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How to help your clients navigate through a downturn


The business implications of the Covid-19 pandemic are continuing to evolve and scale. Companies are facing huge drops in revenue, immediate cashflow issues and a huge amount of uncertainty around the future path of the business – so it’s never been more important for you, their trusted accounting adviser, to be there to support them.

8th Jul 2020
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But how can you offer effective help to the most affected clients? And what kinds of financial, strategic and emotional support should you be providing?

We’ve outlined the key ways you can help clients navigate the downturn.

The impact of an economic downturn

By the end of April the economy was about 25% smaller than in February according to Jonathan Athow, deputy national statistician for economic statistics at the ONS. Rishi Sunak, the Chancellor of the Exchequer stated that ‘in line with many other economies around the world, coronavirus is having a severe impact on our economy’

With a downturn in work, sales and revenue already a present threat, and a full-blown economic recession on the way, UK businesses are facing huge financial challenges – and they’re turning to their accountants for assistance during these troubled times.

Business clients want:

  • An overview of their financial position – the expert eye of an accountant is needed to assess the company’s financial health and look for the pinch points that lie ahead.
  • A future view of cashflow – so the client can see how cash inflows and outflows will pan out over the coming days, weeks and months (and where the big cash gaps will be).
  • Help to access funding – with advice on how to access the existing emergency government grants and loans, or options such as invoice financing or asset financing.
  • Day-to-day support and coaching – so the leadership team makes the right decisions, follows a sensible strategy and (importantly) has an emotional shoulder to lean on.

The need for granular financial information

In the short term, cashflow and funding are the two core areas of focus for business survival. 

Business clients may want to access loans, such as the Coronavirus Business Interruption Loan (CBIL), or the Bounce Back Loan Scheme (BBLS). However, banks and lenders will require detailed business plans – broken down by cashflow, budget, profit and loss and balance sheet – to prove the viability of the business and reduce the risk of lending.

The challenge of ‘the new normal’ must also be factored into any planning. The coronavirus crisis is likely to have a huge impact on how business works and society functions, changing the traditional assumptions and making it more difficult to guide clients in the current climate.

So, how can you access the forecasting and budgeting functionality that’s required?

How software provides the information and clarity you need

To flex your advice, and rework your assumptions and scenarios, you need software that enables you to fine-tune the client’s cashflow and budget predictions over time.

Traditional Excel spreadsheets just don’t cut it in 2020, placing too many limitations on the power of your cashflow forecasting. Generic business data dashboards can be restrictive when it comes to the level of customisation on offer, the forensic detail that’s available and the amount of prescriptive advice given re future actions that should be taken.

What’s needed is a tool like Forecast 5, which combines the power of detailed cashflow summaries and accounting platform integration, alongside robust, detailed and flexible cashflow forecasts. The software combines:

  1. Access to the main integrated reports – providing an overview of cashflow, budgets, profit and loss (P&L) reports and the balance sheet.
  2. A detailed overview of cashflow – so you can review and amend day-by-day cashflow expectations and actuals – now including a daily cashflow feature.
  3. Scenario-planning tools – allowing you to recreate and compare potential business scenarios, aiding decision-making for the client.
  4. An overview of loans – giving you the capability to include loans in the forecast, and provide a more holistic view of the client’s financial position.
  5. A granular view of income and costs – with the tools to isolate every single stream of income or cost in the most drilled-down detail.
  6. Flexible forecasting – with the functionality to alter forecasts based on real-time expectations, giving the client a more accurate idea of their availability to spend.

The benefits of daily cashflow updates

Navigating the choppy waters of the post-lockdown, post-coronavirus economy won’t be an easy task. And cashflow is likely to remain unpredictable and volatile for some time. That’s why Forecast 5 has developed its new Daily Cashflow functionality on an immediate 90-day rolling basis as part of its latest upgrade. 

The Daily Cashflow solution allows firms to:

  • Review and amend day-by-day cashflow expectations and actuals 
  • Generate the expected receipts and payments from their current budget
  • Refine cashflow by the day of the month that payment is expected
  • Amend numbers based on real-time expectations, to get daily bank positions and availability to spend.

Daily Cashflow is free to all existing customers and part of the latest release of Forecast 5. To try Forecast 5, please download a free 21 day trial here.