SOPs and Finance
As we continue our series on systems and processes, this week it’s all about finance.
If you’ve followed me for any amount of time, you have probably heard me refer to Money Mondays and Financial Fridays. This is an example of a little personal process I have at Slater Success that really works for me.
Knowing your numbers is extremely important and I encourage my clients to build processes of their own to help them keep track and on top of the game.
Even if you are the CEO of your company, you need to know your numbers. You don’t have to have every line item in your head, but you should be able to quickly pull up stats about your revenue, cash flow and expenses. Having a great CFO is wonderful, it is NOT an excuse not to know the financials in your business.
Let’s start with invoicing.
What is your process? Are they sent the same day of the month? When are they due? Are you on top of your receivables and have a process in place for collections? Do your clients’ pay automatically with a bank transfer or do you receive checks? What software do you use?
Each piece of the invoicing process needs a documented system. You also need information for what happens when things don’t go to plan. For instance, a client wants to get out of a contract sooner, is having financial hardships, their credit card doesn’t go through, etc. If you have delegated this work to a team member and they know what to do for any situation, you spend less time having to assist and more time working on business development.
Do you find yourself chasing down money? Why? Anything that halts your success needs to be reviewed and improved.
Money is a hard topic to talk about sometimes, so I always say it’s best to have those conversations over the phone and not via email. Send a follow-up email to keep track of what you spoke about and to have notes on the topic, but that should be secondary to the actual chat.
You should also have processes around your budgeting, cash flow and expenses.
For instance, if you belong to a networking group and pay a yearly or monthly fee, you can set up a spreadsheet and track the people you have met through that group and how it has benefited your business, as well as how you’ve been able to help others. Maybe you have gotten a speaking gig or hosted a webinar through these connections. Maybe you were able to connect two members to one another. The main point is having a good understanding if this group is a good use of your time and money and you can only do that through tracking and systems.
If you have outsourced your finances and perhaps use a bookkeeping service or virtual CFO, what reporting can they provide for you to help you understand your money with more ease? Ask them! They don’t know what you want to see unless you ask.
Think about the current way you deal with every aspect of your finances and if any areas are lacking when it comes to systems and processes, now is a good time to start getting SOPs in place.
It’s springtime, it’s the season of new beginnings and I’m actually in the process of creating more SOPs in my business right now. If you want to chat, I can truly say, I have been there!