to make sure that any and every small business can use Clockwork - because we want businesses to succeed. 

If you’re interested in upgrading your businesses FP&A practices, book a demo with us! We’re here for you. 

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