Managing your clients through lockdown
Accountants face further headaches as a second English lockdown to set to start this Thursday. Kirsty McGregor advises firms dealing with anxious clients and little time.
Up until this weekend accounting firms were preparing for the prospect of the tiered lockdowns and managing clients across several local authority areas and regions. Boris Johnson relieved accountants of this regional complexity by rolling out a tougher lockdown across England.
Accountants have endured one lockdown and must now muster the strength to manage another round of business support for clients who may not have recovered from the spring restrictions.
The prime minister also extended the furlough scheme covering 80% of wages – much to the chagrin of accountants who had spent weeks working on job support scheme calculations. The lockdown is set to end on 2 December, but uncertainty still clouds businesses as the further measures and restrictions could continue for some areas or businesses.
With the database of potential business support becoming ever more voluminous and complicated, how do you manage when your clients have numerous trading situations, some of which are worsening yet again and many of whom are very anxious?
We all have a limited capacity and resource. We need to ensure it’s used as efficiently as possible over these next few months when our time could be called upon by more businesses than we can handle.
Segmenting your client base and getting ahead of the curve is the only answer.
Identifying clients with the greatest need
Q4 trading may be a bumper time for some businesses this year, especially if they are selling to consumers online or supporting those businesses in the supply chain. But for others, it could be a disastrous end to the year. Review your clients’ business operations and contact them to offer support if you think they will be particularly adversely affected. Practical things you can do to help include:
- assisting to prepare projections
- submit tax returns sooner than normal deadlines to speed up any repayments due
- looking ahead to tax due dates for Q1 and onwards next year and if necessary, agree an extended Time to Pay schedule with HMRC
- provide moral support and encouragement for them to go ahead with a possible downsizing strategy
- any other cashflow benefits you can suggest including reviewing working capital systems or taking action to recover bad debts
Those with insolvent balance sheets may need further support in respect of potentially breaching the wrongful trading regulations. Provide them with insolvency and legal contacts and encourage them to seek advice about the steps they are taking when continuing to run the business, to ensure they are aware of their obligations
I would encourage all businesses viable in 2019/pre-Covid to ensure they’ve taken advantage of the CBILS scheme - the deadline has been extended until 31 January 2021. Capitalise is reporting that applications have already moved from taking a matter of days to several weeks, so action needs to be taken sooner rather than later. Ideally, clients will have a fallback cash reserve to last them for several months if trade declines again. If businesses already have Bounce Back loans, multiple smaller loans or asset finance agreements, they should be reviewed to see whether a CBILS facility will be cheaper or less onerous in terms of security requirements and repayments.
Control your environment
Utilising all the skills we’ve ever learnt on training courses for effective time management, if firms can focus in now, on those clients who either need the most assistance or can be helped the easiest, this will reduce the load before the client base demands that time anyway, potentially all at once.
Segment, review and advise proactively, before the demands on our time become too overwhelming. As some accountants have said, it’s been like tax return season for months on end
No matter how harsh the weather this winter or the restrictions imposed on us due to the pandemic, one thing we can control is our own environment for managing our clients’ needs.
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Kirsty is a chartered accountant and Chairman of The Corporate Finance Network.
She has advised SME clients on corporate finance matters and transactions, including having set up several corporate finance departments for regional firms of accountants.