Rolling out cashflow forecasting support

Although more and more accounting firms are offering business advice, only 46 per cent of accountants are regularly having strategic conversations with clients. And even for practices who have branched out into offering more support, the reality is that most are early on in terms of deployment.

So, what tactics can you use to break through? Fortunately, with cashflow in particular, there are powerful conversation starters you can use. Clients will rarely come to you to ask for a forecast specifically, but if you take a proactive interest in their business, it can make a very strong impression.

Talk to your clients

The first step is talking more with your clients – simple as that may sound. Cashflow advice often starts with fact-finding around your client’s financial situation, so make the most of your existing meetings, initiate more face-to-face time together and get to know what makes them and their business tick.

Of course, getting your client in the room can be a challenge in itself, as is getting hold of the financial information you need to provide valuable support. To get your foot in the door, there’s nothing wrong with presenting a basic forecast in the first instance, based on the historical data you do have – and using this a way to underline the value of forecasting.

Bring cashflow to life

Providing something visual, like a cashflow forecast built using a tool like Fluidly, is crucial here. It helps put the numbers into perspective. From there, you can move into making a more sophisticated plan together, based on deeper discussion and the additional information you uncover during your conversations.

Most business owners don’t have the bandwidth to properly monitor their cash inflows and outflows. When they’re in the depths of cash distress, struggling to keep their head above water, they’re crying out for control and certainty. Demonstrating how your client can make a plan to get back on track is transformative, and the ideal way to kickstart a consultative project.

Stable businesses relish the opportunity to look further ahead too. Just as a forecast can give a floundering company assurance, it also affords more room for financial decision-making, which is crucial for a business as it grows and expands.

From conversation to delivery

Although not every meeting will generate an opportunity to offer additional services, there are other ways to make advisory conversations emerge more naturally. For instance, it pays to have additional data to hand when you speak to your client, and a list of questions you plan to ask, along with an initial forecast based on the existing information you have.

Use face-to-face time with your client to build a profile of their business and understand their goals. This could be part of a recurring meeting, like a quarterly review, or a standalone meeting dedicated to running through the client’s current business challenges.

Whatever approach you choose to take, it’s important to build an understanding of how your client’s objectives compare with the money coming in and out of their business.

Asking questions about cash in and cash out can be enormously useful at uncovering systemic issues; problems that may well have a solution that you can implement there and then, which will generate results quickly. Consider lines of questioning like:

  • What proportion of your customers pay on time?
  • How often do late payments impact your business decisions?
  • When do you typically pay your suppliers?
  • How do you deal with peaks and troughs in your cashflow?
  • How well can you predict your costs over the next three months?
  • Do you know your cash runway for the business?

Once you know the parameters of your client’s cashflow situation, you’re better able to compare expectations with reality, uncover issues and bring about the stability they’re looking for.

Get the basics right

With cashflow forecasting, it’s easier to work with clients who have got the basics in place, namely clean, accurate financial data, hooked up to a reliable cloud accounting tool. But either way, there’s an opportunity – if your clients’ records aren’t in good order, use this as a way in to offer bookkeeping support.

What’s more, if your clients are already using technology to automate some of their financial processes, such as receipt scanning, it’s a good indicator that they’d be open to more app-related services, like tech-enabled cashflow forecasting.

There’s a wide array of opportunities to provide business support out there. Cashflow issues – and the living, breathing problems business owners face – are often just below the surface. By creating the conditions to reveal them, a trusted advisor can make a huge impact.

Like wearing a suit and tie to work, the stereotype of the head-down, overly methodical accountant is on its way out. Instead, it’s the accountants who know how to listen and investigate, who are proactive and plan meticulously, that break into the world of business advice.

There’s no shortage of clients in need of support – as a firm, you just need to make the first move and start talking cashflow in practical, meaningful way.