Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

A new win/win opportunity for your practice and your clients

Promoted by Cloudsolve

It’s a win/win for you and your clients.

A win/win outcome: it’s what we all want. Increasing our accounting service offering, whilst simultaneously improving the performance of our clients’ business.

Sponsored Features Rhys Roberts 05 March 2020
— 4 minute read

Outsourced CFO services (or general business advisory) can be an area ripe for such outcomes for accountants in practice.  Done well the client gains significant insights into their business, enabling them to take decisions that improve future outcomes, not to mention the reduced stress of understanding their financial position.  For the advisor there are is also a range of positive outcomes: a stronger relationship with our clients, an interesting and varied area in which to deploy our expertise, and – of course – an opportunity to generate incremental income.

Advertisement
Advertisement

But with many small businesses there is a significant barrier to providing these services: the client’s data is so poor that the results are not reliable (or the time required to correct the data is prohibitively expensive).  Whilst there are a number of causes of poor data the largest driver is inadequate systems: service businesses that cannot adequately account for work in progress, tradies struggling to invoice on time, inventory based businesses unable to account for closing stock.  All of these issues lead to wild fluctuations in Sales, Cost of Goods Sold and Gross Margin, making any meaningful analysis or forecasting extremely difficult (and / or time consuming).  Worse than this, the Profit and Loss report represents a business wide average of revenue and costs (over all customers / all sales), but in reality most businesses will have “good” and “bad” areas of their business: once again a lack of adequate systems hides these variations and prohibits any drill down.

The solution to this is to work with the client – and if necessary with a third party (such as Cloudsolve) – to identify the issues that they face in the day to day operation of their business, and assisting them to implement the most appropriate solution to streamline the running of that business.  Almost without exception there will be a range of solutions that will deliver operational efficiencies to the client, and will at the same time provide a platform for the advisor to access the data they need to provide analytical, reporting, forecasting and related services. A win/win.

Identifying and implementing the best solution for any given client is not always easy, nor is implementing it and managing the organisational change to maximise the likelihood of a great outcome!  This is where an app advisor such as Cloudsolve comes in. App advisory means nothing more than picking the right solution for the business, and implementing it well. But like any other area of an advisors business, it is hard to do well if it is not your area of expertise.

Let’s look at some examples.  Cloudsolve was recently asked by an accounting practice to work with a franchise group who sell both services and products.  The franchise aspect of the business was already systematised, but the inventory sales were not. Over the 6 months prior to going live with a new system their Gross Margin from inventory sales ranged from negative 15% (i.e. COGS higher than sales) to just over 150% (i.e. negative COGS).

In the 6 months since implementing a stock control system their GP% has ranged between 30% and 40%: this range reflecting a combination of real operational factors such as a different mix of products sold to a different mix of customers on different prices, and some seasonal discounting.  Armed with this information the advisor has been able to not only provide analysis and reports, but also cashflow forecasts. The client is now starting to review some of their pricing, promotional and other factors, which – if they get it right – will yield improved results for the business. Of course being equipped with accurate figures their chances of “getting it right” have to be much higher.

But what about the client’s internal operation?  Well, they have eliminated rekeying of orders, have been able to speed up picking and delivery of orders, have increased monthly sales year on year, and are able to re-order more confidently knowing what stock they have on hand by item at any time.  So that’s a third win – by my count that makes a win/win/win!

What about a service based business?  We were asked last year to assist a Not-For-Profit (employing around 30 staff) to upgrade their systems.  We were able to work with the client and their advisor to identify a suite of products including an accounting app, a donations management solution, a budgeting & reporting solution, and a variety of other apps that would deliver the outcome they required.  This project also included a considerable element of change management, working with the client’s staff to assist them to adapt to and adopt the new systems and processes.  

Once again, the outcome has been a reduction in the transactional processing time within the client’s business, an efficiency gain that has also resulted in far higher quality accounting data: board reports that used to take a week to prepare can now be produced in a few hours.

Many of your clients will at various times look to you for advice on upgrading their systems.  If your practice also wants to offer (more) outsourced CFO services helping get your clients onto the right software solution can help them achieve their goals, and help you to do the same.  For help in selecting and implementing the right solution for your clients’ business you can contact Cloudsolve.

Cloudsolve can help you achieve these win/win opportunities in your practice. Book a consultation with us today.

A new win/win opportunity for your practice and your clients
image intro
accountantsdaily logo
Sponsored Features
FROM THE WEB