Advisory services must have budgeting!
Business Advisory Service Update
Arguably, the most important document for accountants to produce for SME clients is the “Predictive Accounting Reports” comprising:
- Budgets for each individual business operation conducted by the business
- Key Drivers for the links in the budget process
- Cash Flow Forecast
- Projected Balance Sheet
- (and for the ongoing monitoring of the budgets) “Rolling Forecast”
It’s a good idea to emphasise the use of the Rolling Forecast. This highlights the importance of ongoing monitoring of actual performance against the budget and then making changes as necessary, but reflecting these through the Rolling Forecast rather than changing the original budget. This way, the original budget remains intact and changes brought about by changing market conditions or omissions in the original budget forecast are shown within the Rolling Forecast.
Your clients do not get much value from an annual set of accounts and income tax return. In many instances, they are prepared 18 months and more after the commencement of the financial year to which they relate. They are historical, interesting but there is nothing that your client can do to change what has already occurred. However, with an accountant’s assistance, an SME can make a real impact in the current situation and future activities by preparing “Predictive Accounting Reports”.
The Predictive Accounting Reports are the important documentation that your clients need to effectively run their businesses in the volatile business environment that we are currently in, and are likely to continue in for at least the next 2 years.
ESS BIZTOOLS has developed a range of product packages to assist accountants to implement a range of Business Advisory Services for your clients.
