Accountants have always been undervalued in business, particularly in SMEs, where many directors see them as an expensive overhead.
Why You Need a Strong Accountant During the Coronavirus Pandemic During the current crisis when cash is going to be tight for many businesses, there may be a temptation to cut back on accounting costs—in most cases, this is a mistake.
About the author: Mark Halstead is a director at Red Flag Alert, a business intelligence solution that provides real-time business intelligence on every UK business. LINK
The government support package for businesses has multiple strands, so it can be challenging to understand the best schemes and process the application. A good accountant will know their way around the different options and be able to advise on the best choice.
A good accountant doesn’t just keep score—they help you plan for the future. The correlation between detailed financial planning and commercial success is clear: companies that understand their financial position and the key drivers for success outperform peers.
Budgeting not only shows a clear path to success, but it also focuses the mind of the key decision-makers. With a good plan, every decision can be weighed against the financial implications. During the COVID-19 pandemic, this is even more important. However, many directors are panicking and envisioning a worst-case scenario. A clear financial plan not only alleviates fears but helps leaders think about solutions, too.
A good accountant can help you review which schemes might be relevant for your business.
One of the key reasons for businesses failing is poor financial management; too many businesses don’t have a clear view of their financial position and have no plan for the future. Many are living day-to-day and month-to-month from a current account, praying they don’t run out of cash.
Many companies are plodding along like zombies, just about servicing the interest on the debt but unable to pay debts down. Because these companies are operating on a knife-edge, they don’t have the resources to survive a drop in revenue.
An accountant is critical in helping insulate businesses from the coming shocks; however, some companies may be beyond saving. A good accountant can help directors decide on the best way forward and develop processes to execute the plan.
As with any external event, some businesses will struggle and others will see an opportunity. COVID-19 is no exception. For example, Edtech companies that have found it painfully slow to get traction in schools are all of a sudden in demand.
Accountants can help with evaluating growth opportunities, developing plans, and ensuring capital is in place. They also have the experience of seeing hundreds of different businesses, so they will be well placed to offer commercial advice.