If your clients are causing you frustration, you aren’t alone!
Picture this: Your client is a manufacturer. There is great demand for your client’s product, they’ve hired the right staff, and competition is slim. Business should be booming right? Yet your client is struggling. Why?
Accounting software company, Intuit, surveyed 500 accountants and bookkeepers, asking what their biggest problems were in their SME business. The top three responses were:
- Lack of proper record-keeping, including the mixing of personal and business expenses.
- Not using accounting software.
- Not understanding the importance of cash flow; Not keeping track of bills and debts.
This reflects what we as insolvency practitioners see every day.
Cash flow is key to any business and while cash pays the bills, many business owners are unable to produce a cash-flow statement, which records incoming and outgoing cash amounts to assist them to manage the budget of those bills.
Key takeaways all advisors should give their clients
Effective accounting systems provide valuable information needed to make decisions. Spend the time setting them up and talk to an expert about the best products and systems to use for your business.
Be aware of the insolvency indicators. These allow you to better understand your business and identify earlier in a business slow period, any need to reduce expenditure.
Use strong cash flow management disciplines in your business. These will better help you to weather any bad period and in good times, help you to build any reserves needed in future tough times. A good strategy is to invest those monies in assets you can easily convert into cash rather than spending excessively on lifestyle items like expensive cars and holidays.
Identify the key stakeholders in your business. They may be your customers, or a key supplier or the financier. Once identified, proactively manage those relationships through effective communication.
If you’d like help speaking with any of your clients who may be in trouble, please contact your local Worrells office. Our partners are happy to have a complimentary and confidential discussion.