Small businesses today are in a unique position. Historically, they have struggled to compete with big brands due to cash flow constraints and a lack of talent. However, with the help of smart tools, things are starting to look up for the small guys across industries.
Everyone has access to Business Intelligence and Data Analytics tools, which opens the door to data-driven decisions and optimized marketing strategies. Also, remote collaboration tools bring teams together from all corners of the world, making talent more accessible. Even further, smart financial tools serve as a great equalizer by automating time-consuming tasks such as bookkeeping, invoicing, and expense tracking.
The future is now a lot brighter for small players. With the right tools, you can conquer an entire market with just a handful of people.
Still, cash flow is what drives a business’s power to innovate and improve. This is why, in today’s guide, we’ll focus on the type of smart financial tools you need to future-proof your operations.
What Does Future-Proofing Your Business Mean?
When you prepare for the future (what else could ‘future-proofing’ mean?), you build a strategy for success. And everything starts with a mindset shift from being reactive (dealing with problems as they arise) to being proactive (building systems that minimize the impact of future shocks).
It’s all about building resilience, increasing flexibility, and embracing continuous innovation.
For instance, you want your business to be able to absorb shocks (like economic downturns, supply chain disruptions, or cyberattacks) and bounce back quickly. For this, it’s important to diversify revenue streams, build financial reserves, and have strong data security and contingency plans.
It’s also crucial to take advantage of any new opportunities that come your way (such as emerging technologies or shifting consumer trends). But this isn’t possible if your processes barely stand and your cash flow is dwindling. You need modular, scalable, and cloud-based systems that empower teams to make faster, data-driven decisions.
Lastly, growth requires consistent learning and improvement. This is why industry leaders invest heavily in research and development. As a small player, your best bet is to invest in employee upskilling and data analytics tools that point you in the right direction.
4 Steps to Future-Proof Your Business (Finance Edition)
The global smart finance market is projected to reach $115.11 billion by 2030. This explosive growth is due in part to mobile payments and online banking solutions, but software tools for personal finance and financial automation also play a role.
Of course, the trend accelerated due to smart technologies such as AI, automation, and cloud computing. As a result, many small businesses and entrepreneurs today can use a wide range of AI-driven financial tools that make their lives a lot easier.
Now, let’s see where you should focus your efforts to future-proof your business with the help of smart financial tools.
1. Smart Cash Flow Forecasting & Budgeting
These tools use your historical data and integrate with your systems (accounting, CRM, sales, etc.) to create dynamic, rolling financial projections and budgets. With their help, you’ll have a pretty good idea of where your cash will be in 3, 6, or 12 months.
Armed with this knowledge, you can run risk-mitigation scenarios (What if next quarter’s sales drop 15%?) and prepare strategies that will kick into gear the moment there’s even a whiff of market troubles.
If things go well and you’re in a surplus, these tools will show you the best investment paths to take, be it R&D, inventory, or hiring.
How do I choose the best tools for my business?
The best cash flow forecasting tools have these three features in common:
- Seamless, real-time data integration & automation (no manual data entry);
- AI-enhanced predictive forecasting that allows you to anticipate liquidity issues weeks or months in advance, giving you time to act.
- Scenario planning to quickly evaluate risk and opportunity, enabling fast, informed, data-backed decisions.
2. Automated Core Accounting & Bookkeeping
You didn’t start a business so that you could be a bookkeeper. But when your team is small, keeping track of transactions, expenses, and budgets often falls in the owner’s lap (even when you’re working with an accountant).
This is why a cloud-based software that automates data entry by syncing directly with your bank accounts and credit cards makes things a lot easier. Plus, these tools also handle invoicing, expense tracking, and basic payroll/contractor payments.
You’ll be able to keep clean, up-to-date records, making tax season faster and less stressful.
How do I choose the best tools for my business?
You need a tool that fits your activity and internal systems, so it’s best to run an in-depth analysis of the tools everyone in your industry uses. For instance, MYOB and Xero are two highly versatile cloud accounting tools suitable for a wide range of industries, particularly small-to-medium businesses (SMBs).
A quick MYOB vs Xero comparison can tell you everything you need to know about the features most important to your business. As a rule of thumb, Xero is the best option if you need simplicity, mobility, and deep integration, while MYOB is best when you have complex inventory, job tracking, and large-scale payroll needs.
3. Integrated Expense Management & Spend Control
The biggest leaks in a small business often come from uncontrolled operational spending. These tools use virtual cards and mobile apps to capture receipts, categorize expenses, and enforce spending rules before purchases are made.
All transaction data, receipts, and approvals are digitally linked and stored in the cloud, streamlining compliance and reducing fraud risk. Also, employees and managers see their remaining budget balance in real time, which boosts accountability.
How do I choose the best tools for my business?
Look for tools that have these powerful features:
- Pre-spending policy enforcement so you can control spending before it happens, not just track it after the fact.
- Customizable workflows that require manager or finance approval for expenses above a certain threshold.
- AI-powered receipt capture and real-time reconciliation to eliminate the lost receipt problem, drastically cut down on data entry errors, and speed up reconciliation.
- Two-way, seamless accounting software integration to ensure your spending data is always accurately reflected in your Profit & Loss and Balance Sheet.
Tools like Ramp, Expensify, and BILL Spend & Expense (formerly Divvy) offer these features, in one way or another. Ramp helps businesses save money and automate compliance; Expensify is great for managing out-of-pocket expenses and travel; and BILL is great for creating and managing budgets across the entire company.
4. Integrated Risk, Compliance, and Data Security
Future-proofing also means protecting your assets, your data, and your reputation against threats you can and cannot see. For this, you’ll need tools specializing in financial defense and strategic protection.
Sadly, there isn’t a single app that can do everything; you’ll need a suite of tools to automate key security and compliance processes. Besides tools that ensure your business is tax and data privacy compliant, you also need advanced fraud monitoring systems that flag unusual patterns and cyberattack threats in real time.
Wrap Up
In the end, the best financial future-proofing strategy is the one that’s customized to fit your business’s needs. The good news is that you have a wide range of smart tools to automate time- and effort-demanding tasks so you can focus on planning for a much better future.
