How accountants can add value to clients

The role of the accountant

Today’s accountants are far more than just number-crunchers. They’re important advisers and strategists to business leaders and clients.

A good accountant who is well known in their sector is often considered a trusted adviser by their clients. In many cases they provide services that go well beyond just producing the accounts. 

So just how can accountants add value to their clients and increase their top line?

Accountants have an important job, we know that, aligning the numbers to make sure their clients comply with prevailing accounting standards and meeting HMRC requirements and deadlines.

However, research shows that a business owner’s accountant is also typically the first person they turn to for business-critical insight and advice.

A skilled accountant makes the numbers talk and produces a reading of the strengths and weaknesses of the company. Helping to forecast potential challenges and bumps in the road and identifying key opportunities, they can be key partners in building a plan of action whether in areas of operational efficiency, marketing, forecasting revenues or managing cashflow.

Critically, an accountant can also help a client understand sources of growth capital and guide them to secure funding.

Increasingly, lenders scrutinise a firm's financial control and want to see up to date management accounts as well as more comprehensive management information including revenue and cashflow forecasts and key customer analysis and an understanding of existing debt. For lenders, accessible, up to date management information is a barometer that a business is robust and well run.

A recent survey of 5,000 UK SMEs by the Business Banking Insight (BBI) found that when looking to raise capital, of the 63% that would consider a business loan, 70% would talk to their bank to seek more information on financing and 78% would turn to their accountant.

There is much to be gained by an accountant becoming an extension of a client’s business.

Key areas where you can help your clients:

1. Support your clients to build top quality Management Information

Many of your clients are likely to have a Financial Controller but won’t have a full time Finance Director. They will have basic accounts but may not have much more.

Accountants can provide insight to help the client’s business, especially when a client is looking for funding.

As an acting Finance Director, providing cashflow forecasting and working capital management solutions is a key value add. SMEs are very susceptible to volatility in cash flows, strong control frameworks are key to avoid and/or predict liquidity problems.

Financial planning, budgetary control, financial health checks, controls and procedures, profitability analysis, risk management and due diligence are other areas where an accountant can step in and support.

By further helping your clients monitor KPIs and prepare Executive Summary Board packs is a great value-add discipline and invaluable when seeking finance.

2. Help to articulate the business strategy and plan

You can help entrepreneurs avoid common pitfalls when starting a new venture or extending the reach of a current product and brand by helping them get their ducks in a row at the start.

As a partner who knows the business well, you can support in encouraging a clear articulation of the business strategy and business plan.

Having a cogent and well documented strategy and a business plan with clear priorities is critical. As well as providing clarity for external stakeholders – partners and suppliers, it is also a valuable to ensure managers and staff understand where the business is headed, what is important and how they should prioritise their day-to-day workload and make the necessary trade-offs.

With your close association to the business and understanding of the financials and cashflow constraints, you are well placed to support this activity.

Helping your client get their ideas on paper and measuring progress through KPI reporting is a real value add and is information that will always be required if they are seeking funding.

3. Recommend software available to support SMEs and enhance financial control

Easily accessible management information with a clear single source of truth gives confidence in the integrity of the numbers that underpin a business.

After decades of neglect from the tech space, there is finally an interest in solving the finance problems of the larger SME with a raft of technology solutions to help them manage the complexity of growth.

Whether you are supporting your clients select the right accounting packages, benefit from open banking applications or leverage the wide range of financial planning tools on the market, knowing your way around the latest SME focused fintech products is a key value add.

These tools have led to new ways of thinking about finance and enable finance teams to track liquidity in real time as well, plan and forecast with greater accuracy and ensure the business makes data-driven spending decisions, aggregating all sorts of data into real time dashboards.

A business that not only has their books in order but has them right up to date will also lead to much quicker lending decision.  

 We suggest using financial planning tools like Fathom for insightful reporting and actionable financial insights together with easy consolidation. Fluidly for cashflow management, Causal for FP&A and becoming comfortable with tools like Codat that allow companies easier access to the underlying systems to enable more automated underwriting or decision-making.  

4. Be aware of funding solutions for SMEs and support the loan application process

Given you are already immersed in your client’s finances, and close to the books, it makes complete sense to start advising your SME clients when cash-flow issues arise.

As a trusted advisor, you can help by developing cash flow projections and direct them to suitable lines of credit, to ensure payroll, bills and other costs are met.

Many of your clients will seek funding from the High Street banks & Asset Based Lenders but are unaware Debt Funds like SME Capital exist for ‘cash flow lending.’

If your clients get a ‘no’ from the bank & ABLs, they shouldn’t think the transaction or growth and development plans aren’t fundable. This is SME Capital’s core proposition to deliver tailored cashflow lending for £500k - £5m funding requirements

So as part of your strategic planning and accounting services, make sure your client is aware of debt funding and lenders like us. 

You can help prepare comprehensive loan proposals, based on the numbers, cash-flow projections and business planning you are already close to – to help your client identify the best funding option and best lender for them.

This will give them the confidence to put together the required documentation needed for a loan application, including a business plan and forecasts as well as comprehensive management accounts. 

A big mistake many small business owners make in attempting to grow their business is applying for a loan with insufficient preparation or knowledge.

5. Introduce your clients to specialist support as required

Many businesses rely on informed strategists outside their organisation to help shape their roadmap.

You can put your client’s plans and ideas on paper through business plans, which are not only needed to secure financing, but also are recommended when starting a new venture or product, expanding a business, or looking to make an acquisition.

You can also help your clients conduct market research and make recommendations from your trusted network to keep them informed a head of potential moves. 

Map out targets and goals and help your client track their success.

To assist a client with a transaction, for example a M&A transaction, a good solution may be to introduce the deal – especially if complicated and multi-party – to a boutique Corporate Finance Advisor who are experienced in M&A work. Typically, these firms don’t have audit/tax services and therefore won’t be a conflict of interest for your accountancy practice.

Some CF boutiques will even share part of the fee with the introducer (you). You can even act as a Non-Executive Director, retaining involvement, while amplifying goodwill and influence and avoid potential pitfalls of delays, costs and damaged key relationships by having a specialist third party assist your client instead of taking it all on yourself.

Other areas where an accountant can add value is helping form clear succession plans for a family business on the financial side.

From discussing who will run and own the business to reducing the tax burden, you can save a client a headache with a smooth transition by avoiding a drawn-out affair through a carefully crafted succession plan.

For example, it can take time (3 years minimum probably) to prepare a business for a MBOs/MBIs/partial exit. Even a ‘Trade Sale’ takes a couple of years.

You can assist your client understand and put in place the processes and contracts than need to be documented, outlining the required level of management responsibility and the statistical accounts needed to be presented with the exit in mind.

In Summary

There are plenty of ways you can value to your clients, who are very likely looking to work more closely with you on business strategy and key financial decisions. 

If you would like to discuss how you can help your clients in more detail or discuss our wider funding capabilities, do get in touch.

About SME Capital

SME Capital was founded to support the growing number of SMEs who face difficulty or frustration in accessing capital through traditional methods. We understand the importance of real and trusted relationships in the SME lending market and have dedicated Regional Directors based across the UK. By combining traditional lending expertise with the latest in data analytics, we are supporting established UK SMEs with their long-term objectives and business ambitions.