How accountants can help with business credit
We all know how crucial credit can be. Yet in these uncertain economic times, guaranteeing access to lending is becoming more difficult than ever.
Despite being recognised as a vital survival tool for small and medium-sized businesses – and a necessary strategy for the UK’s long-term recovery – many are still struggling to secure the credit they need.
Steve Porter, Sage Accountants' Division
A more cautionary approach to approving funds has been seen across the board with suppliers, trade credit insurers, building societies and banks failing to meet their lending targets this year – all showing a reluctance to extend terms.
A mistrust of traditional business data as a way of measuring risk is recognised as one of the biggest barriers to securing credit and many banks and suppliers are demanding more up-to-date and monthly management accounts as part of any application.
One of our recent Sage Omnibus surveys found that half of accountants polled said they were now being asked to help prepare quarterly or monthly accounts, while another 53 per cent revealed clients were struggling to access credit.
Here at Sage we have been engaging with numerous industry bodies such as the Confederation of British Industry (CBI) – as well as other trade credit insurers and interested parties – to understand the impact on the market and explore ways that we could potentially assist both you and your clients.
Help is at hand
What can SMEs do to help themselves? If they are to secure continued lending, they must be pro-active about their credit profile – looking at ways to offer more real-time accounts and to improve their financial standing.
Accountants’ role is key, and there are credit and analysis tools at hand to help identify new ways to help businesses stay ahead – such as CreditPal (provided by Future Route).
These secure, internet-based facilities help users maintain detailed financial accounts and manage lending needs. For example, CreditPal complements Sage software – such as Sage 50 Accounts and Sage 200 – requiring no extra download or installation, and allows users to review internal finance and automatically generate standardised and validated monthly management accounts.
Accountants can offer such credit and analysis tools as a value-added service, generating data on a client’s behalf, or acting as an advisor to help SMEs access and set up the service in-house.
However these links are made, accountants are able to play an invaluable part in maintaining the steady credit flow all businesses need.
Steve Porter, Marketing Campaign Manager, Sage Accountants’ Division
