For small business owners to have the greatest chance of growing their companies with exposure to the least possible risk, they need the services of an advisory accountant.

Similar in many ways to a part-time financial director or non-executive director but without a position on the board, an advisory accountant’s role is to help an owner and the senior management team navigate the obstacles and exploit the opportunities presented on their journey to their target destination.

Unlike a part-time financial director or a NED however, an advisory accountant is also responsible for the provision of their client’s accounting services.

You’re responsible for the financial recordkeeping of the business and you’re also responsible for dispensing advice based upon the information and insights contained within the financial records.

There is significant fee earning potential as an advisory accountant and, as your role develops, you can share some of the responsibilities with other staff within your practice – an ideal training and development opportunity for your junior accountants.

Over time, your practice may well become known as the practice whose team has a proven track record of helping its clients to achieve the goals they set for their business.

With this reputation, the chances of our practice landing larger, higher-paying, and wider-ranging accounts from ambitious and well-funded companies increase.

Who needs an advisory accountant?

The clients who need an advisory accountant the most are those clients who feel that their businesses:

• are currently treading water,
• are in a downward spiral,
• are benefiting from increasing turnover but this is not translating into enough additional profit,
• should be more efficient than they are now,
• are profitable but which can’t generate enough free cash flow to expand, or
• have gone far enough under them and they wish to exit.

Every client is different and you should use your knowledge of your existing clients to determine which ones are most likely to benefit from advisory accountant services.

The best way to win this work is to be in regular face to face or telephone contact with clients where you have full, in-depth conversations during which you can explore clients’ real feelings on their businesses and the progress they feel they’re making or failing to make.

Am I qualified to become an advisory accountant?

Yes – absolutely.

We understand why even many experienced accountants initially baulk at the idea of adding an advisory capacity to their roles other than lack of time.

Perhaps the most significant reason for this reticence is the feeling that they are not good enough businesspeople than they are because their client’s turnover is higher, sometimes much higher.

This reluctance is understandable, of course, but ultimately misplaced.

You too are a businessperson and you share many of the same challenges as your clients.

Like them, you need to make sure that you price your services correctly, you make the highest possible margin on your work, you have the money to meet your obligations when they’re due, and more.

You have a much deeper understanding of financial performance than your clients and you’re able to perceive in a way your client can’t what is working well and what is not working well from a spreadsheet.

For a £1,000,000 per annum turnover business, your ability to shave 2-5% from their fixed and variable costs would make a significant difference to their level of profitability, the amount of cash they have in the bank, and their attractiveness as a takeover proposition.

Your clients may not have the ability to first interrogate a spreadsheet to see potential cost efficiencies let alone know how to exploit them.

Never underestimate your own business and financial acumen – after all, your clients have already seen this in you and signed up to your services as a result.

What sort of services would I be expected to provide?

Advisory accountants offer four main types of value added services to clients and they are as follows:

1. Financial

Using historical financial performance figures, you can look for efficiencies or savings from your clients’ different cost centres.

We all know that, as long as the cash in the bank is rising quarter to quarter in a company’s account, senior decision makers within businesses often de-emphasis ongoing forensic examination of outgoings until there is a fall in sales.

An advisory accountant can set budgets for each department or for the purchase of raw materials, goods, and services required when a sale is made.

Allied to these savings, an advisory accountant can also produce turnover and profitability forecasts against which the owner and senior management team can measure their performance.

Within the B2B sector, late payment is rife and an advisory accountant can assist with improving credit control and cash flow planning.

2. Process

How much does it cost to generate a lead or a sale? Which members of staff are involved in the marketing, sales, and fulfilment process? How are after-sales complaints handled and are there failures in that system which lead to refunds and client dissatisfaction?

Process advisory accounting examines the labour and the assets involved in the everyday functioning of a company with a view to assessing whether:

• certain processes can be streamlined to create extra profit and
• additional investment is needed in other parts of the business to prevent undesired outcomes.

You clearly define each task within a business which needs to be carried out and how many people are needed for this function. You then examine how each task relates to the adjoining task to ensure that mistakes are not made when servicing a client before, during, or after the sale.

This clarity in job function allows staff to know better what they’re doing and for management to better identify which processes are going wrong and who’s responsible for it.

Often when a business grows very rapidly, the owner and senior management don’t change the internal infrastructure quickly or effectively enough creating extra costs and bottlenecks in production and fulfilment.

When a company is operating at or near peak efficiency, costly mistakes are greatly reduced and senior management have much more time available to plan the future of the business.

3. Compliance and forensic

Again, when a company expands, its ability to achieve timely and accurate financial compliance is put under severe strain as the owner and senior management are occupied with handling the business’s inevitable growing pains.

Compliance advisory accounting involves planning and implementing a system for use by your client’s employees and your staff ensuring that all necessary regulation is adhered to and that adherence can be checked instantly if necessary.

Forensic accounting is particularly useful in businesses prone to theft and fraud from both employees and customers.

4. Successor

Succession planning is a complicated area of accounting concerned with the future handover of ownership of a company to other family members or to a purchaser.

The companies most likely to succeed when ownership is transferred (and therefore be more valuable) are companies which do not rely on its shareholding directors to function profitably. In fact, the further the shareholding directors are from the day to day running of the business, the better.

With succession planning, you and the current shareholders identify the areas of business which are the most important and you then identify what skills the person responsible for each area will need to have.

Over time, particularly prior to a company being listed for sale, you and the owner of the business then ready the company’s employees to make it as attractive as possible for a prospective purchaser in addition to preparing and constantly update the library of paperwork needed for due diligence.

Creating time in your practice to offer advisory accounting services

The income opportunities offered to your practice by offering advisory accounting services are impressive.

As well as broadening the fee base of your practice, you also have the opportunity to delegate some of the tasks to junior and senior members of your staff taking the pressure away from you.

Morale is particularly low among many staff working for accounting firms with 42% saying that they were unhappy because of a lack of opportunities for development.

Accounting has meaning and we all look for the meaning in what we do.

Advisory accounting offers staff members, particularly eager junior accountants, additional variety and excitement – a feeling that they’re part of something bigger and more important.

Having the right advisory accounting team makes not only a significant difference to the client but it makes a significant difference to the wider UK economy.

How do you create the time to offer these services given that time and space is at such a premium within most small accounting firms?

Welcome to Hindsight, the new Xero plug-in designed to constantly monitor clients’ business and financial performances using a set of generic and client-specific flags indicating potential threats and opportunities.

With Hindsight, you delegate certain clients or certain areas of responsibility to members of your team.

Hindsight logs into each client’s account every day and, whenever a flag appears, it tells the team member responsible:

• what each flag means in both a financial and a business sense,
• how to overcome the issue or exploit the opportunity, and
• how to interact with the client and deliver value to the client.

We all know that standard accounting is a process – a routine governed by constantly updated numbers on a complex spreadsheet. Hindsight frees up time by automating these process, allocating tasks, and training staff with responsibility for these tasks on how to react.

With Hindsight, you can not only increase the quality of the service you offer to your standard clients but you can also build a motivated and engaged team with the confidence and the knowledge to run the practice when you’re visiting the clients.

For more information on the Hindsight plug-in, please click here. Alternatively, book a call with us by clicking here or click here to email us. 

According to the CMA, research shows that owner-managers of SMEs expect, apart from routine compliance services, advice on many broad and specific aspects of their business and these include among others: 

• financial planning,  
• management accounting and information system,  
• forensic accounting,  
• cost reduction,
• succession planning, and
• pricing decisions 

Given that the average price per month for limited company accounts is between £40 and £250 a month, you could successfully argue that owner-managers of SMEs are expecting a lot for their money. 

However, this is reminiscent of a general truth between accountants and their clients – miscommunication and misunderstanding. 

What your clients actually want is different from what you’re offering them. 

This is understandable in many ways. The accounting sector and the companies within it have been subject to severe downward price pressure over the past decade. 

It’s become a race to the bottom. Where the only clear differentiation between accountants is price, then both you and your clients lose. 

The base of any accountancy practice’s services is founded on compliance – making sure that your clients submit their tax returns on time and that those returns are an accurate reflection of the financial transactions they reflect. 

But this should only be the base of what you offer because, if it is, there’s not much room to add value and increase prices. 

Did you know that only 1 in 25 clients believe that advice on tax (a compliance issue) is the most important thing they want from an accountant? 

Nearly two thirds want to receive support on commercial strategy, budgeting, and general business advice from their accountants. These are consultative services where you can add value to your proposition. 

As only one in five accounting clients think price is of particular importance, you should spend your time and marketing budget on finding the four in five who want the additional support identified by the CMA. 

What help do SMEs need other than compliance help?

The number of companies in the UK in almost every sector has climbed substantially in the last twenty years meaning that there’s more competition for custom than ever before. Added to that standard competition is extra competition from freelancers, contractors, and “side hustlers”. 

This, coupled with a borderline deflationary environment for the last 12 years, means that, year on year, SMEs need to sell more products at lower profit margins to maintain turnover levels. 

SMEs face constantly rising input costs – minimum wage and the knock-on effect that has on higher-paid staff, rent, rates, and supplies (especially if they are imported). 

They also face increased competition for staff at all levels meaning that they often can’t get the employees they need and they therefore have to lean heavily on support from owner-directors and senior management. 

And this is before we have factored in the effects of financial, market-based, and industry regulation. 

SMEs have to do a lot more than they did a decade ago with less cash and fewer staff and infrastructure resources. 

What is management accounting?

Running an SME without outside help is like trying to fix the brakes on a car when it is still in motion. 

Whether an owner-director is trying to realise more profit from the same level of turnover or they’re seeking to generate enough cash flow to expand their company, they need better information to work from to have the best chance of doing so. 

At the moment, owner-directors don’t have the time and, in many cases, the ability to analyse their financial records to look for clues on how they can achieve their short- and long-term commercial goals. 

Management accounting allows owner-directors to understand the impact of technology, operational structure, risk, debt, capital, profitability, cash flow, and competition on their businesses. 

Accurate, up-to-date, and comprehensive financial information and expert analysis thereof is the key to unlocking further value and growth opportunities within a business. 

The better the information and the analysis available to an owner-director and their management team, the more likely the correct decisions will be made. 

As your client’s management accountant, you’ll prepare reports about the way their business is operating to help in the making if both short-term and long-term decisions. 

These reports help a business to: 

• identify and measure key metrics and 
• analyse the underlying assumptions behind those key metrics with a view to changing KPIs if necessary. 

The reports you produce will aid owner-directors and senior managers to decide better whether they should: 

• purchase another company, 
• diversify into new geographical areas and/or new marketplaces, 
• invest in capital equipment, 
• continue to work with the same suppliers and more. 

The information you present will allow senior management to better predict upcoming trends, analysing purchasing costs, where revenues will come from, likely future costs, and more. 

In situations where there are multiple options for a business to invest or move forward, the work you produce will allow companies to mitigate for opportunity cost by comparing the likely rates of return on different courses of action and how soon particular projects might take to break even. 

With the analysis you provide, companies will be better placed to estimate the effect of cash flow on the business, set budgets, and project revenue growth or decline. 

Fee opportunities in this area are significant and, by diversifying your range of services to include it, your monthly direct debit clients could take your practice to break even and beyond with the lion share of much larger annual profits coming from management accounting. 

There are many similarities between the role of a management accountant and a part-time FD/NED however the analysis and the insight offered by management accounting is much greater. 

It would not be unreasonable to charge between £500 and £1,000 a day for these services and your core market should be clients whose profitability has suffered and/or whose revenues have grown constantly in recent years. 

The Hindsight app and management accounting 

If yours is an accounting firm whose revenues come mainly from compliance services paid for by direct debit, we appreciate that you and your staff will currently be very busy servicing those clients. 

While you may wish to offer management accounting services to your clients, we understand that you might not be able to see where you and your team will find the time to provide them. 

Accounting is a process-driven industry and, while online bookkeeping platforms offer many advantages to clients and accountants alike, they are not perfect.  

Clients are often slow to update them and sometimes the information they input is not of a high enough quality. 

Rather than save you much of the bookkeeping work, often they add to it as, when year end or period end is approaching, you and your colleagues must undertake significant retrospective work to bring them up to the standard required to produce and submit accurate returns. 

Over the course of 18 months, my team and I developed Hindsight, a plug-in for Xero. 

Instead of you and your colleagues having to constantly log in to each client’s Xero account and run reports, Hindsight does this every day.  

It comes pre-programmed with certain alerts letting you and your team know when you should contact the client – for example, if their clients are taking too long to pay, they haven’t reconciled their bank accounts lately, cash in the bank is low, and so on. You can even program specific alerts for individual clients which reflect potential issues of concern better. 

When an alert appears, so does additional information showing you how to explain the issue in plain English to your client and how they can resolve it. By taking this approach, work to maintain the quality of the accounts is spread evenly across the year and your client gets to know better how to use their online bookkeeping platform. 

We created Hindsight to better manage workflow within accounting practices and to free time for practices to offer a wider range of value added services to their clients. 

To find out more about Hindsight, please click here to arrange a phone call with our team. Alternatively, please click here to email us. 

How do you define what a good client for an accountant is? What personal qualities would they have, what type of business would they run, how much (or little) work would they create for you and your team, and how demanding would they be of your time?

Your definition of what a good client is will differ from all other accountants but it’s fair to say that you’ll already have clients you prefer dealing with and other clients who, when they want to speak with you, send an unnerving shiver down your spine.

Client personality aside, a good client is most likely to be the one whose demands of you match your practice’s capacity and ability to deliver.

Know thyself

Perhaps I have been binging on my “Wall Street” Blu Ray too much recently but Sun Tze, the Chinese general, military strategist, writer and philosopher, believes that the idea of knowing who you were was of paramount importance to achieving your goals.

He said that you should “know others and know thyself and you will not be endangered by innumerable battles”.

Historians and scholars have attributed various interpretations to this phrase over the century but the interpretation I personally prefer is that you’ll never be prepared for danger if you don’t know your own strengths and weaknesses.

For the purposes of this article, I’m going to transpose that “danger” as meaning an inability to effectively service your clients in either the way they wanted and/or the way that you promised you’d look after them.

Your practice’s strengths and weaknesses

The only person in this world you can be truly responsible for is yourself.

Likewise, the only person responsible for your practice’s strengths and weaknesses is you – the owner of that practice.

It was your decision and your decision alone which range of services you offered to your clients and the way you described your level of service to clients when you pitched them for business.

Likewise, it was your decision and your decision only to choose which staff (and how many) you would employ to support you and the software with which you run your practice.

When you first met your current clients before you signed them up, how “hard” did you sell your practice and its abilities?

Probably very hard – you wanted the business after all. And I am willing to bet that not a word which passes your lips you didn’t completely believe in.

At the face-to-face meeting, was there a question your future client asked you which you didn’t say “yes, we can do that” to?

But were you describing the services and the level of attention as your practice was then or as you wanted it to be at a future point in its development?

Particularly in newer practices, there is a dash for growth as owners seek to maximise capacity and generate the cash required to build a team around the owner.

In many cases, this means that practices, whether new or old, often have too many clients on their books meaning that their ability to deliver the level and quality of services they had promised at sign-up is severely impaired.

The point I am making is that all of the decisions you have taken to date have created something of value and of worth – that is, your business – your practice.

However some of these decisions will have left you underprepared for “danger”.

The real life consequences of accounting “danger”

For an accountancy practice, “danger” can mean three things:

• you become distant from your clients,
• the quality of your work suffers, and
• you make your professional life and your staff’s professional lives almost unbearable.

First, “danger” might mean that you’re not in touch with your clients as often as you would like or they would like. Survey after survey has shown that clients are more likely to leave for another accountant if they feel ignored or neglected.

With up to 36% of clients looking to switch at any one time, the “danger” to your business is that more than a third of its revenues may disappear over the coming year which you’ll need to replace.

Second, “danger” might mean that you’re working past your practice’s capacity limit – you have too much work on for you and your team to cope with.

The problem here is that you and your team then adopt a survival posture – doing work only when it needs to be done and in a hurry. One example of this might be logging into your client’s Xero account six weeks before the CT600 is due and before accounts must be filed at Companies House.

This creates almighty scrambles for you and your team to improve often inadequate financial records to HMRC’s barest minimum quality level meaning that many opportunities to save clients money on their taxes are missed because of misclassifications of expenditure items.

Last, the third major consequence of operating in survival mode is on your and your team. You’ll be exhausted – account, file, repeat, account, file, repeat – and probably desperately unhappy.

The staff working for accounting firms in general (not specifically at yours) are among the most unhappy employees in the general workforce and, in many cases, it would not take much to persuade some staff to jump ship to another firm in the hope that they’ll find something better, less stressful, and more varied.

If any of this sounds familiar or you could envisage it happening, there will be no such thing as a “good client” or a “bad client” anymore.
There’ll only be “unmanageable clients” and “completely unmanageable clients”.

To find and keep good clients, you need to know thyself

For a client to be “good” and for you to be a good accountant to your client, there has to be a fit.

I’m excepting personality from this discussion – if you’re in a face to face meeting with a potential client and their personality makes your skin crawl for whatever reason or they laugh too hard at their own “jokes” too many times during the conversation, be the bigger person, shake their hands, and walk away from the deal.
Earlier in this article, I mentioned how you and you alone were responsible for your accounting firm’s capacity and its range of services.

If you are finding that you have too many “bad clients”, I humbly suggest that what makes them bad is that they are giving you too much work to do:

• for what they pay you and/or
• your and your colleague’s ability to juggle that additional work with your general workload.

There is clearly a bad fit here – it’s not working for you and it’s not working for them.

What’s to blame? In many accounting practices, it’s often the lack of an efficient working routine.

Instead of preparing period ends, year ends, and Self Assessments with six or less weeks to go before the deadline, can you reorganise your practice to split the work over the course of a year?

For example, if there are five of you servicing 200 accounts, you could task your colleagues to log into each client’s Xero accounts once a month to check for certain issues like:

• cash in the bank,
• level of indebtedness,
• average days taken to pay an invoice,
• when the last invoice was issued, and
• when the last bank reconciliation took place and how many outstanding items need reconciling.

Each time your colleagues checks into your client’s accounts, task them to run a series of reports. The results of those reports will indicate how much individual attention each client needs to ensure that their financial recordkeeping is up to the required standard.

When issues are spotted, encourage your colleagues to call the client, explain the nature of the problem, and offer a solution.
If those solutions are ignored month after month, put the client on warning that, if they do not keep their financial records up to date:

• your ability to save them as much money as possible on tax will be compromised and
• you’ll be closing their account at year end, period end, or at the end of the contract they’ve signed to access your service.

By doing this, the amount of remedial work you and your colleagues will need to do when preparing their accounts or readying their submissions to HMRC or Companies House will be minimal.

If you have five colleagues and your firm serves 200 clients, this means that each colleague will need to log into 10 clients’ accounts every day to run reports. In the early days, this will take up a fair amount of time but, as your clients start to follow your instructions, that workload should decrease month on month.

Your regular communications, if occasionally nagging in tone, will be appreciated by your clients because it actually seems like you’re paying attention to them. You’ll be a “good accountant” to them.

Their acquiescence to your colleagues’ demands to keep their books up to date will reduce the overall volume of work required per client as well as spread that work out over the course of 12 months. They’re now much closer to being a “good client” for you and your team.

The benefits of introducing a more defined and regular structure to your and your colleague’s workloads and to minimum standards of interaction from a client are many.

Instead of being chased by clients for their accounts or to find out their level of tax liabilities, you’ll be able to let them know within weeks giving them time to find the cash – that benefits both of you.

You’ll break the cycle of “account, file, repeat, account, file, repeat” for yourself and your colleagues. There’ll be less general pressure when they come into work and at peak times of year.

And for you and your colleagues, there’ll be much more time to offer a wider range of services to your clients – work which will bring in extra revenue to the practice and work to provide new stimulation and engagement to your staff.

The Hindsight app

I personally know all of that which I described above – that was my old accounting practice once before I sold up.

Since selling up, my new team and I have spent 18 months developing the Hindsight plug-in for Xero.

Why “Hindsight” and not “Foresight”? It’s because the way I would have run my old accounting practice, with hindsight, is how I’ve set out in this article. Client-focused, colleague-focused, and focused on delivering the type of practice I would like to have run.

The processes I’ve described have been coded into Hindsight but, instead of your colleagues personally logging into 200 different client accounts once a month, Hindsight does it automatically every day, runs the insights on your behalf, and then assigns different tasks and/or clients to different members of your team.

If I’d had Hindsight back then, I don’t think I would ever have sold up because the app is capable of delivering what I wanted for my practice. And, after speaking with hundreds of colleagues before and during its development, I know many of you feel the same way.

I’d really appreciate the opportunity to show you around the system.

Please click here to arrange a phone call with our team or, alternatively, please click here to email us.

Ex-Beatle George Harrison said in 1970 that “for every 100 pounds we’ve earned, we got a 100 pounds worth of problems to balance it.” Anyone who runs a business will know that feeling. 

You’ve probably heard variations on this theme like “10 employees is a team, 100 employees is a nightmare” and so on. 

These phrases, as cliched as they might sound, point to an underlying truth about companies whose turnover exceeds around half a million pounds. They have becoming living, emotional, temperamental beings whose hunger for cash never seems to diminish. 

£500,000 might not sound a lot but, from that budget, the prices of the goods and services needed to fulfil orders must be factored in as must wages, commissions, rent, rates, software, professional fees, advertising and marketing, taxes, directors’ remunerations, and so on. There may be thousands of transactions inbound and outbound which have to be accounted for. 

At this point, it becomes harder and harder, even with managerial support, for owner-directors to be aware of everything that’s going on. 

If the owner-director is pushing his or her team for growth, they may be relying on earlier systems and infrastructure to handle the processing and fulfilment of orders which were not designed for these higher volumes. 

A successful push for growth often hides deep and sometimes fundamental problems within the business plan, the staffing, and the organisational structure of a company which only become visible later on and which come back to haunt it. 

Many companies bring in a part-time financial director or a non-executive director at this point but a growing number of owner-directors are turning to their accountants to operate in an overseeing and advisory role. 

What opportunities are there for your practice with advisory accounting, particularly in a world still beset by economic disruptions because of the COVID-19 pandemic? 

Why you and not a part-time FD? 

Before we look at “why you?” from the client’s point of view, let’s consider “why you?” from your point of view. 

The number of accounting firms in the UK is at an all time record high. Even though you may service sole traders, partnerships, freelancers, and contractors, the highest fees are really only available when servicing established limited companies. 

There are around 350,000 active limited companies in the UK and around 16,000 accountants. In other words, there are around 22 limited companies for every accountancy practice in the UK. The only similar professional services industry with this level of competition is the recruitment sector. 

Although only one in five choose their accountant by the price they charge, sole traders, partnerships, freelancers, and contractors have much tighter budgets in general.  

Their current accountants will advise them to convert into limited companies because of the tax advantages they’d benefit from but they haven’t reached this stage yet. 

Therefore, the fees you can charge limited companies with turnovers of more than £500,000 are significantly greater than a sole trader turning over £100,000. 

The owners of limited companies turning over £500,000 a year or more will want to do one of two things generally: 

• keep turnover at its current level and look for ways to maximise profit or 
• use cash flow (and, in some cases, external finance) to fund a period of growth. 

Why you to help them achieve their goals? As their accountant, no-one outside the company knows the business better on preparing financial forecasts, developing a strategic path ahead, improving profitability, and retaining as much cash as possible during periods of expansion. 

You’re in a better place to see the problems lying beneath the surface within a business and to determine whether the current staff and structure of the company are capable of achieving the goals of the business plan you’ll agree with your client. 

A part-time FD or a NED would, of course, have access to your client’s financial records but on a much more intermittent basis that you as an advisory accountant. 

Your accounting practice and your personal business acumen are much better positioned to meld into the corporate structure of your client. 

In addition to advising your clients on how to achieve the goals they had set out, you’ll also have an opportunity to earn significant fee income if you are advising your client on: 

• readying their business for investment or 
• their exit strategy 

Readying for investment 

A proactive advisory accountant is particularly important for companies wanting to source external finance or investment for the purchase of new equipment or for a speculative period of expansion. 

The larger the sum of money required to fund a client’s plans, the more scrutiny it will undergo by either funders or investors.  

They will want to see predictable revenue streams, a healthy profit margin, evidence of market demand, a stable and nimble management team with a track record of success, the right staff at key pinch points within the company, and a strong business plan. 

The presence of an advisory accountant throughout the process with the promise that you will be there to motivate, guide, and instruct the management team to hit the targets set out in the business plan will be one of the most attractive features of any potential investment. 

Exit strategies 

Taking a company to market should be planned for up to 18 months before it’s finally offered to sale to investors and other parties. 

While the purchasers of businesses buy companies for the value they can add to them over three years, the best way to secure the most advantageous price for your client is to make sure that, during the due diligence process, there are fewer reasons for the buyer to try to haggle the price down from the originally agreed amount. 

In your role as advisory accountant, you’ll need to make sure that: 

• the management team post-handover is capable of running the business without its current owner-directors and be able to prove that and 
• the current structure and staff of the business can be built upon rather than need replacing. 

An 18-month lead-in time also gives you the opportunity to build a library of documents for the due diligence process and keep it up to date on a month-by-month basis. 

In those cases where the exit is the transfer of the business to family members, your role in readying the business for handover will be particularly crucial if the owner-directors stepping down will rely on the company as a source of income in retirement. 

What do you need to change to offer the best service? 

To offer the best advisory accounting services to your clients, you need to ensure that you have a deep and historical understanding of how your client’s businesses have got to the point that they have. 

What has aided a company to get to its current position and what has the potential to prevent them from getting them to where they want to be? 

You’ll need access to constantly updated financial records so that you can check on your clients’ progress regularly, report back to them, and advice on whatever course of action they need to take if things aren’t going to plan. 

We understand that, if you and your team are already dealing with hundreds of client accounts at the same time as offering advisory services, there is a risk of periods of very high demand on you and your staff at certain points of the year. 

To assist small accounting firm owners to overcome this situation, we developed Hindsight, a specialist plug-in app for Xero, over the period of 18 months. 

Hindsight automatically logs in to each of your client’s Xero accounts once a day. It downloads all of the new information it finds for each client and then analyses it with a view to alerting you to certain events – amount in a client’s bank account, level of indebtedness, last bank reconciliation, debtors days, last invoice issued, and so on. 

If a flag is triggered, it notifies you or the team member to whom you have passed the responsibility that action is needed. At the same time as flagging the event, Hindsight also contains information and tips on how to present the issue to the client with the goal of resolving it as quickly as possible. 

Hindsight is designed to keep you and your team constantly up to date with the state of each client’s businesses thereby greatly reducing the often very large amount of retrospective work which needs to be done at year end or period end to submit Self Assessment, CT600 forms, or accounts to Companies House. 

Hindsight saves time, improves the level of service you often to standard and advisory clients, and divides the workload better and more evenly between you and your staff over the course of the year. 

To find out more about Hindsight, please click here to arrange a phone call with our team. Alternatively, please click here to email us.