Few will deny that cash is so crucial to small businesses that they literally can’t function without it. You’ve probably heard the stats – poor cash flow is the reason behind 90% of business failures. So surely the being that helps a business navigate the treacherous waters of The Cash Flow Problem reigns supreme? That being, for many a small business, is the accountant.

To get more insight into how the accountant can make the difference between business life and death, we caught up with Bobby Lane. He’s a chartered accountant and an expert on helping SMEs achieve their growth ambitions.

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You can have the most profitable business in the world, but if you don’t have the cash to pay the bills you won’t survive very long. Late or delayed payment from clients is often the reason behind a lack of cash flow. So, getting to know the SME is the first step to understanding its financial needs. According to Bobby, strong communication based on regular meetings and two-way dialogue is vital. With this in place, it’s possible to identify requirements and pinpoint the right solution.

“I work with my clients to identify the best way of funding their working capital requirements,” explains Bobby. “Preparing detailed forecasts based on their business plans allows me to identify their cash requirements in the short, medium and longer term. I would then work with my broad contact base with the various providers of finance to introduce the most appropriate lender to the client.”

Although newer businesses tend to monitor their cash position more closely, as they become larger and more cash generative, they tend to lose the effective controls they had early on. “The key for SMEs is to understand their working capital cycle and to never bury their heads in the sand,” says Bobby. “Most of my clients would be able to tell you to the penny what they have in the bank and what they require in the short term.”

Cash for growth and opportunities

Being an entrepreneur shouldn’t be about just surviving – cash does more than just keep a business afloat. Another stat you’ll be familiar with is that more than 50% of SME owners in the UK can’t access all of the funding they need to grow. Whether it’s for investing in new infrastructure, expanding the product range or entering new markets, cash makes growth possible.

“Even with the unknowns surrounding Brexit, British SME business owners are getting on with running their businesses,” says Bobby. “While they all want an end to the uncertainty, growth opportunities are still cropping up. The important thing is to be able to take advantage of them as they arise. Being able to suggest the right kinds of solutions, whatever the problem, is what clients count on from their accountants.”

MarketFinance was delighted to be one such solution for Bobby and his clients, as he explains:

“MarketFinance solutions were a real game changer for one of my clients. They were looking to grow their business and didn’t want to deal with the historic issues of a whole debtor book facility and the cost! Being able to be selective and use the facility for certain invoices to release working capital as and when they needed it helped them to grow in the right way.”

Where to from here?

So, what’s the verdict? Supreme being or regular Joe? Regardless of the label we choose, an accountant has the power (ok – knowledge, expertise and skills) to make a real difference to business owners.

If you don’t already have one, add an accountant to your team today and start reaping the benefits of everything they have to offer. If you’ve already got an accounting supremo on your side, get your next catch up booked into the diary.

With cash flow taken care of, you’ll kick off 2020 with your best foot forward.