If you’re an accountant who serves small to medium-sized enterprises (SMEs), why should you consider providing cash flow consulting as part of your value-added services?
If like us, you’re dedicated to giving businesses the tools they need to forecast cash flow and strengthen their long-term financial health, here are 10 reasons why you should offer cash flow consulting:
Most businesses are small businesses
Globally, there are more small businesses than any other kind of business. Consider these numbers: 99.9% of all US businesses, 97.9% of Canadian businesses and 99% of all businesses in the world are small businesses.
Most accounting firms are also small businesses. For example, 90% of all accounting firms in the United States have less than 10 partners or owners.
Accountants are trusted advisors
Like attracts like. If you’re a small business looking for a professional accountant, are you going to go knocking at the door of a major accounting firm with retainer fees as high as the skyscrapers that house their employees?
Or, are you going to look for a small to medium-sized accounting practice (SMP) that’s more reasonably priced and more likely to understand your needs?
The answer is obvious. It is also why most small businesses consider their accountant their most trusted advisor.
- A majority (92.2%) of accountants provide basic accounting and bookkeeping services.
- Only 77.7% offer business consulting services, like cash flow analysis and forecasting.
Offering cash flow consulting will give you an edge on the competition. At the same time, it will also help you forge stronger bonds with your clients.
Cash flow is a small business killer
More than half of small businesses never make it past the first five years. The main culprit is cash flow.
- Studies of the U.S. market conducted by Wasp Barcode have found that 33% of small businesses said cash flow was a top business challenge and 44% found cash flow a top accounting challenge.
- A similar SCORE study indicated that 22% of small businesses said that cash flow was their main concern.
It’s not that these businesses don’t understand that they need to have the right amount of money to meet their financial obligations. Instead, they just don’t have the correct tools, technologies and processes in place.
By helping your clients master cash flow management, you’ll be teaching them vital survival skills. You’ll also be building mutually respectful long-term relationships.
There are intuitive forecasting tools
You don’t have to go and design proprietary systems to create a powerful and meaningful cash flow analysis. Automated tools, like our cash flow forecasting, make it simple to create an informative, intuitive report filled with key ratios, charts and graphs.
All you have to do is connect the business’ QuickBooks Online account with PayPie, then run the report. The forecast is built using near-real-time data from the company’s QBO account. (Integrations with other accounting software and platforms are coming soon.)
Technology is changing everything
“CPAs with technology: You have the power to change your customers’ lives.”
— Jody Padar, CPA, MST, Accounting Today
With the rise of cloud-based technology, these three trends are changing how small business accountants are interacting with their clients:
- Digitalization— As more small business data is available digitally, through the use of accounting software and applications, it’s also easier for accountants and bookkeepers to access this information.
- Virtualization — Because cloud-based technologies can be accessed from any device with an internet connection, it’s no longer necessary for accountants to physically visit clients. Accountants and businesses can work together from virtually anywhere.
- Transformation — With the greater availability of near-real-time data, accountants are moving from generalized to specialized services.
Cash flow consulting builds value
“The ability to provide business intelligence from a quick analysis of data is a miracle.”
— Geoffrey Moore, technology author and business consultant
Complying with regulations and paying taxes are services that business owners see as have-to-dos. Accountants who take the creation of financial statements one step further by producing cash flow forecasts are transforming routine tasks into recurring, value-added services.
Rather than merely reporting results, cash flow consulting is a key component in business growth. Some advisors even set up monthly consultation calls or video conferences with their clients to discuss goals and objectives — literally becoming voices in the business decision-making process.
Business financing goes hand-in-hand with cash flow consulting
As you help businesses better understand when, why and how the cash flows in and out of their companies, your clients may also rely on your advice for short-term and alternative lending solutions.
In addition to standard options, like term loans, lines of credit and credit cards, you can also introduce the businesses you serve to innovative financing solutions, like invoice factoring, powered by blockchain technology.
Better cash flow lowers risk
The cash flow forecasts created using PayPie’s insights and analysis also contains a risk score that summarizes and reflects several key variables linked to cash flow. This indicator shows how a business is viewed by lenders, vendors and other third parties wishing to do business with them.
Helping a business improve their cash flow also improves their risk score. With a better risk profile, businesses can access funding more easily and set more favorable terms with vendors.
Better cash flow builds confidence
As you work with your clients reviewing cash flow, setting goals, controlling costs and planning for future investments and opportunities —you’re not only improving the business’ financial health, you’re also bolstering the owner’s confidence.
As you go through a cash flow forecast, especially the day-to-day costs involved in operational cash flow, you get a better sense of where the client’s priorities lie, which concepts they understand the most and the areas that need the most improvement.
In a nutshell, you’re able to ask the hard questions and offer informed solutions that truly benefit the bottom line.
Cash flow consulting makes you a better advocate
“Running a small business is about the grind, the day-to-day operations and finding a way to keep your head above water. Like the shock of cold water in the ice-bucket challenge, reality can hit you hard and all of those hours picking paint colors for the office suddenly seem wasted. Small businesses inherently overlook the technology platforms that help them manage their day to day — and that’s exactly how cash flow begins to erode.”
— Stacy Gentile, Forbes Communication Council
Managing finances isn’t always the most alluring part of owning a business, but it’s fundamental for success. Cash flow consulting takes the implementation of best practices and better tools to a new level by delivering tangible results in the form of more cash. And no one can dispute the value of money in the bank.
Be a cash flow advocate — try our cash flow forecasting for QBO users today.
PayPie currently integrates with QuickBooks Online. Additional integrations are coming soon.
This article is informational only. It does not replace the expertise that comes from working with an accountant, bookkeeper or financial professional.
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