7 Jun, 2021
With over 50m people in the UK now vaccinated, and businesses coming back to life, clients are faced with a great number of challenges, but also opportunities. We caught up with Luke Bath, Partner at Alliotts, to hear his thoughts on how clients are bouncing back.
What are the three most pressing issues you're seeing and hearing from clients?
The biggest one currently is access to finance. Lots of clients have exhausted almost all their cash and taken the government support measures or they’re just starting to open up and need funding for that. Those that have been able to trade and function throughout are doing okay, but those that have been almost dormant for 12 months often need access to finance for working capital.
Secondly, planning for unexpected changes. We’ve some clients that we're able to stay open that are doing well, but what if we have a variant that goes wild through the UK, what if there’s another lockdown, who knows? And for those that are about to open, what if the demand isn’t there like before? What if you’re a Central London business that relies on footfall, and the footfall isn’t what you anticipated?
Finally, cash flow forecasting. We’ve been exploring best case/worst case scenarios with clients in Fathom, as well as what we expect somewhere between the two. There are also operational issues like when to bring people back off furlough, what does the business look like with new remote working patterns, those sorts of things.
How important are cash flow and forecasting for your clients?
It's very important, but also really difficult because it’s hard to anticipate demand. And then it's all the usual things like just trying to reduce your overheads, access to funding, and marketing measures. Often the businesses will all know what's best for them in that sense, but it’s always worth flagging that to the client.
How are clients using the new funding they receive?
It's broadly in two camps. For some, it’s working capital and day-to-day things. For others, there’s now a massive opportunity as things are opening up, they’re looking at expansion or new ways of doing things. Generally, confidence is high.
How are you using Fathom with clients?
For our more progressive clients, we’re acting more like a business partner with them. They’ll come to us for advice on strategic decisions and want our input. It's sometimes down to the minutiae, for example, I recently had a client that wanted to buy a piece of equipment. He had the cash to buy it, but wanted to know should he do that, or go for hire purchase, or asset financing. I explained the super deduction, and how it was beneficial to buy upfront. It's almost full-service outsourcing for them. So if you do all the bookkeeping on cloud software, and you do a very nice informative report in Fathom, it just enables those kinds of conversations.
We have several clients that are getting to a point where the business is getting to a size where they need strategic advice. It's getting difficult to manage the day to day cash flow and profit just based on the cash figure and looking at which suppliers are chasing you for debts and things like that. So they need a proper finance function. They appreciate it when you use things like Fathom for the non-financial KPI reporting. Clients love that, they really do.
It also looks very good. I’ve got two clients where I've sent the Fathom report to them and they were so thrilled to receive it. These are intelligent, successful people that are getting excited about how good their management report looked. So that is a big plus, especially compared to the other products on the marketplace.
What other ways are you helping clients?
It's not only cash flow forecasts and management accounts, it’s simple things as well. For example, we've got a client that has around 100 invoices a month because the directors and area managers do a lot of driving and parking. So we suggested - what if they get a corporate account instead? We'll get one invoice a month. There are minor cash flow advantages, and we just pay one invoice at the end of the month? But also it makes it easier for everyone because I don't have to chase them for missing invoices and they don’t have the admin every month pulling the receipts and invoices together. It's not even financial stuff sometimes that you can help the client with, it's just basic business advice.
Our thanks to Luke for giving us his valuable time and insight on how businesses are bouncing back, what type of support they need from their advisors, and how Fathom can help do that.
Written by Andrew Webb
Andrew is Fathom’s Content Strategist based in the UK. He has a background in journalism and has worked for companies like the BBC and HuffPost, as well as start ups in education and technology. Andrew has also published 5 food books and makes a great pie.