by Paula Ramos
Financial Analyst
Quality financial management is essential in any line of business and is one of the main areas responsible for the business finding continued success and stability. A financially healthy company is better prepared to take advantage of development opportunities and face routine obstacles that arise in the operation. However, software development companies face unique financial adversities and challenges and must adopt a series of measures and requirements. With good financial management, Cesla has achieved satisfactory results, promoting effective cost reduction and increasing the visibility/predictability of the company's real expenses. These strategic actions ensure greater security in the management of planned x committed x effective, increasing confidence in the decision-making of the finance department, but above all guiding the company in its healthy growth, increasing revenues and controlling costs. In this article we will present some important tips for carrying out financial management in a systems development company.
- Developing a financial plan
Making a detailed financial plan is undoubtedly the first step towards efficient financial management. The plan should include a detailed breakdown of income and expenditure, but above all its projections for the coming months or years, which will define the course of action to be taken with regard to the use of budjets.
Our financial sector carries out annual planning with provisions based on data from previous years and the current commercial situation, where they are adjusted on a monthly basis according to changes that may have an impact so that the provisioning is as aligned as possible with reality.
- Keep a close eye on your finances
Keep strict control of expenses and income, recording all financial transactions. If possible, give preference to a system that can serve you efficiently by simplifying and making visible the challenges and points for improvement. It is important to have a periodic analysis of the entire financial flow, keeping a good overview of fixed costs, possible variations in the business and its main sources of income.
It's important to invest in a good management system so that you can control costs accurately and clearly, helping you to make decisions based on reliable data, making the return on this invested capital more tangible and predictable.
In our company we use an ERP system (a system responsible for controlling all process and information management and which allows all sectors to be integrated), which helps our finance team to control costs and expenses on a daily basis, and to extract reports with essential data so that we can develop monitoring indicators to help us make decisions.
- Good cash management
Cash management is always a challenge for any company, and it's no different for those in the software development industry. Avoiding potential cash flow problems is essential, so make sure that the control of incoming and outgoing money has a flow of dates that is beneficial to the company's health. In addition, adopt emergency reserve and financial risk management practices. This will certainly make a significant contribution in the event of financial crises, which any corporation is exposed to.
- Have clear and efficient cost control
Controlling costs clearly and efficiently guarantees the profitability of the business. This includes easily identifying opportunities for reduction, possible losses and misplacements, and avoiding waste. Have strict control of fixed and variable costs, where you can see more economical alternatives and analyze the efficiency of processes with suppliers and services used by the company.
- Investments in new technologies
A fundamental aspect for software development companies is undoubtedly the creation of investments in technologies that boost the efficiency and productivity of the business. In addition, be aware of new market trends and new developments in the sector, making provision for possible changes before they take you by surprise.
Our development department is also responsible for analyzing possible investments in new technologies that could bring us productivity gains and greater security in our business so that, together with the financial department, the solutions can be analyzed and implemented at the right time.
- Substantial project management
Projects in the field of systems development can often be particularly complex and involve a variety of costs, ranging from acquiring the relevant technologies and infrastructure to hiring highly qualified teams. It is therefore essential to have cost control for each project that covers its particularities, resulting in accurate data that can be used in realistic budgets without unwanted contingencies.
- Recruiting and retaining talent
In technology companies, human capital is especially valuable, as it is people who drive innovation, the development of products and services, and the achievement of competitive advantages. And in systems development companies, there is also the need to hire and maintain highly qualified teams, which often requires a high cost. Therefore, it is essential to create attractive benefits, have a qualified recruitment team and a collaborative environment that can make a difference in hiring and avoid staff turnover, which can lead to additional costs and impact on the flow of deliveries of ongoing projects.
By investing in the development and well-being of employees, companies will be prepared to face the challenges of the sector and achieve better results. Here at Cesla, our Human Resources team actively works to enhance this, developing humanized management, obtaining continuous feedback from employees and bringing in innovations that can provide a healthy environment for teams.
Without a doubt, financial management in technology companies requires a strategic and adaptable approach. The challenges of the system development company sector require planning and in-depth knowledge of the market, as well as a long-term vision, the ability to respond quickly to changes and careful management of financial resources. Being attentive to new technologies and seeking out innovations on a daily basis offer the niche market solutions that bring productivity and security to operations, with a view to guaranteeing the health and growth of the business. By overcoming these challenges, technology companies have the opportunity to drive innovation, sustainable growth and financial success.
