Accountants must help SME clients provide quality financial information to their banks

According to The Forum of Private Business (FPB), leading banks often complain that financial information submitted by SMEs is unclear and confusing.  This makes it difficult for the banks to properly assess lending risks on a case-by-case basis. 

In turn, many business owners have reported that they are being rejected by lenders purely because of the size of their company - or, more often, because their sector is deemed a 'no go' area for lending.  

Martin Pollins, Founder and Managing Director of Bizezia, said: "A standoff between banks and their customers is evident and the accountancy profession has an important role to play in bringing the two back together".

He continued: "An effective partnership is needed between a client and their accountant so that a profit and loss account, balance sheet and a forecast of cashflow and profit can be readily and cost effectively produced".

Sometimes, the fees required to produce such information exceed the resources of the client.  With this in mind, The FPB has recently launched Forum CreditPal - a service designed to complement existing accounting packages such as Sage.  The service allows users to review internal finance and automatically generate standardised and validated monthly management accounts. There is a version of CreditPal for Accountants which allows the profession to offer such credit and analysis tools as a value-added service, generating data on a client's behalf, or acting as an adviser to help SME's access and set up the service for themselves.

Research carried out last year by the FPB suggests that the credit crisis stimulated businesses into better financial management practices. In all, 68 percent of respondents to the survey said they had been motivated to produce management accounts - with 85 percent of these citing the reason for doing so as 'improving business management'.

Philip Orford of the FPB said "Banks clearly have a major part to play in financing a private sector-led economic recovery driven by small business growth and job creation. Lenders simply must review their risk criteria and be less punitive by refraining from assessing viability purely based on a firm's size or sector."

Bizezia provides a range of products that can support accountants in helping their clients.  These include a calculator of the change in sales required to compensate a change in price and a risk assessment evaluator which aims to reduce the cost of borrowing by identifying areas in which the presentation of a risk profile can be improved.  All are available in the Calculator and Evaluatorsection of the Bizezia website.

Bizezia also offers Better Business Plans, a publication that helps accountants to fine tune the presentation of a client's business plan prior to submission to the bank.  

For a constant stream of quality information delivered automatically to your website, try EziaNews, a daily round up of industry relevant articles. 

Source: FPB press release re small businesses and their banks, 24/2/2011

Ends This announcement was featured in EziaNews on 21st Feb

Notes

  • Bizezia provides high quality, unique website marketing apps and practice management tools. Bizezia's products are designed to make business easier, encourage people to to visit your website and to keep them coming back.
     
  • Bizezia's EziaNews is an ideal example of how to keep your website current and informative. It's a daily round-up of business news that can be placed on to your website with no effort on your part and gives your clients, prospects and staff instant access to the latest business news.
     
  • Bizezia can trace its roots back to 1986, at a time when accountants were beginning to develop innovative marketing strategies for the first time. Then, with the launch of the Internet, Martin Pollins, founder of Bizezia, saw a new business opportunity to provide marketing and administrative products specifically for professionals serving SMEs, which would be available on their own websites with the aim of attracting potential clients and improving the level of service to existing clients.
     
  • Martin Pollins, chairman and founder of Bizezia, is a Chartered Accountant with wide experience in corporate finance and business management. He ran his own accountancy firm in Sussex and was the first accountancy firm in the UK to advertise on television. Martin went on to create and launch the CharterGroup Partnership (the UK's first accountancy network) and then LawGroup UK, one of the largest networks of lawyers in the country. He also served on the ICAEW Council for several years.
     
  • Operations director, Iman Rouane, is an honours journalism graduate, who has worked on a number of magazines, including Marie Claire and BBC Eve and was also a freelance newsreader for several radio stations across the south east. She joined Bizezia in 2005.