How accountants can alleviate the small business cash flow crisis

Man office looking out window
By Xero

4 December 2018

Healthy cash flow is key to the success of small businesses the world over, say accountancy software experts Xero.

As all accountants know, businesses risk failure if they can’t pay suppliers or staff on time. According to Xero’s Small Business Insights, just over half of UK small businesses were cash flow positive as of September 2018. This leaves hundreds of thousands of businesses needing help to get their cash flow on track so they can reach their goals, whatever they may be.

While cash flow is troubling for many businesses, the issue presents a unique opportunity for the accountancy profession. Digitally savvy practitioners are grabbing hold of new technology to streamline simple bookkeeping and compliance tasks.

Online accounting also provides a real time view of client cash flow. By learning more about clients’ businesses, firms can provide a more human centric service to clients, including advice on cash flow. In turn giving clients the ability to achieve their personal and business aspirations.

Taking accountancy to the next level

Thousands of UK firms are leveraging online accounting platforms to provide cash flow advisory services. They have software like Xero at the core, bolting on automated bill and expense data capture tools such as Hubdoc, Receipt Bank and Xero Expenses. With these, advisors can ensure clients have up to date and accurate data.

And many are then taking their services beyond compliance to advisory services. This includes the likes of those in the top 10 such as BDO, all the way through to small accountancies such as the small, tech-savvy London based firm Raedan. These practices are using cash flow forecasting and reporting apps such as Fluidly, Float, Spotlight and FUTRLI to take their service to the next level.

The new models of accounting

What we once knew as accountancy is changing rapidly. Whether it’s a simple advisory model, offering forecasting, budgeting and business planning services with the help of additional apps. Or a more complex approach bringing in services such as capital-raising expertise, virtual CFO services or succession planning. One thing’s for sure, accountancy will look markedly different in five, even 10 years’ time.

Jonathan Bareham, founder of Raedan, says business owners don’t want accounts, tax returns or lists of data. “They have human aspirations. They start a business because they want to do something they love, or they want more spare time,” he says. “And so our job isn’t just to provide the accounts; that’s a by-product.”

Jonathan sees the new role of an accountant to help business owners realise what it is they really want. And using technology to enable that. Without healthy cash flow, business owners can’t achieve their goals, whether they’re business or personal.

“You use the technology to do the admin and automation,” Jonathan says. “And then you have the time to sit down and advise your clients. Most of the questions we get from clients are things like ‘Have I got enough money?’, ‘Will I have enough to pay my tax bill?’. Sometimes the question is the most down to earth one: ‘Do you think I’m doing a good job?’ That’s what business owners really care about and that’s what we’re trying to help them achieve.”


Take the next step with online accounting

If you want to get started with online accounting and cash flow advisory for your clients, sign up to the Xero partner programme at www.xero.com/partners. You’ll gain access to benefits such as free tools, resources and a dedicated account manager to help you tackle your firm’s digital strategy.

Contact Xero

And if you’re already a Xero partner, speak to your account manager or email partnerteam@xero.com for help taking your practice to the next level.


This blog is one of a series of articles from our commercial partners.
The views expressed are those of the author and not necessarily those of ICAS.

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