For years, we have heard the same message. Software is getting smarter by the minute. We need to lean on our strengths as humans to stand out.
Now, that message is stronger than ever.
A few weeks ago, the world as we know it changed. With it, we had to take our work quickly online and for accountants and bookkeepers, support businesses through unprecedented personal and financial uncertainty at a global scale.
Here are a few learnings from Mark Tickel, the Director of Afresh Accountants.
1. The power of a daily call
In extraordinary times like this, quick and regular communication with clients is crucial. At the beginning, my priority was to simply pick up the phone and say, ‘Hi, how are you?’
I wanted to let them know that I am here for them, to show them that they are not alone and confirm what I hope they already thought of our relationship: that I genuinely cared about them and understood the importance of their business and income – not only to them but also their families.
Right now, there will be so many financial numbers flying around in business-owners’ heads. Many of these will be filling them with very understandable fear of the unpredictability and uncertainty of the months ahead. We, as accountants and bookkeepers, are perfectly placed to help them produce and understand both their current and future numbers.
However, behind all of these numbers are real human stories. At times like these, I believe it is equally important to focus on these and help them deal with the stress and worry they may be feeling.
Over the last few weeks, I’ve reached out to clients daily – including weekends. I use these calls to:
- Check in to see how they and family are and see where I may be able to help;
- Keep them updated on the financial help available to them, in easy, simple language;
- Confirm to them how successful their business was just a few days ago, and how successful it will be again.
I think the simple act of listening will be crucial in helping our clients navigate the gap between pre-Covid and the time that their business begins trading in a more normal world again. By listening and assisting regularly we can show them that we will always have their back.
2. Send a daily briefing
Everyone is going to be bombarded by 24-hour news and a constant flow of social media updates. Our clients are probably watching and reading the exact same daily briefings and posts as us, while frantically google searching for guidance on business help for Covid-19.
Where we can help is to briefly summarise what we are also seeing in a way that directly relates to our clients’ businesses. That uses not only our years of experience but also insights from other conversations with clients. Even if we know that our clients watch the same ten o’clock news as us, they may be looking for reassurance or someone to discuss the key points with. There’s nothing worse than already worried clients spending hours on their computer or waiting on phone lines looking for specific details on new measures, particularly when the government and local councils are still just sorting these out.
Clients are naturally worried about their staff and their ability to pay them at the end of the month, while also paying their own bills. For me, the majority of discussions to date have been around:
- The coronavirus job retention scheme (‘CJR’); its impact on staff, help for directors and how the self-employed can also claim for loss of income
- The deferment of VAT
- 31 July Income Tax payment for the self-employed
- Ability to contact HMRC’s time to pay service, where they have outstanding tax liabilities that they may struggle to pay because of Covid-19
I’ve also kept them updated on other areas of financial help, such as grants for those in the leisure and hospitality industries, the Coronavirus Business Interruption loan scheme (‘CBILS’) and how these could help with future cash flow. I’ve found it helpful to focus and prioritise tasks in the order that they will be faced.
One of my clients owns an amazing hotel in a beautiful part of North Wales. They went from being fully booked to having every booking wiped out in just a few days.
We urgently needed to tackle month end payroll at the end of March, immediately look to reduce other costs where possible and then quickly prepare accounts to 31 March 2020 so that we knew exactly where we were financially before plotting the satnav cash flow path for the coming days and weeks – assessing and applying for financial help.
During all of the above financial help, it was also helpful to keep spirits up and discuss the future for this amazing hotel in a post-Covid world. We needed to simply talk through other things that might be done over the coming weeks to help create an even better business when we come out of the other side of this.
I watched how Gary Neville’s hotel in Manchester took steps to help heroic NHS staff during its guest local down and I talked to my client about how it will probably be very hard to book a room at that very popular Manchester hotel in the future because of the positive and decisive decisions they had taken. If we compare Gary Neville to certain other business leaders, we can see where others are making poor commercial decisions that will affect their business in the long term.
When this is over, people will want to go back to hotels, pubs, bars and cafes. And they’ll want to return to those that were successful before the virus, and acted in others’ best interests despite the challenges.
3. Prioritise cash-flow
A lot of my clients are in the leisure and retail space. Their income has been dramatically falling over the last few weeks. For some, it’s now completely disappeared with no indication as to when it’ll start again.
I’ve been urgently talking to my clients to stop and assess the outflow of cash over the coming days, weeks and months. Luckily by using Receipt Bank, Quickbooks and Xero, I’ve been able to quickly look at their purchase ledger and other liabilities, eg PAYE on their balance sheet.
We’ve focused on making sure we can meet month-end payments for staff. We hope to eventually recover some of it from the government’s CJR scheme in late April – and if need be, seek immediate overdraft assistance from the bank to meet payroll. Then we use HMRC’s time to pay scheme and make a call to agree a repayment scheme over as long a period as will be allowed for any unpaid PAYE or corporation tax.
We all have a role to help out other small businesses and ensure we pay their invoices to help them survive.
This plays a part when assessing a client’s trade creditors. For example, if we have a final payment of rates for 2019/20 due or an outstanding gas and electricity bill for a major supplier, then we take the view to pay smaller suppliers first if possible.
For clients with debtors, help is needed to look at each debtor and see where we may possibly be able to obtain payment of that debt. With so many businesses in the same financial difficulty, obtaining payment will not be an easy task. Yet, it’s one that should definitely not just be left because it may prove difficult.
Now that we have made it through month-end payroll payments, our hope is that we’ll soon see the details as to how and when claims for CJR can be made, and importantly, when those will be received by clients. With recent announcements on the revised and improved CBILS scheme, I’ve been spending the last few days ensuring that management accounts up to 31 March 2020 are completed asap and then setting up a cashflow forecast using Futrli in order to show and reassure my clients as to a path through the current turmoil.
With up-to-date accounts and a three year futrli cash flow forecast, I am creating the key data for a funding application pack that has the highest chance of successful bank agreement. Over the next few weeks, it will be a case of checking in regularly with clients to see if and how we need to update that cash flow.
Ultimately, it’s key to be positive about the businesses we expect to return to.
In the weeks and months ahead, they will be profitable again. For now, we must show good will – firstly, with each other, our employees and key suppliers alike.