Chairman The Corporate Finance Network
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Savvy SMEs mean accountants must demonstrate value

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Kirsty McGregor tracks the impact online small business groups are having on the accountancy profession – and what this means for the services firms offer clients.

10th Jun 2021
Chairman The Corporate Finance Network
Columnist
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Now is a pivotal moment for the profession. “What another one?” I hear you say! Maybe we are often talking about fundamental shifts and that can become a little tiresome, but there’s no doubt that change is happening faster than ever.

Business owners now have a platform

After interviewing Gina Broadhurst yesterday, the lead of the campaigning group ForgottenLtd, I really felt that something had irreversibly shifted. She explained how 20,000 business owners had been given a platform via their Facebook group to discuss the services they are receiving from their respective accountants.

She described how these business owners are no longer working in a vacuum. They are now able to compare various service levels and pricing. This has resulted in many business owners wanting to move to another accountant after having little meaningful communication with their adviser this year.

Although the political lobbying by this group is more or less being wound down, the community they have created is going nowhere. The support they have given each other has been immense and life-saving in some cases. It shows how quickly groups can form and organise themselves when they have a common aim.

Decision time for businesses

As many of these businesses are now reaching crucial dates where government support is ending and loan repayments are beginning, they are turning to their accountants for advice. Those accountants who can advise quickly, or at least be able to refer to another expert, will maintain those relationships.

Those who have no answers or are just not willing to communicate effectively will lose those clients, either by the company ultimately failing or by the business owner moving their accounting requirements elsewhere.

Comparison and review websites haven’t featured accountancy services too heavily yet. However, the continued rise of social media is providing an alternative means of communication. In particular, individuals who would never normally meet in the real world are interacting and it is fulfilling the same role as those user reviews on Amazon. 

Few ever comment but many are ‘lurkers’ and read them, then make their purchasing decisions accordingly.

Time to review your services

We have seen within our client base that the best businesses have survived this year by being agile and having leaders who have been able to be decisive. The same is now true for accountancy firms. Is this the time to take another look at the services you offer to your clients and the capability of your team to deliver that advice? 

Business owners are now expecting support which goes beyond the historical data collection and compliance services. The best quality businesses will thrive when they work hand in hand with an accountant who can provide advice which is proactive, commercial and relevant to them.

How firms can demonstrate value

To support businesses with their working capital requirements going forward, we need to consider other solutions besides the most obvious of securing more external finance. Ensuring R&D credits and capital allowance claims are maximised are obvious steps, albeit they involve a time lag before the cashflow benefit is received.

We should always return to the basics of effective cash management by implementing good credit control systems, as well as offering referral solutions for debt resolution and litigation through the courts, if necessary, to recover potential bad debts. 

And last but not least, an area which is becoming exponentially more important for businesses and where capitalise.com is seeing an awful lot of enquiries, is around credit improvement. 

One of the most cost-effective financing tools for businesses is usually supplier credit, but if credit scores are depleted, especially after filing accounts with lower net assets and/or disclosures around going concern, then the credit agencies’ algorithms will be downgrading credit scores and directly impacting on suppliers’ confidence and credit terms offered. 

Firms who can offer a potential resolution for this will be able to provide an immediate credit injection to their clients, at virtually no cost.

So how can you demonstrate your full value in ensuring the resilience and growth of those businesses you advise?

Kirsty has written a guide on future-proofing your firm and the capital advisory services different accountants were offering.

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