The new norm: delivering Advisory Services

The services provided by Accountants/Bookkeepers offering Advisory Services is crucial for SMEs, as they navigate the challenges that are confronting all businesses and seek assistance from their Accountants/Bookkeepers to assist with the implementation of systems which will give them timely, meaningful reports, relating to their day-to-day/month-to-month business activities.

The policy for Accountants is to implement the commitment that the founders of Financial Management Research Centre (FMRC) made 40 years ago – “LET’S TRY AND HELP OUR CLIENTS MORE WITH THEIR BUSINESSES.”

This is a review of the “Business Advisory Services” (BAS) which Accounting/Bookkeeping firms have implemented in Australia and New Zealand, to ensure that SMEs are receiving relevant financial information, key performance indicators, metrics, budget comparisons, analysis of key drivers’ financial data, regularly throughout the year.

52-Week Business Enhancement System

This is one of the primary product packages that Accountants/Bookkeepers have introduced their SME clients to and the client’ s team have been trained on the components that they will be responsible for, whilst the Accountancy/Bookkeeping team should familiarise themselves on an “A-Z basis” of how the business operates.

Due diligence review on business operations

An inch wide and a mile deep – not a mile wide and an inch deep!

Preparing documentation similar to an audit program relating to the due diligence review on the business operations: identifying any potential business risks or potential excessive investment areas.

It is important to remember that your firm is acting as the virtual CFO for your client and you need to have “ownership” of the financial data within the business, because the final reports that are being produced are being created based on that financial data.

Daily Business Report

This system needs to be established so that one of the client’ s team members is responsible for the preparation of the daily report for distribution to the people nominated by the CEO/owner with a copy being submitted to your accounting firm.

Weekly Performance Report

This is the analysis of what happened in an individual business unit during the week. A report of this nature is very important to assist the leadership team to operate the business. It is quite normal in large companies and public companies to have weekly performance reports prepared on each individual business unit conducted by the company/business.

The weekly performance report is an analysis of what happened in an individual business unit during the week. Items to be included in the weekly performance report could include team issues during the week, business premises, stock delivery: and performance barometer for the week.

Weekly Profitability Report

It is sound management practice to prepare a weekly profitability report for each individual business unit.

The calculations will contain known figures – sales – wages – product purchases but also some accurate estimates because the invoices have not yet been received.

Key Performance Indicators and Metrics

A vital adjunct to the weekly profitability report is the key performance/metrics indicators for the week. This report can inform management of significant information about what happened during the week.

Monthly Financial Accounts

The preparation of monthly financial accounts for each individual business unit will supply the manager responsible for that operation, together with the leadership team a complete overview of the results for that unit’s  month’s trading.

You would expect that the profit or loss reflected in the weekly profitability reports over the month should reconcile very closely with the results outlined in the monthly financial accounts.

If the results are not similar, a review should be undertaken to ensure that the correct data is being used in the preparation of the weekly profitability reports because you will find once the system is introduced that the responsible manager will be relying on the weekly profitability report and the information contained in the weekly performance report to guide him/her in their decision-making relating to that business unit.

Obviously, the monthly financial accounts assist in the preparation of additional reports which should be analysed and then reported on by the accounting firm performing the role of the virtual CFO to the leadership team.  These supplementary reports include budget variations from actual results and the budget, together with an indication as to what caused or is alleged to have caused the variations.

The balance sheet for the business and the key drivers of subaccounts could include:

• Debtors

• Inventory

• Creditors

• Research and development

• Capital expenditure

All of this information is very important for the successful financial management of a business.

Business Advisory Meeting

On a monthly basis, a business advisory meeting should be held with the partner or senior manager performing the role of virtual CFO reporting on the financial performance of the previous month and the overall financial state of the business.

ESS BIZTOOLS has developed product packages to assist accountants to be able to implement these services. In future editions of Accountants Minute, we will be commenting on the various activities that accountancy firms could deliver for SME clients.

Visit our website – www.essbiztools.com.au – to find out more. Alternatively, contact us on 1800 232 088 or email to arrange a suitable time for a complimentary initial consultation via Zoom, to identify how your firm can deliver “real-time accounting services” for your SME clients.

ESS BIZTOOLS Product Packages

Product packages to assist your firm to implement Business Advisory Services as outlined by Andrew Geddes. 

Starter Package

Monthly payment: $197 including GST

Discounted upfront payment (12-month subscription): $2,100 including GST

Click here to find out more and to subscribe.

Advanced Package

Monthly payment: $596 including GST

Discounted upfront payment (12-month subscription): $6,500 including GST

Click here to find out more and to subscribe.

Financial Forecasting Package

Monthly payment: $908 including GST

Discounted upfront payment (12-month subscription): $9,900 including GST

Click here to find out more and to subscribe.

Want to know more?

Visit www.essbiztools.com.au.

If you would like to have a discussion about how this concept of virtual CFO services can be supplied by Australian accounting firms please ring our Managing Director, Peter Towers, on 1800 232 088 and we will arrange a complimentary 15-minute Zoom meeting to discuss your firm’s position and to give you our advice.

We believe that this is the blueprint for the delivery of an enhanced range of services by Australian accounting firms to assist SME businesses to add value to their businesses and to assist accountants not only to attract but to retain outstanding talent who want to be involved in the delivery of “real accounting services”.

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