8 essential financial management tools for your business

Good financial management can make a total difference in the company's results. And, for it to be done in the best possible way, it is necessary to have some tools that will facilitate the work, guarantee the fulfillment of its accounting obligations and help to understand the real financial situation of the business.

In this article, in addition to learning more about the importance of these financial management tools, you will check out a list of 8 of them.

Discover 8 essential financial management tools

Now that you know how important financial management tools are, how about getting to know the main ones?

balance sheet

The Balance Sheet (BP) is a study that indicates the situation of the company's profits, dividends and equity. Through it, you can understand how the financial conditions of the business are, as its result represents the shareholders' equity – and this information is very relevant for strategic decision-making.

BP carries out a complete survey of all the company's assets and rights, in addition to its sources of funds and investments.

It is a mandatory document for most companies and must be submitted annually, at the end of each fiscal year. However, companies that want to have tighter control of their finances can prepare the BP more frequently — every six or three months.

Bank reconciliation

Bank reconciliation is a comparison between data from a company's financial records and the bank statement. Its main objective is to understand if everything that was registered really happened.

Thus, it is possible to identify errors before they become major problems and even some fraud within the company.

Income Statement (DRE)

The DRE is a mandatory document for most companies, which must be prepared at least once a year. However, ideally, the company should do this more frequently. After all, this demonstration allows you to analyze the performance of all the institution's financial transactions and understand whether the final balance is positive or negative.

The DRE analysis will help you understand the growth or reduction of values ​​over time, in addition to presenting the final result and the percentages of the DRE accounts that contributed to this value.

Control of Costs and Expenses

Control of costs and expenses is a financial management tool that serves to evaluate business expenses and the results reflected in these expenses. Thus, it is possible to understand whether the amounts currently charged for products or services are really fair and compatible with the financial objectives of the business.

Cost control also makes it possible to identify which sectors of the company are more expensive for the cashier – and this information can serve as a basis for an analysis of the results presented by each of the sectors.

In addition, detailed knowledge of business costs makes it easier to identify which expenses can be cut and which are essential for the smooth running of the company.

Cash flow

Cash flow is the record of all financial movements of the company, regardless of their value. Every entry and exit and exit must be recorded, no matter how small.

This control, in addition to facilitating the understanding of the financial situation of the business, will serve as a basis for the preparation of many other reports – including those whose delivery is mandatory.

Thus, in addition to facilitating financial management, cash flow control makes accounting work much more productive, avoiding errors and optimizing the time invested.

Internal Accounting Audit

The internal audit is a financial management tool that evaluates the practices carried out internally by the company. Its objective is to understand whether the company's result is in line with the market and to identify errors, fraud and bottlenecks.

Based on this, it is possible to draw up an action plan to improve internal processes, making work more productive and reducing the incidence of errors and rework.

Billing System

Billing systems are software that automate this process, which not every employee likes to do – after all, this type of activity can cause embarrassment and negative impacts on the employees' routine.

The system, in addition to helping control defaults, contributes to better financial organization and predictability of the company's revenues.

ERP

ERP, or Enterprise Resource Planning, is an integrated management system. This type of software allows the management of different areas of the company, with people, accounting, purchasing, sales and finance.

Having an ERP , in addition to facilitating the work of people involved in the financial control of the business, reduces the incidence of errors and automates various activities.

Another advantage of having this tool is that it can issue complete reports about the business in a few seconds, favoring data-driven decision-making.