The sustained impacts of COVID-19 are creating both challenges and opportunities for Australian and New Zealand businesses. To either capitalise on new opportunities for growth or supplement areas of the business that have suffered as a result of the pandemic, many organisations are offering additional products and/or services that may or may not relate to their core activities. While these additional offerings may be the key to resilience, organisations should be wary about the level of risk they can present.
Many businesses had to diversify with new products and services to cope with the ongoing impact of COVID-19. For example, dine-in restaurants transitioned to takeaway and home delivery during lockdowns and, in many cases, have continued this as an additional offering after pandemic restrictions eased.
One of the biggest risks when it comes to side businesses is keeping track of invoicing and expenses associated with the niche business.
Invoicing and expense management for side businesses can often be caught up with core business financials, which can impact budgeting and the overall business picture. This can skew results and lead to poor decision-making based on inaccurate data.
To mitigate risks and keep track of revenue and expenses, diversified offerings should be managed separately with their own financial statements. One of the biggest mistakes both individuals and businesses make is trying to manage the expenses and invoicing relating to these expanded or diversified offerings using manual processes, such as spreadsheets, that are both time-consuming and error-prone.
Affordable, cloud-based expense and invoice management solutions now make it much easier for businesses and individuals to manage multiple expense and revenue streams by automating processes and supporting different categories of business.
For example, expense and invoice management solutions can automate spend management and invoicing processes and generate financial reports based on real-time data analytics so the business can focus more on revenue-generating activities than on financial reporting.
Automated, cloud-based tools simplify the spend management process across invoicing, expense tracking and reporting no matter how complex the business structure is, or how many different side businesses are involved.
In the digital age, more individuals and businesses will have the capability to expand their products and/or services to supplement revenue streams and build financial resilience. These side businesses can also grow and may even replace the core business.
Businesses and individuals that persist in using manual processes for their side businesses are particularly vulnerable to issues such as employee fraud and costly mistakes. They also face the risk of being left behind as the digital economy takes over. Conversely, having the right digital tools in place not only supports the management and growth of the side business but can help business owners easily identify new revenue streams that may otherwise be missed with manual processes.
Therefore, it makes sound business sense to use digital tools that provide robust financial processes with real-time analytics and can scale with the business and all of its activities.