Ask yourself – what did your firm do this past financial year to help your SME clients navigate the future?
The answer could well determine the future of your business.
Many accountancy firms are conservative and like to work in the past – the past 12 months that is.
They churn out the same old compliance forms for their clients year after year, hoping things will never change and praying their little gold mine will last for ever.
All many of them do is to review what has already happened in their client’s business for the previous year. It’s as though they’re observers of history, not innovators.
No wonder their staff get frustrated.
Accountants servicing SME markets need to become “financial storytellers.”
Why?
Because many SME clients are babes in the woods. They need a storyteller to show them what the long-term results could be of the decisions they’re making today.
The “storyteller role” is no different to what happens in larger businesses, which have a Chief Financial Officer (CFO) on staff.
CFOs are generally very experienced accountants, who are privy to just about everything that’s happening within the business,
Drawing on that experience, a CFO can analyse the business’ current performance and project what is most likely to happen in the future. A good CFO can accurately project a company’s likely position out to 5 years, but in some companies, they go even further.
Your SME clients need more than the standard package:
- An annual set of accounts with a “consolidated profit and loss account,” but no breakdown of individual business units so they can see where improvements need to be made.
- A balance sheet that satisfies professional bodies and regulatory authorities, but doesn’t give the client any real understanding of their financial position.
- Taxation return.
- Tax payment summary.
In all honesty, how does this type of reporting help your clients to adequately plan and run their business operations?
SME clients are making hundreds, and in some cases, thousands of decisions each year relating to how they’re operating their business. These are decisions that affect not just what happens today, but what will happen in the future.
These decisions are often taking into consideration:
- Capital Expenditure;
- Expansion/Acquisitions;
- R&D;
- Team Recruitment And Training
- Exporting
- Technology Upgrades; And
- Level Of Investment In Stock And Debtors.
Sometimes, they may have to look at raising capital and this immediately brings in question “what’s the value of the business?” It’s not something that a layman can easily work out. If a company is going to issue shares for capital-raising, they’ve got to know how much their shares are worth to determine how many they’ll need to allocate.
If they’re seeking additional loan funds, they’ll also need to know if their business has spare assets that can be offered as security.
If your accounting firm fits in that “conservative” mould, you may never have given any thought to those issues that confront many of your SME clients throughout the year. It’s why some of them have trouble sleeping as they wrestle each night with these ongoing problems. Often, they’re filled with doubt. Some are led to wonder whether it’s all going to be worthwhile or are they making a massive mistake. For many of them, business problems are a gigantic black hole!
Your role as the “financial storyteller” will help your SME clients to understand the impact, risks and potential benefits of their decisions. They need to know what the decisions they make today may look like in five years’ time.
Wouldn’t you like to be able to sit down and talk to your SME clients and say to them that you could offer them a “financial storyteller” role by becoming their virtual CFO? Most small and medium sized businesses can’t afford a full time CFO, but many would love to be able to rely on your experience as a sounding-board for their decision-making.
We all know that changes occur in business every day – some come right out of left field.
High inflation hits – interest rates take off – supply chain issues – business results fail to meet expectations. Despite all this, if your SME client has a plan that you have thoroughly researched and diligently prepared, they’ll be in a far better position to respond quickly and confidently, than they’d be able to do without your assistance as their “financial storyteller.”
The ESS BIZTOOLS’ Financial Forecasting Product Package will assist you to deliver “three-way financial model” projections that the Banks now require for:
- Budgets – key drivers and individual Budget Forecasts
- Cash Flow Forecasts
- Projected Balance Sheets
Interested in finding out how your firm could start the delivery of these types of “real accounting services” to your clients?
Why not visit http://www.essbiztools.com.au/and review our material or call 1800 232 088 to make an appointment for a no-obligation Zoom meeting? As a highly-experienced accountant himself, our Managing Director Peter Towers will help you determine the best course for your firm to follow.
Peter Towers | Managing Director | ESS BIZTOOLS Pty Ltd | peter@essbiztools.com.au
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