Half the firms entering the Practice Excellence Awards last year (PEA15) offer management information as part of their service for business clients – up from 33% in 2014. One reason for this jump is that the approach has been shown to have a very beneficial effect on client satisfaction and practice profitability. Probably because it serves a fundamental client need.
Businesses with a poor grasp of management information are going to be at a disadvantage. Entrepeneurs are not always well versed in financial matters and if they lack these skills they may lack the knowledge they need to stay in control of their business.
Until they reach a certain size, small firms are not able to afford £30,000-£50,000 a year for a trained accountant to handle their management and financial reporting. This gap has existed for years. Now that online accounting tools make it possible for external accountants to oversee the accounting journals and reports, we have witnessed a surge in financial management outsourcing among small businesses and the accountancy firms serving them.
Those fast-moving entrepeneurs may also be so caught up in the rush of day to day demands that they don’t have the time to sit back and reflect on what their financial numbers are telling them. The virtual FD can step up to fill that strategic void, and help the business plan not just for the short-term, but for the future.
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