Financial Management Articles

4 Steps to Creating a Financial Plan for Your Small Business

When it comes to long-term business success, preparation is the name of the game. And the key to that preparation is a solid financial plan. It helps you pitch investors, anticipate growth and weather cash flow…

5 Best Practices to Perfect Rolling Forecasts

As 2020's volatility illustrates the shortcomings of traditional budgeting, the smart money is moving toward rolling forecasts. Here's how to succeed.…

5 Common Financial Problems That Small Businesses Face

Surviving as a small business was challenging even before the coronavirus pandemic, with only about half of small businesses keeping their doors open for at least five years and only about a third lasting 10 years…

5 Financial Needs Small Businesses Should Address

The economy needs small businesses to rebound: Before the pandemic, companies with fewer than 499 employees accounted for nearly half of the private-sector workforce, and the U.S. Small Business…

6 Expense Management Best Practices: The Complete Guide for CFOs and Experts

After employee payroll and benefits, travel and entertainment (T&E) is the second-largest controllable expense for companies. That makes following expense management best practices—the process and technologies…

6 Steps to Peak Performance in Business

What makes an Olympic champion so different from any other athlete? Is it genetics? Hard work? Great coaching? Arguably, you can cite all the above. But there is also the element of peak performance where…

8 Strategies to Deal With Inflation in Business

As consumer prices and global energy costs edge ever higher, it’s become clear that this bout of inflation isn’t transitory. Economists and business leaders alike agree that supply-chain-driven hikes will persist through the…

9 Financial Planning Tips for Small Business Owners

Starting a small business can be exhilarating and overwhelming all at once. It’s tempting to devote the lion’s share of time and effort to developing your product or service, hiring the right people and finding customers…

9 Key Benefits of Expense Management Software

All companies need to track the cost of doing business, part of which includes managing expenses. Employees must submit expense reports to be repaid for out-of-pocket purchases. Managers need to approve these…

10 Small-Business Financial Tips for 2020

Two businesses. Two smart leadership teams, two motivated staffs, two potential blockbuster products. So why is one growing and the other floundering? Three words: Smart financial planning. Whether you’re a…

10 Small Business Startup Costs

If you buy into the Silicon Valley(opens in a new tab) cliché, startup expenses boil down to a team of coders with gaming laptops, some cloud infrastructure, workspace in a hip incubator and an endless supply of Red Bull, all paid for by…

11 Top Travel Expense Management Challenges & How to Avoid Them

Overdue reimbursement checks, poor visibility into how much employees are spending and kludgy spreadsheet-based tracking systems are just some of the travel expense management challenges organizations…

12 Steps to Establish Business Credit for a Small Business

Many entrepreneurs think of their businesses as extensions of themselves. It’s a very human instinct given that every company springs from an idea, nurtured by talent and hard work. But as an owner, failing to separate…

13 Tips to Solve Cash Flow Problems

How’s business? For most companies, the answer changes by the month. After all, few businesses maintain consistent revenue throughout the year. But if you’re consistently struggling to pay the bills, you likely have a…

15 Key Financial Metrics & KPIs for Small Businesses

It’s critical that small-business leaders understand the financial health of their organizations, and financial metrics and key performance indicators (KPIs) inform that understanding. Small-business financial metrics shed…

15 Top Small Business Payroll Questions Answered

If you have a small business—or are looking to start one—chances are you already know that you’ll have to handle payroll for your employees. But managing payroll can be more complicated than many people expect…

16 Top Payroll Challenges for Small Businesses and How to Solve Them

Most entrepreneurs don’t go into business with the goal of spending their time processing payroll. If you’re like them, you’d probably rather focus on keeping your products or services competitive and your clients happy…

17 Steps to Improve Operational Efficiency

Businesses improve operational efficiency by reducing waste and improving productivity. These 17 steps give you the blueprint to making it a reality for your business.…

19 Key Small Business Financial Ratios to Track

Key performance indicators (KPIs) were top of mind for finance teams surveyed for NetSuite’s Winter Outlook report. Finance teams said they’re focused on using data more effectively, producing better reports on KPIs and…

20 Small Business Tax Deductions to Know: Free 2022 Checklist

Taxes are a top financial challenge for small businesses surveyed in NFIB’s annual Problems and Priorities report — taking up four spots among the top 10 challenges. Federal taxes on business income and…

36 Business Expense Categories for Small Businesses and Startups

Attention to expense deductions may not play a prominent role in the financial planning process for small businesses and startups—and that may be costing them. Sure, you’re focused on customer service and…

A Guide to Financial Modeling for Startups and Small Businesses

Economic uncertainty was already a major concern for small businesses surveyed by the NFIB, and those results reflect pre-pandemic conditions. That uncertainty is a big reason why finance leaders want to better…

A Guide to Financial Projections for Startups

Financial projections and financial forecasting provide a view into the future financial health of your startup. The terms are sometimes used interchangeably, but there are key distinctions that make one a better tool for…

financial projections forecast for startups

Beginner’s Guide to Lease Accounting

Use this lease accounting guide to learn about the types of leases, how to present them on financial statements, calculations and the changes in the laws. CPA and CVA Denise Hozza shares expert advice for operationalizing the new standards.

Beginner's Guide to Accounting for Nonprofit Organizations

Budgeting vs. Financial Forecasting: Key Differences

A budget estimates how much money your business will earn and how much it’ll spend over a specific period. At its simplest, a budget lists fixed and variable expenses…

Building a Finance and Accounting Team for a Small Business

Every small business needs an accounting and finance function. How many people are on that team and what their jobs entail depends on the size of the business and the complexity of its finances. Accounting and finance staffing…

Capital Budgeting: What Is It and Best Practices

“Capital” is a popular term in the world of finance. The word on its own usually refers to a company’s available funds, such as its retained earnings or available credit or owner’s capital. When a company spends or invests its…

Cash Accounting: How It Works, When It Makes Sense and How It Differs from Accrual Accounting

When deciding how to report income and expenses, business owners may choose from two accounting methods: cash basis accounting and accrual accounting. Along with impacting how a business maintains its…

Cash-Basis vs Accrual-Basis Accounting: What’s the Difference? What’s Best?

Companies can choose between two primary accounting methods: cash basis and accrual basis. The adage “timing is everything” captures the biggest difference between them. Cash accounting reflects business…

Cash Flow Analysis: Basics, Benefits and How to Do It

Cash flow is the amount of cash and cash equivalents, such as securities, that a business generates or spends over a set time period. Cash on hand determines a company’s runway—the more cash on hand and the lower…

Cash Flow Defined: Types, Formula and Analysis

When you need to know how a business is performing, measuring cash flow can tell that tale. Experts advise startups to make decisions that prioritize being cash flow positive, even more than profitability, while established…

Cash Flow Statement Explained

One question is fundamental to any business: How much money is coming in versus how much is going out? A cash flow statement answers that and provides a clear picture of whether a company has the cash it needs to…

Chasing Profitability in a Changing Media Landscape

Media companies have just three ways to monetize content: sell per instance rights-to-use or recurring subscriptions, sell ads around the content or sell data on consumers. That’s it. Every revenue model essentially…

Cost of Goods Sold (COGS): What It Is & How to Calculate

Cost of goods sold (COGS) may be one of the most important accounting terms for business leaders to know. COGS includes all of the direct costs involved in manufacturing products. Understanding COGS, and managing…

Direct Deposit for Your Small Business: A Complete Guide

Paying your employees and contractors accurately and on time is a painless way to keep morale high and retain the talent that makes your company successful. Many businesses find direct deposit a reliable means to…

Due Diligence Explained: Advantages, Types and Processes

Due diligence is a broadly used term across multiple disciplines, particularly in the legal and corporate realms. In the context of business, it refers to the investigation performed by an interested party, including venture capital…

Earnings Before Interest and Taxes: EBIT Defined

Earnings before interest and taxes (EBIT) is a common financial metric used to assess a company’s operating profitability. Because it excludes some non-operating income and costs such as interest and taxes, EBIT can be…

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) Defined

Earnings before interest, taxes, depreciation and amortization, or EBITDA, is often described as a profitability metric. That’s misleading: A business may report a net loss but still have positive EBITDA. It’s more accurate to…

EBIT vs EBITDA: Key Differences & Calculations

Earnings before interest and taxes (EBIT) and earnings before interest, taxes, depreciation and amortization (EBITDA) are two commonly used measures of business profitability. As their names suggest, there are…

Efficiency vs. Effectiveness: What’s the Difference?

Both efficiency and effectiveness are critical for business success, but when should you focus on which, and how do you achieve them? This guide will define each concept, outline strategies to achieve goals and…

Expense Management Automation: What is it? How Does it Work?

After employee payroll and benefits, corporate travel and entertainment (T&E) is the second-largest controllable expense for companies. Because it makes up such a large chunk of a company’s financial outflow…

Expense Management for Startups: Basics and Software

Expense management is the processes and policies by which companies track and reimburse employee-initiated expenses. Better expense management leads…

Expense Management Policy: Definitive Guide [with Free Template]

Any company with employees who incur expenses must have a solid policy in place to govern these costs. Even the organization that has just a handful of employees racking up expenses needs a guide to explain what is or…

Expense Management Workflows: Streamlining and Automating Your Accounting System

Expense management is an important function for any company with more than a handful of employees. Whether they’re making expenditures while traveling, working remotely or doing their jobs onsite, most staffers…

Expense Reimbursement Policy Tips and Tricks for Small Businesses

Sometimes it’s more convenient for employees to pay for business expenses out-of-pocket. Whether it’s a dinner with clients, new tools for a specialized job or gas to get to meetings, business costs often end up on…

small business expense reimbursement policy

Expense vs. Expenditure: What’s the Difference?

Running your business costs money. You have to pay your employees, buy raw materials for products you sell and market your services. Keeping track of your expenses not only helps you see the financial health of your…

Extended Planning and Analysis (xP&A) Defined

Finance departments in well-run companies have for years developed best practices around financial planning and analysis (FP&A), which provides useful insights and analytics that help guide a business’s future direction…

Financial Analysis Guide for Small Businesses

In looking for a financial analyst, one small business posted a listing looking for someone who could work with the finance team to create financial reports, analyze data, review costs and prepare monthly financial…

Financial Forecast: Definition, How to Create, & Benefits

Without a financial forecast, as a business leader you’ll have a hard time gaining funding and essentially be navigating without a compass. Still, a forecast is by definition an educated prediction, subject to the usual…

Financial Forecast vs. Financial Projection: Key Differences

Financial terms are easily confused and often used interchangeably. But phrases like “financial forecast” and “financial projection” that sound similar are quite different…

Financial Forecasting Using Machine Learning

Financial forecasting refers to a process that businesses use to predict future revenues, expenses, cash flow, and improve profitability. Much like weather forecasting, the process may appear to resemble gazing into a…

financial forecast using machine learning

Financial Forecasting vs. Financial Modeling: Key Differences

In business development, people often refer to financial forecasting and financial modeling interchangeably. While there are commonalities between the two, forecasting and modeling are distinct functions…

Financial Management Explained: Scope, Objectives and Importance

In business, financial management is the practice of handling a company’s finances in a way that allows it to be successful and compliant with regulations. That takes both a high-level plan and boots-on-the-ground execution.

Financial Modeling Defined: Overview, Best Practices & Examples

If you’ve ever built a simple Excel formula to test how changing a variable would affect your revenue, you have already created a simple financial model of sorts. Financial models are essentially complex calculators—typically…

Financial Performance Defined

Just how financially healthy is your company? The answer to that question isn’t always clear. Maybe the business recently had great revenue growth or paid off a large portion of its debt. But hidden under those…

Financial Planning & Analysis (FP&A): Practices, Roles, Responsibilities, and Functions

Financial planning and analysis (FP&A) professionals own the financial planning, budgeting and forecasting process at a company to inform major decisions made by the executive team and board of directors. These employees collect, prepare and…

Financial Projections for Startups and Small Businesses

What’s on the horizon for your business? Will you need to hire new employees? Invest in new capital expenditures? Or maybe even consider opening a new location? Financial projections provide insight for small…

Financial Statements for Small Businesses: Tips & Samples

Regardless of your business’ size or the industry in which it operates, there are several financial statements you need to complete and update on a regular basis.

Free Cash Flow Defined

Any company that wants to fund growth must generate more cash than just what it needs to meet day-to-day operating expenses. Public companies might pay shareholder dividends, while private businesses may…

Getting Your Finance Processes in Shape for FASB’s New Revenue Recognition Rules

What do Apple, Best Buy, NetSuite and Sears all have in common? They all sell multi-element products, whether it's a refrigerator sold with a maintenance contract, a smart-phone sold with "more than…

Gross Profit Margin: What It Is & How to Use It

Gross profit margin is the percentage of sales revenue that a company is able to convert into gross profit. Companies use gross profit margin to determine how efficiently they generate gross profit from sales of…

How Much of Sales or Gross Revenue Should go Toward my Small Business Payroll?

Managing small business payroll often involves a delicate balance between maximizing revenue and limiting labor costs. If you have more employees than you need—or you pay them more than necessary—your payroll…

How to DIY Your Small Business Payroll in 2021

Managing payroll is a complex and exacting chore, and it’s important to get it right. Small businesses have many options for payroll processing, including software and online solutions that automate most of the steps and help…

How to Increase Prices Without Losing Customers, According to a Harvard Lecturer

Since March 2020, the cost of doing business has skyrocketed. Disruptions — not just supply chain snarls, port congestion, labor shortages and demand upsurges but also rising raw material, energy and transportation costs…

How to Manage Payroll for a Small Business

Your small business is up and running, and you’re ready to start hiring employees. With employees comes payroll, an essential and complex task. From tracking time to withholding and making tax payments, each…

How to Track Your Small Business Expenses in 7 Easy Steps

Many small businesses struggle to stay on top of their business expenses. Indeed, paying operating expenses was the most common financial challenge uncovered by the Federal Reserve Small Business Credit Survey, and…

How to Use Enterprise Value and Valuation Multiples to Drive Business Value

In two prior articles we explained valuation multiples and how to use them, and then explored different ways to calculate the value of a company via enterprise value. Those articles provide metrics and tools to help business…

How to Use Valuation Multiples to Compare Your Business

Have you ever read an article in the Wall Street Journal about a company that just went public and thought to yourself: “How is that company worth that much?” Or, have you ever wrapped up a hard quarter and wondered…

How to Write a Small Business Expense Report

Expense management presents many challenges for a small business. Reining in expenses, maintaining controls over who is spending company funds and understanding tax implications all directly impact the bottom…

Key Financial Forecasting Methods Explained

Financial forecasting arms executives with specific and accurate predictions they can use to make plans for the company, barring unforeseen circumstances. Those plans can affect everything from budgeting, hiring, sales…

Net Income Explained: How to Calculate, Formula, Examples

Understanding the financial health of your business is vital. And there are multiple important metrics you should track that can offer valuable insight. But perhaps the most important is net income, which indicates…

Payroll Explained: The 2021 Ultimate Guide

Companies that take payroll for granted may end up spending too much, alienating employees, even getting hit with hefty fines or lawsuits. While there are a lot of moving pieces—timekeeping, releasing funds to your…

Predictive Modeling: Types, Benefits, and Algorithms

Predictive modeling is a method of predicting future outcomes by using data modeling. It’s one of the premier ways a business can see its path forward and make plans accordingly. While not foolproof, this method tends to…

Quick Ratio: How to Calculate & Examples

Even well-run businesses may experience unforeseen cash flow issues that require them to sell assets to cover expenses — after all, revenue is rarely static month to month, and disasters happen. But how do you as a…

Revenue Management Defined: Ultimate Guide for 2022

Many businesses face huge swings in demand over the course of a week, a month or a year. This can be especially difficult for businesses with inelastic supply and high fixed costs, like airlines, hotels and golf courses.

Revenue Recognition in the Cloud

Staying on top of revenue recognition is a major challenge. Getting it right means keeping pace with fast-changing licensing and distribution models, managing the complexities of multi-element contracts…

Scenario Analysis Explained

In business as in life, the only thing that’s certain is uncertainty. Scenario analysis is a powerful process for navigating the uncertainty of the future by analyzing the potential business impacts of future events and…

Scenario Planning: Strategy, Steps and Practical Examples

Get free scenario planning templates, how-tos and best practices in our handy guide. The goal: Be proactive and prepared.…

Small Business Expense Management: 10 Ways Expense Software Can Help SMBs Grow

Expense management is the process by which businesses reimburse employees for money spent on business-related matters. It is most often associated with travel-related expenses. But to truly benefit the business…

Small Business Financial Health in 2020: A Guide

The “financial health” of a small business is open to interpretation, dependent on the health of its industry or the stage of the company’s journey or the challenges it has faced. But there are some proven metrics that…

Small Business Financial Management: Tips, Importance and Challenges

It is remarkably difficult to start a small business. Only about half stay open for five years, and only a third make it to the 10-year mark. That’s why it’s vital to make every effort to succeed. And one of the most fundamental…

Small Business Payroll: From Expenses to Deductions and Reporting—Everything You Need to Know

For many small businesses, payroll expenses are one of the biggest costs of doing business. Paying employees can also be a time-consuming job—and it’s critical that it’s done right. Even if you have relatively few employees…

Small Business Payroll and Labor Laws: What You Need to Know to Stay Compliant

If your business employs full- or part-time workers or hires contractors, you need to know your legal obligations. Federal and state laws are designed to protect employees, ensure a safe workplace and prevent discrimination…

Small Business Payroll Statistics: Numbers You Need to Know

Pre-COVID, small businesses represented the vast majority of U.S. employers. While these companies were disproportionately affected by shutdowns, those that stayed open and were able to take advantage of the…

Small Business Payroll Tax Credits: 13 Credits Every Business Owner Should Know

Tax credits for small businesses can help them stay afloat, particularly during an economic downturn. For example, in the midst of the COVID-19 pandemic, the 2020 employee retention credit provided a $5,000 credit…

Small Business Payroll Taxes: How to Calculate and How to Withhold

It’s gratifying that your small business puts people to work, but managing the process that pays their wages is a top financial challenge. Still, managing payroll—and payroll taxes in particular—is important and necessary…

T&E Expense Report Management: Best Practices and Tips

Remember when expense reports focused on reimbursing employees for travel expenditures? While the COVID-19 pandemic put the kibosh on most trips, it didn’t eliminate the need for T&E reporting. With the shift to…

The 2020 Expense Management Software Guide for Businesses

Expense management is the process and the policies associated with how an employee is reimbursed for money spent on work-related items. Travel-related outlays most often come to mind when considering the process of submitting…

The 3 Most Important Financial Reports for Small Businesses

Following a recent quarter end, Oracle reported its total quarterly revenues were up 11% year-over-year, with international sales accounting for 60% of its revenue. Every quarter, anyone who’s interested can get a glimpse…

The Importance of Financial Forecasting

Business leaders who adopt and maintain financial forecasting best practices are better positioned to grow — and to weather unexpected setbacks. While it’s impossible to predict the future, as the COVID-19 pandemic of…

The New Lease Accounting Regulations: ASC 842 and IFRS 16

Now that public companies have adopted ASC 606 for revenue accounting and private companies are on track to do the same by the end of this year, a new accounting change is on the way that will address the way…

Top 13 Expense Management Tips for 2020: Save Your Business Time, Money and Confusion

A shift to working from home may have pushed expense management initiatives to the back burner. After all, we’re not hopping on planes every other week or doing team-building happy hours. But CFOs need to be…

Top 13 Small Business Payroll Mistakes and How to Avoid Them

Managing payroll is one of the most important functions for a growing business. But it’s also surprisingly complex, and it’s easy to make mistakes that may have costly and painful consequences. Common payroll errors…

Top Expense Management Industry Trends in 2020

Think entering receipts by hand and then emailing files around for approval is still how expense management gets done? Not so, and if your company is stuck in manual mode, you’re wasting everyone’s time, not to…

Ultimate Small Business Payroll Software Buyers’ Guide for 2021

The right payroll software can have a lasting positive impact on a small business. After all, paying employees correctly, consistently and on time is a fundamental step in building trust with your workers and motivating…

Understanding the Costs Behind Small-Business Payroll

Paying employees and contractors accurately and on time is a critical task for any small business. But it’s also a time-consuming and detail-oriented job—and errors can have serious consequences, including tax penalties. In…

What a Budget Is and Why Your Business Needs One?

A budget is an essential planning tool for estimating your business’s future revenue, expenses and profits. It helps control spending and identify potential problem areas where revenue might not cover spending and…

What Are Business Expenses? Examples, Tips and FAQs

Any company will have business expenses. Meticulously tracking them ensures you know where your funds are going, and it helps you reduce your tax liability. It’s also crucial to understand what business expenses are and…

What Are Capital Expenditures (CapEx) & Why Are They Important?

In accounting, a capital item is any asset, from real estate to office furniture to company vehicles, that’s carried on the balance sheet and depreciated over a set period of time…

What Are Flexible Budgets? 4 Best Practices

After months of fan angst, Major League Baseball announced in July its plan to safely play a shortened 60-game season. It was a valiant effort, summed up in a detailed 101-page document optimistically titled, “The…

What Are Operating Expenses? A Business Guide

Operating expenses are expenditures directly related to day-to-day business activities. Examples include rent, utilities, salaries, office supplies, maintenance and repairs, property taxes and depreciation…

What Are Selling Expenses? How to Calculate & Why They’re Important

Every business incurs selling, general and administrative expenses (SG&A), which are often a part of the business’s operating expenses. SG&A can be compared to revenue to indicate whether the business is spending…

What Does Per Diem Mean? What Are the Per Diem Rates?

When it comes to paying for business-related expenses for travel, companies have a number of options: providing employees with business credit cards, reimbursing them for actual expenses incurred using travel and…

What Is a Non-Operating Expense? What Does It Mean for My Business?

A Companies often incur expenses that aren’t directly related to the day-to-day operating costs of running the business. These are categorized as non-operating expenses, and it’s a good accounting practice to tally them…

What Is Agile Finance? An Expert Guide

Today’s business environment is fast paced, hypercompetitive and constantly changing. It’s no place for the rearview-mirror finance and accounting processes of old. Instead, companies are starting to adopt agile finance, a modern approach to financial management that changes the way finance teams work and create value. Agile finance…