2024 is well and truly underway - how has your financial strategy adapted to the changing landscape? All SMEs today should be looking to thrive and compete in an increasingly difficult market, so staying ahead of the curve is crucial. Our team of experienced CFOs have come together to share their top five financial tips for SME owners, for you to take away and implement into your business today. These insights are designed to bolster your business's financial health and drive sustainable growth.

1. Master your cash flow management

As we know, cash flow is the lifeblood of any SME. If your cash flow management is not up to scratch, your business is heading downhill. If you’re experiencing any of these 7 common cash flow pitfalls, it’s time to clean things up.

Here are our top three tips for improving your cash flow in 2024:

Create a cash flow forecast: Implement a system for weekly or monthly cash flow forecasts. This will help you anticipate future cash needs and avoid shortfalls.
Evaluate your costs from 2023: Is there anywhere you can pull back on spending? Many businesses, particularly younger ones, get excited and spend on unnecessary luxury items for their business and themselves.
Redefine your invoicing terms if necessary: Streamline your invoicing process and follow up on overdue payments promptly. Consider offering early payment discounts to encourage faster settlement.

2. Review your financial software for the next financial year

In an era where technology is rapidly advancing, having the right financial software can significantly streamline your business operations and enhance decision-making. Our CFOs stress the importance of reviewing and upgrading your financial software in 2024, if necessary, to stay competitive and efficient.

Here’s a step-by-step checklist for completing your evaluation:

Assess capabilities: Evaluate if your existing financial software meets your current and foreseeable future needs. Does it integrate well with other tools you use? Is it user-friendly and scalable as your business grows?
Explore automation features: Look for software that offers automation in areas like invoicing, payroll, and reporting. Automation not only saves time but also reduces the likelihood of human error and is more important than ever in 2024.
Seek feedback from your finance department: Involve your employees and those who regularly use the software in the review process. Their insights can be invaluable in identifying pain points and desired features.

3. Prioritise data-driven decisions

Leveraging data for decision-making is more important than ever. Our CFOs here at The Finance People emphasise how incredibly crucial making data-driven decisions is in 2024. With more tools, more channels and more spend comes more responsibility to understand how that investment is impacting your business. Having the data at your finger tips is going to make your life much easier. If you’re not sure what financial management information you should be tracking, read our blog on this here.

Are you thinking of making 2024 the year you level up your financial MI? Here’s how to get started:

Identify the KPIs in your business: Make sure they’re realistic, measurable and personal to your business.
Analyse as closely as possible: Break down your financial MI by department, product line and country. Take as much away from it as possible.
Create the reports: You could make them daily, weekly, monthly or annually - or a mix of all the above. As long as you can keep them up to date!
Data-driven decisions: Create actionable to-dos based on your insights.

4. Take a look at your team

Your team is your greatest asset. Managing and growing your team effectively can significantly impact your business’s success. Whether you need to invest in team development, bring on board a new fractional CFO or even promote a high performer; keeping on top of your finance team will ultimately result in effective finance management and strategy, which can benefit your bottom line in the long run.

At The Finance People, our fractional CFOs in the UK can provide strategic support and guidance for SMEs, train and manage your lower-level finance employees and complete project work, such as software analysis and management information.

5. Diversify revenue streams

Explore different avenues for revenue generation. This might include introducing new products or services, tapping into new markets, or finding alternative sales channels. Diversification can help mitigate risks associated with relying on a single income source. Our CFOs recommend working with your Product, Sales & Marketing teams to explore different options, or have our part-time finance experts do this for you.

Want to make 2024 the year your business thrives?

In 2024, no stone can be left unturned. By implementing these five finance tips from our experienced CFOs, SME owners can navigate the financial challenges of 2024 with greater confidence and strategic acumen.

We understand that many SME owners, MDs and Founders wear various hats and may struggle for time. How realistic is it to make all the above a priority this year, by yourself? If this sounds like you, book a consultation with our CEO, Anita Tweats at The Finance People. We’ll work closely with you to match you up with a cost-effective, flexible fractional expert to fill the gaps in your finance strategy and operations. Whether you need support with your financial management information, your accounts, building relationships with banks, seeking funding or managing your existing finance team; our fractional experts can identify gaps and help you make 2024 the year your business thrives.

Get in touch today; we look forward to hearing from you.

5 Finance Tips from Our CFOs to Apply in 2024