Are you a creator who runs your own business? Or are you dreaming of joining the dynamic world of the creative economy, turning your ideas into a solid career?
The thought of being able to pursue your passion and above all, make a living from it sounds indeed intriguing, but being self-employed has never been a rosy path for even the most enthusiastic and determined people. Many have been taking on the challenge only to find out that there is too much on their plate, and their creative processes are interrupted by the overwhelming amount of administrative work, including raising business funds, planning and allocating your budget, and accounting.
Yes, financial management matters, no matter what kind of business you are in and however you would like to prioritize your creation. It also goes without saying that good financial management requires productivity, in both how it is productively practiced and contributes to productive outcomes of the business. This article provides useful tips on how to do finances with efficiency, so you will never have to slow down at your creative work.
What is productivity? And why is it important for your business?
Before digging in the ways to improve your financial management performance, it is necessary to be clear about the meaning of productivity in this context. Does it mean less time and effort are spent in completing one product, thus increasing the number of products created in a specific amount of time as we normally understand it? If this is the case, then what counts as a complete product? Should product quantity or quality be of more concern when we deal with raising productivity?
You may or may not consider these rather theoretical questions before, but probably on some occasions you have found yourself snowed under with work, trying to multitask to save time but felt nothing is done at the end of the day. At times you may have difficulties in overcoming procrastination because it seems impossible to tackle any task without knowing the full list of what ought to be done and in which order. It is just like you are going to prepare a complicated dish but do not know the required ingredients or the cooking steps, so you eventually give up and seek easier options such as eating out or online delivery. These alternatives work well as short-term solutions, however, they often come at a cost (unless you can ask someone to do the cooking for you voluntarily for free!) that is not friendly to those with limited budgets.
Working productively, therefore, means you have to go through all the possible solutions in order to balance out the cost – benefit scale, that is, to come up with “an ultimate recipe” which can help you make use of your existing resources for business development. Moreover, it is through this process of weighing options that you can stay focused on the set goals while keeping good eyes on the current situation. Everything is in check, so you will also have better chances of successfully handling unexpected events and investing in your business system to improve the value of your products.
Creative businesses and the role of financial management
For creative business owners, the range of their products seems endless. Art-based enterprises, including art workshops, music publishers, companies working in the fields of film, design and architecture are among the first that may come across our mind.
Nowadays, in the era of technology, creation can take various forms and shapes, from the computer software that is being used for writing this article to several multimedia applications which are becoming essential in everyday communication. Although the boundaries of creative businesses have been broadened than ever before, what they have in common is that they create products on the basis of intellectual capital.
At first, it may be hard to imagine the link between creative work and financial management if you associate the former with innovative, out-of-the-box thinking and the latter with matter-of-fact figures that spare little room for any adventurous idea. Here we are not implying that a talented artist cannot have a niche for numbers or vice versa (which is a huge misunderstanding because many of them are), but it is equally true that keeping track of income and expenditure, cash flow, and balance sheet is not normally one’s priority when creative time alone seems insufficient. Still, no one can deny the significance of good finance managing practices in any business, and creative corporations or even individuals are no exception.
First, it always helps to have a realistic picture of your business performance, and an understanding of the financial situation is crucial in this regard. Is your business making good profits? When and where is the money going in and out? What is the status quo of your enterprise in terms of assets and liabilities? Such questions should be asked frequently and the answers are to be sought carefully if the managers want their business to be sustainable.
Working for passion is one thing, but creative business owners may need to keep their feet on the ground when it comes to finances. Individual artists and designers who run their own businesses, start-ups, or small and mid-sized enterprises (SME) which can’t afford a team of financial professionals ought to look even closer into monetary matters, making sure that all the costs needed to create their products are calculated and taken into account. Don’t overlook any unpaid labor or external subsidies involved in the production process if you want to keep things in order or simply to charge the right price for your creation.
Second, proper financial management is an essential factor to attract investment. There is no doubt that investors want to make sure their money is in good hands and their trust will have certain rewards in return, be it financially, socially or both. One of the most straightforward ways to prove the profitability of your business (or at least, its potential) is to provide investors with a well-planned financial statement which shows how you are managing your budget to make a profit. In the case of digital fund-raising financed by crowd or fans that are being used by many creative businesses at present, it is even more important to convince the investors – future customers that you are making good use of their support to create quality products.
5 Tips on productive financial management
Now is the time for us to see financial management from a more ‘creative’ perspective. What can be done to innovate unproductive accounting practices that result in loss of time, money, and energy? The following 5 productivity tips are basic steps that any creative business can apply.
1. Use time wisely
Freelance artists or business managers, accountants or chief finance officials (CFOs), regardless of your position and workload, you are equal before time. Some people try to multitask to get ahead in the race against time while others take time to figure out their priorities – what urgent and important jobs they should do first and in what order. Do you see yourself in either type? Have you ever thought that you can save a lot of time by spending time on planning? Start with making your daily schedule which focuses on critical work items and seriously stick to it, you will see a whole difference in how setting a time limit for yourself can improve productivity. Self-reward when necessary, but also don’t go easy on yourself if the ‘deadlines’ are missed.
Humans are the capital of creative businesses, and this is true in the case of financial professionals as well. The ideal is that everyone in the team should be building their capability over time and establish effective communication that enables them to exchange ideas and cooperate with each other to complete a task. However, in reality, it may be just as important to delegate because no one can handle everything at once. Rather than sacrifice your time to answer all the clients’ email or meticulously classify receipts and invoices, again, you’d better do high-priority tasks such as writing a good audit report or double check on the calculations and collected data for your financial plan.
3. Optimize tools
Financial and accounting platforms and tools have been introduced and utilized in recent years to free up labor wasted on repetitive, time-consuming tasks in financial processes. Far gone are the days when accountants had to manually input and categorize data since digital technologies and automation have been transforming the way things used to be operated, faster and with fewer errors. But that doesn’t mean there is no room for boosting productivity. In order to take full advantage of the existing tools, the key lies in developing the skills and knowledge of their users – financial staff. It will be such a waste if they aren’t aware of all the functions of the softwares they are using or don’t keep up with the updated features that can help them work more productively. As the saying goes, “Knowledge is power”, learning to become an expert in your field and you won’t have to worry about being replaced by new technologies!
4. Embrace change
Enhanced productivity is the result of changes, not only in terms of implemented methods but also about adopting a forward-thinking attitude that welcomes innovations. As financial professionals, are you curious enough to question how things work the way they do? Are you willing to risk breaking down the routine to adopt a new approach which may increase efficiency but is likely to cause disruptions to the current system? If the answers to these above questions are ‘yes’, then you are having the right mindset to initiate changes and take on the challenges that follow. The reward for those who are ready to embrace changes is definitely worth all the effort. And remember that you are not alone in this transformative process. For example, receipt scanning and expense tracking services offered by Shoeboxed can relieve your burden of keeping and sorting out tons of paper bills, saving a great deal of time when there is a need to retrieve and organize data. Shoeboxed has different plans to cater for enterprises of all sizes, so this is perfect for start-up creative businesses which are often run by a small number of people with little accounting experience.
How can you know which part of the financial system and processes need to improve its productivity? What might be the productivity techniques that are suitable for your business? Just following the trend and applying new tools randomly before thoroughly examining their potential effects and preparing for necessary interventions may lead to counterproductive results. But even the most cautious minds can’t foresee all scenarios, and despite that, we shall continue to learn from failures, test and retest available productivity solutions. In this long-run experiment, it is advisable that every detail in the workflow be kept record of so that important information is not going to be lost in the transition. Moreover, by doing so, it will be easier to identify the gaps in the system where efficiency can be further improved to optimize workflows, raising overall business performance. With Shoeboxed, you can experience all our amazing features such as digitizing data from receipts and business cards, or creating customized expense reports for free in one month before making your choice. See more on our website https://www.shoeboxed.com/
Creative businesses and other enterprises alike can enjoy tremendous benefits from productivity management that facilitates strategy execution and cost – profit management. Financial professionals, thus, should also play an active role in making financial functions and processes more time and cost effective. Productive financial management practices can start with 5 basic tips which have been discussed above: Use time wisely, Teamwork, Optimize tools, Embrace changes, and Experiment.
Has any point mentioned in these tips been on your mind lately? Which tips are you interested in or have applied in your business? Share with us your thoughts and stories in the comment ??