Financial visibility is the degree of transparency of a business’s financial information. It is the ease at which a business’s financial information and history can be accessed.
Financial visibility is vital to your produce business. Not only is it important for you as a produce distributor to be able to see where your money is going, but it is also important that you can provide this financial information to others. Third parties such as government agencies, investors, and financial institutions might be interested in assessing your financial information. Having highly visible records comes in handy in cases like this.
There is also the fact that a level of financial visibility is required by most federal regulatory agencies. To be on the right side of the law, it is important for businesses, including those in the fresh produce industry, to employ an adequate level of financial transparency.
Interested in enhancing the visibility of your produce business’s finances? Here are a few tips to follow.
Systematically record and document information
One mistake fresh produce businesses may make is that they don’t properly document their finances, or they use traditional bookkeeping methods that are inefficient.
Then there is also the matter of how these records are taken down in the first place. Sometimes, they are simply written in books that can get misplaced or lost over time.
Proper financial documentation is important to enhance your business’s financial visibility. Not only do you need to actually record your business’s finances, but you also need to keep these financial records for reference in the future.
Employing proper bookkeeping practices to record your business finances takes care of this. These techniques help you properly document your business’s expenses and revenue.
ERP systems, especially industry-specific solutions like produce accounting software, are great tools that can help improve the efficiency of your bookkeeping processes.
Guard your financial records
Proper bookkeeping practices are no good if you never get to find the records when you need them. This is why it is important to guard your financial records. With written records, ensure to keep them in a safe place—somewhere they can be easily accessed but are unlikely to get lost or damaged.
Sufficient protection also applies to older records, which should be kept securely away from anything that could damage them. They should also be accurately labeled by the period in which they were created and used. This way, you can very easily find older records by locating the exact books they were written in as opposed to having to look through every record book you have stored.
When using the traditional pen and paper method of record keeping, it often helps to choose distinct books—kinds that are easy to tell apart from other books. It helps to keep these books in waterproof cases or packaging. This may seem like a no-brainer, but you would be surprised by how often these accidents happen.
File those other documents
Keeping your financial records requires more than simply recording financial transactions. While this is indeed one of the things you want to be doing, there is so much more involved than simply keeping a log of all the sales and purchases you make over a period of time.
In addition to those books you use for record keeping, you also want to keep those other documents that serve as proof of transaction as well. Documents like receipts and invoices, proof of payments and other such documents can come in handy if there is ever any need to make your business’s financial records visible.
Always make sure to keep these documents in a secure place where you can always access them if the need ever arises. It helps to have a system of keeping these documents as this makes it much easier to retrieve them when needed. You could employ one of the several systems of documentation that exist, just make sure whichever one you choose best suits your business.
Think of financial solutions
Let’s face it, following the steps mentioned above requires much effort and time. It also requires some level of bookkeeping skills. This can be a lot of work for a fresh produce business owner to handle, especially when they have the rest of their business to run. Financial software solutions are a great way to fix this problem.
These types of software solutions help businesses handle their finances by automating their processes and simplifying their workflow. With solutions like this, you centralize your business’s financial tasks onto one platform. Invoices, transcripts, receipts and all other transaction documents can also be recorded with these solutions and accessed online.
As a fresh produce business owner, your best bet here would be to choose industry-specific solutions like produce accounting software. These types of software have been designed specifically for produce businesses and provide a streamlined solution. With these solutions, you get a much more tailored software that provides all the features for your business’s unique needs.