This episode of Credit Pearls is with Edel Hayes from Accelerate Accounting chatting about the importance of picking the correct accountant and how having the right financial professionals in your business can help you grow your business.
I see that there are so many small businesses out there that aren’t getting the support they really need from their accounting or financial professionals. They think, “I’m not big enough to ask for help!” or they see their accountant once at the end of the year. Really you need something more frequent than that. You need support, whether it’s outsourcing something like the credit control or bookkeeping, or having quarterly check in points with your financial professionals. I think that the traditional relationship between the accountant and the business owner needs to change.
A lot of people are afraid to admit that they don’t really understand the financial side of their business, but it’s a huge and very important part of the business. I think that looking at for the first time at the end of the year is too late. But if you have somebody to support your business throughout the year they can spot something that business owner won’t necessarily spot and enables you to put plans in place.
What COVID did was really test businesses, their systems and tested how truly their businesses were. Businesses that I didn’t expect to fail, failed during COVID. One of those reasons was they didn’t have reserves of cash built up or didn’t have buffers in place. Some smaller businesses that, from out the outside did not look as strong, did well because they had been slowly building up cash reserves in the background.
This is where I really think cashflow forecasting and having an expert in your business to advise you on this, can really help businesses grow. It is also very important to ensure that you have a tight hold on money coming back into the business. I see a huge number, of customers and companies that have a large amount outstanding debt. They don’t have enough cash in the business. They take out loans, they regularly tap into their overdraft facility. This costs money, anywhere between 8% and 10%. And really, if they had somebody in their business to help them manage that cash flow, and to collect money in a timely manner, it would really help businesses, especially when they hit difficult times.
Making some small changes to how you do things can make such a difference. For instance, having the link on your invoice, so that customers can click and pay that’s really, really helpful. The easier it is for your customers to pay you the better for you!
