Like the old axiom says, “You should be working on your business, not in your business”, but for small business owners, the reality of cashflow pressure always pulls them back into the nitty-gritty of daily management.
Poor cashflow causes one in four businesses to fail in the first year
Business owners have so many considerations: making sure the leads pipeline is always full, keeping clients happy, looking after their staff and trying to find some work/life balance. In amongst all of this is managing cashflow, which is a constant worry, particularly around payroll time. This gives accountants an important role. Unfortunately, it is often regarded as too difficult to do.
Five ways you can help your clients manage their cashflow stress
Encourage them to keep their accounting software up to date and reconciled with the bank account
Sounds obvious doesn’t it, but it is so often neglected. Can you help them with it? That way, you and they can be sure their data is accurate and correct advise can be given on which receivables should be chased or payments deferred
Communicate about predictable events
Proactively providing updates to your client about any predictable events that cause potential shortfalls or peaks can really help them. Monthly NI and PAYE, Quarterly rent and VAT and annual Corporation Tax can all draw large amounts of liquidity out of a business at inconvenient times.
Create a cashflow forecast
If your client can’t do this for themselves, why not offer to help them create one as a chargeable service? The most basic way is using a spreadsheet, but there are many tools that integrate with cloud accounting software to help create cashflow forecasts and keep them up to date. We like Float for example.
Find ways to give them advance notice of cashflow challenges
Receiving an alert if the bank balance goes below a threshold is one thing, but predicting cashflow squeezes with some accuracy, ahead of time, is where you can really add value. This needn’t be a time drain for you. With new technology like CaFE, which simplifies the view of any businesses’ cashflow position, you can provide more alerts and peace of mind than any accounting software can do on its own.
Keep an eye on clients who may be in trouble
Any small businesses can run into challenges. Use your knowledge to keep a special eye out for ones that could be in most urgent need of help and keep in touch with them. You could earn a lifetime of loyalty by helping guide a client through a sticky few weeks. A tool like CaFE will highlight to you any clients nearing a danger zone meaning you don’t have to rely on memory or sort through every client to find the ones you should contact. CaFE immediately navigates you to who needs your help first.
A small amount of effort on your part, using tools like CaFE, could really help remove the stress your clients experience and embed you as a valued business partner. Anything that helps keep your clients focused, their stakeholders happy, and you exceeding expectations can only be a good thing!
CaFE integrates easily with your clients’ Xero accounting software to provide reports and proactive alerts on their cashflow position. You can become a CaFE partner by clicking here.