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?
The importance of cash flow in the financial well-being of SMEs cannot be overstated, and offering guidance in this critical area can position accountants as invaluable partners in their client’s success. This proactive approach goes beyond traditional accounting services, demonstrating a commitment to not just managing finances but actively contributing to the long-term financial health and growth of SMEs.
Nine reasons accountants should assist with cash flow
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 nine reasons why you should offer cash flow consulting.
Most businesses are small businesses
Assisting small businesses with cash flow is not just a service; it’s a strategic imperative given that the vast majority of businesses, approximately 99.9% in the United States, fall into the small business category. With over 33 million small businesses in the United States alone, accountants can make a big impact.
Offering cash flow consulting provides essential financial tools for these businesses to plan and manage their money effectively, promoting their long-term financial well-being. This support not only aids decision-making but also builds lasting partnerships, making accountants valuable contributors to the success and stability of small businesses in a competitive market.
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. Offering cash flow consulting will give you an edge over the competition. At the same time, it will also help you forge stronger bonds with your clients.
Cash flow’s impact on small businesses
More than half of small businesses never make it past the first five years. The main culprit is cash flow. 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. Instead, they continue to face cash flow problems.
By helping your clients understand cash flow management strategies, you’ll be teaching them vital survival skills. You’ll also be building mutually respectful long-term relationships.
Utilizing 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 Forwardly’s free rolling cash flow forecasting, make it simple to analyse your cash flow position ahead of time; before financial gaps happen.
All you have to do is connect the business’ QuickBooks Online or Xero account with Forwardly, then run the reportvisit the dashboard and cash flow area to see a financial overview. The forecast is built using near-real-time data from the company’s QBO account.
Tech’s transformative role in accounting
In 2022, 35% of US small and medium-sized businesses considered adopting fintech for improved financial operations. The fintech market, doubling since 2019, reached a $550 billion market capitalization. To thrive in 2024, accountants and businesses should embrace tech trends like cloud-based accounting for efficiency, cash flow forecasting, robotic process automation (RPA) for streamlined processes, AI integration for improved productivity, and instant payment technology. The adoption of these technologies is crucial for staying competitive and becoming successful. These innovations shape the future of accounting and finance, enhancing career opportunities and expertise.
Building value via cash flow consulting
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 and 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, business lines of credit and credit cards, you can also introduce the businesses you serve to innovative financing solutions, like invoice factoring and invoice financing.
Lowering risk with improved cash flow
The cash flow forecasts and analysis also contain 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 its cash flow also improves its risk score. With a better risk profile, businesses can access funding more easily and set more favourable terms with vendors.
Confidence through effective cash flow
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’s financial health, but 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 with Forwardly
Integrating cash flow consulting into your accounting services for SMBs is a strategic move that positions you as a crucial partner in your clients’ success. Whether utilizing intuitive forecasting tools or embracing transformative technologies like fintech, cash flow consulting becomes a catalyst for business growth, risk reduction, and heightened confidence.
For an easy solution, try Forwardly’s cash flow forecasting tool, which forecasts up to a year and seamlessly connects with QuickBooks Online and Xero. Improve your services and contribute to the lasting financial health of your clients.