Cashflow modelling for clients is an integral part of advisers’ businesses.
But since the onset of the coronavirus outbreak, advice firms’ own cashflows will have begun to play on their minds more than usual.
Some IFAs without a digital setup may see reduced revenues from face-to-face client reviews, after the UK government warned Britons to cease non-essential social interactions.
At the same time, profitability may also be squeezed by staff sickness, self-isolation measures, or the need to pay for temporary staff as the spread of the virus continues.
Ongoing fees will help cushion many of these blows.
But with wages, employer national insurance, pensions, corporation tax, office costs and VAT all still needing payment, advisers will be paying closer attention than ever to their working capital position.
Patrick Connolly, head of communications at Chase de Vere, says some IFA firms will be nervous in the current climate.
“UK businesses are going through unprecedented and challenging times and it doesn’t look like this will change any time soon,” he explains.
“We are keeping in close contact with our clients, and while we aren’t going to be able to physically attend client meetings, we will be using all available technology to ensure that we communicate with them, can still speak with them face-to-face and can still provide them with personalised independent financial advice.”
Technology is proving to be key for intermediaries managing cashflow during the coronavirus outbreak.
Whether it is enabling client interactions, providing efficient oversight of real-time cash positions or allowing advisers speedy access to capital, the digital advances of recent years are proving their worth.
Managing what you have
Accounting software systems from providers such as Sage, Xero, Quickbooks, NetSuite or Wave Financial are a good start for IFAs looking to keep track of their cash flow in real time.
They can be easily connected to bank accounts and remove the painstaking need for manual invoice reconciliation of payments.
Better still, these systems can quantify which receipts qualify for VAT returns and those that do not, and can even be linked into employee spending cards to limit the amount spent on corporate purchasing of essential items.
“If you have access to software packages like Xero, use them,” advises Jazz Jhumat, a financial adviser at JJFS.
“Nobody can underestimate the value of regularly undertaking budgetary planning at the current time.”
In ordinary times, such systems are far from an essential.
But at times when knowing the exact cash position of the business is crucial, these software packages can boost IFA firms’ confidence in their future billings and outstanding payments.
Keep the wheels turning
In the same way as software systems can give IFAs an instant overview of their businesses’ cash position, technology can also ensure they can deliver for clients when contact slows down.