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Forecasting the financial future

Why cashflow is a key value-add service for your accounting firm

Value-add services are becoming a vital offering for accountants, with many firms moving away from the offering pure compliance and switching to a more hands-on business performance and advisory role with their clients – with cashflow advice central to these value-add services.

We sat down with Darren Glanville, Head of Operations at Valued Accountancy, to find out how advice on financial performance, cashflow forecasting and enhanced software processes are all key to Valued’s conversations with their business clients.


The Valued approach to accounting services

Valued Accountancy is one of the UK’s leading Xero practices, providing their brand of custom accounting and business support services to a portfolio of over 700 clients. And a key element in their approach is the use of cutting-edge technology, as Darren explains:

“We’re slightly different to the traditional firm here at Valued because we have the software solutions side of the practice. So we talk to businesses about how to implement software – and not just accounting software but also a lot business applications as well.”

This helps the practice to make use of the growing ecosystem of Xero apps to provide tailored software solutions for their clients – whether it’s Receipt Bank to automate the bookkeeping tasks, GoCardless to automate payment or a debtor tracking and cashflow app like Fluidly to help give the best possible cashflow advice to clients.


The evolving meaning of ‘advisory services’

The new breed of tech-savvy business owners want more from their accountant – and they expect advice that improves their finance performance across all areas of the business.

This trend for advisory services is continuing to grow, in line with the changing expectations that modern business owners have of their accountant. But, as Darren points out, there’s still considerable debate over what actually constitutes ‘advisory’ in the accounting sector:

“To a degree, advisory is becoming a bit of a cliched term in accounting. And it’s still unclear what that term means. What is advisory? If you ask 5 different accountants, you’ll get 5 different answers, ranging from advice on online invoicing software through to full-on strategic planning.”

“Most people in that advisory space are focused on the ‘lag indicators’ at the moment, where you’re looking for patterns and trends in past data. No-one’s really focusing on the lead indicators that show you those projected future KPIs and numbers. This is where the landscape needs to change, so firms are focusing on those lead indicators and become more forward-looking – if you do that, you’re in a much better position to help your clients.”


Cashflow as a key challenge for your clients

Helping SME clients understand the importance of cashflow is key to your value-add approach – and Darren believes forecasting, projections and lead indicator KPIs are central to this.

“We believe every client should have some form of cashflow forecast or budget. At the very least, you need to be setting up a budget for the next 12 months. How can we, as your accountant and adviser, keep you on trajectory if we don’t know where you want to hit and what those cash targets look like?”

“There’s an education angle too. Some people don’t really understand the importance of cashflow and they’ll just start trading and see how things go. Other people know exactly what they want, whether that’s selling in five years or doubling their turnover in two years. So you need that budget and that view of the cashflow to check you’re going to hit that.”


How tech frees up your time as an adviser

Automation within your accounting and fintech apps is creating huge efficiencies. Processes that were once manual are now automatically taken care of by the software, and that creates more time for client-facing activities, as Darren explains:

“Clients are doing more of the bookkeeping themselves, because they have access to their bank statements through a live bank feed and have apps like Receipt Bank automating the actual data entry. And they’re finding it really interesting to have all this information around how the business is performing month-on-month.”

“We can get a business on to Xero and give them a high-level health check. Then we can show them how their performance is looking and how they performed over the past three months, and get those lead indicators in place so we can see how they’re going to get to those big goals.”


Technology as a facilitator to greater value

There’s a prevailing misconception that technology is a threat – with software delivering all the future value in accounting. But, in reality, it’s the human side, your own experience as an adviser and your relationships that truly make the difference for your clients.

For Darren, the software adds efficiency, but it’s never going to replace a good accountant:

“The technology is a facilitator – it’s a conduit to your own advice and guidance. If you give someone a reporting app and don’t give them any advice, it’s not going to help them. At some point you’re going to need to pick up the phone and start building a relationship with your client.”

“One of the things we’ve been talking to our clients about is outsourcing some of the finance elements. So you can now look at offering things like an outsourced credit control function, or managing their bookkeeping function etc. As a business, that gives them back more time, and means you can add that extra value as the accountant.”


Setting the foundations for value-add services

The rise of value-add services will undoubtedly continue to grow over time – and if you want your practice to benefit from this, you need to have the right software foundations in place.

For Valued, that means getting the systems, processes and onboarding of a new client set up properly right from the outset of the engagement:

“When we onboard a new client, we have a very defined process that we go through to get the main elements in place – taking them through from prospect to advocate. So we’ll have a client call, then client onboarding and we’ll invite the client into Asana for the project management side so they can see the steps we’re going through.”

“From a software product perspective, our preference would be to set clients up with a core system of Xero as the core accounts package, with Receipt Bank handling the bookkeeping and Fluidly covering AI-powered Intelligent Cashflow forecasting, debtor tracking, and cash reporting.”


How Fluidly helps you add value

Fluidly’s smart cashflow engine brings you the debtor-tracking features and cashflow forecasting tools you need to offer real value-add services for your business clients.

Help business owners to get in control of their aged debt, operational cash and projected cash pipelines, and position your firm as an invaluable part of their finance and leadership teams.

Find out how Fluidly makes cashflow management simple.

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