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Coronavirus: Why flexible cashflow forecasting is invaluable in a crisis

With the impact of the coronavirus pandemic evolving on an almost daily basis, there’s never been a more important time for your accountancy firm to support its valued clients. And helping affected businesses to get in control of their cashflow is likely to become mission-critical. 

14th Apr 2020
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If you’re going to help clients navigate the turbulent financial times that lay ahead, it’s essential that you have an approach to cashflow forecasting that’s up to the job.

Accountants as trusted advisers in an emergency

The move from compliance to advisory services has been a gradual evolution for many accounting firms. But with the economic impact of the coronavirus crisis hitting many smaller and medium-sized enterprises (SMEs) hard, we’re seeing the demand for business performance and advisory services ramping up significantly.

SMEs see their accountant as a true trusted adviser. What owners, managing directors and CEOs want is someone to guide them through the whole process. An adviser who can review their finances, explain the available Government grants and financial support and safeguard the short and longer-term future of their business and their staff.

The impact of uncertain cashflow during a crisis

A fifth of smaller UK firms will run out of cash due to the impact of coronavirus, according to research by a consortium of accountants – a worrying stat for anyone running an SME.

Sectors such as hospitality, entertainment and retail are already in shutdown, and there’s been a related downturn in levels of work, sales and revenue across the rest of the business community. In these uncertain economic times, businesses are beginning to struggle with their cashflow – and, in business, cashflow really is the beating heart of every SME.

Why cashflow forecasting is so important

Keeping in control of cashflow is tricky at the best of times. But maintaining a positive cashflow position during a global pandemic is testing for any SME.

What cash-strapped SMEs want is for you to help them get in control of their cash inflows and outflows – and not just the historic numbers either. Having access to accurate cashflow forecasts is more important than ever, allowing SMEs to see their future cashflow pipeline and recalibrate their business to resolve any cash issues.

These drilled-down forecasts also become invaluable when approaching banks and alternative lenders to access additional funding. Any business that’s thinking of applying for the Coronavirus Business Interruption Loan (CBIL) scheme will need to show a detailed forecasting model, proving the stability of the revenue, cashflow and debt levels in the company. 

The key value of flexible forecasting

The easier your cashflow forecasting tools are to customise, update and develop, the quicker your firm will be able to respond to clients reporting needs.

A solution like FD4Cast is based around the Excel format that all accountants will know inside out, but has the template-driven, granular functionality that you’ll need when tailoring forecasts to the drivers of each specific client. 

The ultimate outcome of the coronavirus is impossible to know at this stage, but with flexible, customisable cashflow forecasting, you can keep your clients one step ahead – providing financial information, expert advice and the support they need at this troubling time.

FD4Cast is offering a 50% discount for AccountingWEB readers during the COVID-19 lockdown. Email [email protected] stating you have seen this offer to receive the discount.