Accountants could hold the key to ensuring SMEs with growth potential unlock the finance they need to move forward.
That’s according to Lloyd Powell, Head of ACCA Wales, who says that a good accountant is now doing far more for their clients than simply payroll and accounts.
“ ACCA’s ongoing research shows small businesses are having problems accessing finance and British Business Bank research tells us that SMEs in Wales are using less finance than their counterparts in Scotland and Northern Ireland,” explains Lloyd.
“They also tend to rely on more traditional sources of finance such as bank loans, overdrafts and even credit card borrowing.”
He believes that accountants can play a pivotal role in ensuring that businesses with growth potential are aware of different finance options, and are ready to access the finance they need at the right time.
Lloyd describes this as a ‘mindset shift’ which sees an accountant moving beyond their traditional compliance functions to act as trusted advisors, building relationships with their clients and knowing their businesses well.
This role is particularly important as businesses seek finance for a variety of reasons, from investing in new facilities and technology to managing cash flow. As Lloyd notes, accountants are well-placed to help businesses plan their financial strategy.
“Accountants can support business planning, cash flow projections, and even the funding application itself,” he says. “They’re there throughout the process, helping with the application and supporting businesses in monitoring how funds are being used.”
One of the key benefits an accountant brings is helping businesses prepare for the funding application process. A clear business plan, backed by financial statements – including, profit and loss accounts, balance sheets, and cash flow projections, – is crucial when asking a financier to back the business .
“It’s essential to show a track record of financial health and a well-thought-out strategy for growth,” Lloyd emphasises.
Once the finance is secured, the accountant’s job doesn’t end. They can continue to monitor how the funding is used, ensuring key performance indicators are met and providing regular reports to lenders and other stakeholders.
For some businesses, particularly those without in-house financial expertise, an accountant can act as a ‘fractional CFO’, offering ongoing financial oversight.
“They can help businesses meet their reporting obligations to lenders or investors and support them in managing their growth,” adds Lloyd.
While banks remain a key source of finance, they are not the only option. Accountants can help businesses explore a wide range of financial products, including asset finance, invoice financing, and even crowdfunding.
“We’re fortunate in Wales to have the Development Bank of Wales, which provides a range of funds for SMEs, as well as the British Business Bank funds for Wales,” says Lloyd. “It’s important for businesses to understand that there are many different finance options out there.”
Accountants can also offer valuable guidance to businesses that may otherwise struggle to secure finance. Early-stage companies, those with intangible assets, or businesses in high-growth sectors can find it difficult to meet traditional lending criteria. Additionally, under-represented groups such as female founders and founders from ethnic minority backgrounds may face additional barriers.
“Accountants can support these businesses by helping them prepare thoroughly and by providing access to a broader range of funding options,” Lloyd notes.
As digitalisation transforms the accounting profession, technology has automated many transactional tasks. This shift allows accountants to focus more on providing strategic advice, helping businesses grow and access the finance they need.
“The practices that have embraced this change are spending more time with their clients, understanding their business operations, and offering valuable advice,” says Lloyd.
Ultimately, a good accountant is more than just someone who produces financial statements – they are a trusted and strategic partner, Lloyd notes. Whether by helping businesses prepare for growth funding, navigating alternative finance options, supporting them through the application process and monitoring performance after the funding has been received, accountants play a vital role in enabling businesses to grow and thrive.
