Small businesses are fighting for survival and they need relevant tips, advice and guidance. They don't have time to find out what they should know. Here's how Accountants, Advisers and Business Support service providers can really make a difference to their clients.
Save me TIME!
Knowing which email to take a look at in the deluge of 'information overload' we all get every day is an important skill. The phrase, "trying to drink from a fire-hose" comes to mind. I'm happy to say that the emails from our accountant have been ones that I do take note of. They have sent us useful pointers about the support is available to us during lockdown and offered to help. It's made a real difference: Not only the advice itself, but the speed with which I can get to what I need to know and decide what action I can take.
Proactive alerts to keep us safe and one step ahead
Ideally, the systems businesses use should spot risks and opportunities and alert their owners. Alas, that doesn't always happen. Accounting systems may 'see' that a customer is late paying you, but the system may not send an alert. And it almost certainly won't spot the fact that said customer has a deteriorating payment performance, falling credit rating, or worse-still, have entered Administration...
Just as bad as no alerts, are too many.
Context and next best action
According to Gartner, in order for threat intelligence to be helpful, we need to aggregate what we are seeing, enable the recipient of the information to understand what the alert is saying in the context of other information and formulate options or actions to take.
In my mind, there are two levels to proactive business alerts:
Level 1 - Help businesses be aware of standalone opportunities and risks
There are a number of 'vital signs' that businesses (or their advisers) can monitor:
- Financials - Company credit score, cashflow, balance-sheet health
- Security - email breaches, 'loop-holes' or weakness in domain security increasing the risk of phishing attacks or email 'spoofing'
- Clients and Suppliers - Their financial health, customer review scores, news, security risk
- People - Absence levels - higher than normal or people not taking the time-off that they should? Training being completed (or not done at all?)
- Reputation - Poor customer reviews or declining ratings
- Compliance - Filing Accounts, Confirmation statement, Cyber Essentials certification, Insurance renewal
Some of these metrics will only be available to the business itself. But many of these metrics are publicly available and can be monitored remotely. One could say it's an Adviser's obligation to monitor their clients. For many, it's now a regulatory requirement to take a 'whole-company' assessment to comply with MLR17 (s.18).
Sound a bit intrusive and 'big brother'? Maybe. But let's face it: Advanced supply chain teams monitor this stuff and for a supplier, it can be the difference between winning a contract or losing it.
How the world sees us is becoming increasingly transparent. We either shrink to obscurity or make sure our public profile is where it needs to be.
Level 2 - Joining the dots
This is where it gets smarter. Monitoring specific metrics in isolation is a very one-dimensional view of things: A higher level of absence from employees may not be that insightful on it's own, but combined with the knowledge that customer review ratings are dropping and training isn't being completed should set off a number of alarm-bells that something really isn't right. As HR Professional Karen Felton found with one client:
"One of my business leaders was concerned about their absence rate.
I analysed their data and found 30% of absence was mental health followed by colds, headaches and stomach problems; and when these absences were recurring they were often followed by mental health absences. So I went to talk to people to learn more about this and found:
❤ People leaders weren’t confident to manage mental ill-health in their teams
❤ Team members didn’t feel supported by their leaders or colleagues when it came to their mental health; so often they took short absences reported as colds, headache or upset stomach.
This led me to:
✅ Design and deliver mental health awareness training for people leaders
✅ Coach people leaders to talk with their teams about what support was needed and available, both in work and when they needed to take time off
✅ Create a wellbeing intranet site to signpost resources and for people to share their stories and support each other
✅ Facilitate mental health awareness conversations for teams"
A property flood restoration business we work with depends on 19 sub-contractors to provide national coverage. At times of peak demand, there is the real possibility that these sub-contractors cannot cope with demand, which would impact service levels for the prime-contractor. By understanding the amount of business being placed with a sub-contractor and monitoring how close to capacity they are and what proportion of their total business their work represents, they are able to improve capacity planning and manage surges in demand. Monitoring the customer review ratings of these sub-contractors can provide useful lead-indicators as to whether the company is becoming stretched.
Spotting the gaps
When it comes to business insurance, it's a travesty that over 60% of UK businesses have the wrong insurance cover. Either they are paying for more cover than they need or they are under-insured, which means in the event of a claim, they may not get the compensation they expect or need.
By monitoring a client's financials, increases or decreases in payroll, profit or turnover; an adviser can flag to the client if insurance cover may need adjusting. 'Switch-on and Switch-off' insurance cover is now here for car drivers and students. The same is coming for commercial insurance, but it won't be done manually (businesses haven't got time for that), it will be automatic. An insurance policy that automatically adapts as your business changes meaning they only pay for what they need, when they need it? Sign me up!
Bringing it all together
So, we've got a collection of metrics and data feeds, all we need now is an army to make sense of it all! Sure, big companies have people and departments that do this: Analyse the data, talk to people, chew things over in management meetings - often supported by experienced and very capable specialist advisers. However, small businesses don't have this. 73% of businesses don't have a qualified accountant on the pay-roll. How many have trained HR or People professionals on-hand to help see what's really going on?
Supporting the Accountant
Many small businesses depend on their accountant. But there is only so much an accountant can do with the time they have for each client. This is where 'digital assistants' that help the business and the adviser can be so powerful: Unlocking new insight and saving them time.
The next generation of 'digital assistants'
As more and more consumers are turning to personal finance apps to help them manage their spending and saving, we will soon start to see the same capability emerge for busy small businesses. Monitoring key metrics, 'joining the dots' and generating relevant insights and alerts.
Connecting clients and advisers
In a connected world where data works in service of the client, amazing things are possible. Xero accounting software already enables a business and their accountant to collaborate, reducing work for both parties and having finances in-sync, in real-time. As other apps enter the client's 'circle of trust' and connect with this eco-system, so the amazing potential of 'AI' and 'Augmented Intelligence' can really start.
At Brisk we are working hard to bring this together - to save businesses time, help their advisers anticipate need and serve their clients better. Ultimately, we want to help prevent bad stuff from happening and make insurance 'smart'. There's a wealth of data out there, and our technology is helping businesses and their advisers and accountants harness it.
And it's not all about 'risk' - occasionally we spot where a business could actually save money as well...