Are accountants the greatest barrier to business growth?
No doubt we’re preaching to the choir when we say that the challenges in the credit business are growing. There is a natural squeeze on payments from crafty payable managers. There are supply-line difficulties due to man-made conflicts and climate changes. Toss in the pandemic that just won’t seem to quit, and we’ve sure got our work cut out for us in risk management. It is always a battle with TOS (The Other Side), Sometimes friendly, others – not so much, but what about when our most difficult challenges maybe one of our team – or even another professional – the accountants?
We need to acknowledge that the credit management specialist are not an accountant or tax expert, nor are most accountants credit management specialists (unless they have a specialist credit management division in their practice). It’s having that understanding on where those lines converge and that accountants should be more open to work alongside credit management specialists says Tracey Westell FCICM
She continues with her analogy to appease those accountants reading this.
‘We work in the same garage. Accountants deal with the vehicles dents and scratches, the mess of the interior of the past 12 months of the business moving. They respray, panel beat, wash, and polish this vehicle, making it look like new as it starts its new year’s journey.
Credit management gets under the bonnet – it looks at what mileage it has done, where its planned journeys are for the year, and ensures the engine, and all the mechanics of the vehicle work and will get it to that destination with more fuel in the tank than it needed.’
I had the great pleasure of sitting with Tracey and a few others in the profession at a special round table, held on the day after the World Trade Credit & Collections Conference in Dublin last October. Their passion is for us to raise the bar of knowledge and expertise in our credit business and that includes more than just the immediate members of our credit team.
Tracey is one of the founding members of Pecunia 2016 Ltd, with one goal in mind, to help businesses understand the importance of good credit management from the front end right until the debt is paid, or not. Bringing credit and cashflow management as well as order to cash processes to the core of a business, along with training and upskilling those that are looking after this precious commodity to be the best credit controllers and managers you have ever had, with the interest of the business security, growth, and profitability at the fore.
Credit management has previously been banished as a back-office function to the detriment of a number of businesses. However how can this be the case when credit control and management are the foundations of your business, they look after the key asset all businesses have – their aged debt!
If you cannot show you can look after this most valuable asset, then you are always going to struggle with cash flow and debtors.
However, investing in your asset, bringing Credit Management to the ‘front office’ and even to the board room will give you the ability to acquire decent funding, investment, be credit insurable, improve your credit score, and not be deemed a risk.
Tracey also told me there are five ways our accountants can be our biggest challenge to help businesses be credit management secure.
- Most accountants, when I ask, tell me that they do what credit managers do, hence the above analogy of the garage. When I break this down, they realise the value we bring to the table, forward thinking accounts aways want to partner with us.
- Most accountants have the perception of not wanting to share their clients. It’s not about sharing, it’s about collaborating, giving their clients the best opportunity for growth, success, and stability. This in turn will help gain better fees and happier, scalable clients for the accountant moving forward.
- Many accountants I spoke to during covid didn’t truly understand their own practice’s ‘tipping point’ How many clients can they lose before their own practice/business is severely affected?
- Many accountant practices don’t even have their own credit management policy and process in place. If they do, they have not updated it, even reviewed it during/after covid. Practices are notorious for not being complicit to their own credit management policies, if they even have any? Having worked in practices, I know this to be the case.
- Accountants should look at the credit management specialist in a few ways
i) we are their best friend when getting their own practice cash flow in order which allows for their own positive growth.
ii) their most trusted partner in doing the heavy lifting when it comes to getting their client’s business and cash in order.
III) we need to be collaborating with accountants sooner, in order to ensure their client takes every opportunity to scale and future proof their business.
iv) we are the ‘buffer’ between accountants, and an insolvency practitioner.
So, all in all we need to work together, share our skills with the most important people we work for – our “clients”. These businesses and their employees, which are mostly small to medium businesses need our guidance. Remember these are the most important businesses in our economy, regardless of what industry they are from.
*RASIE THE BAR – HIGH- KEEP IT THERE!
If you have receivables and want to improve your cash flow, training ALL the members of your own team is the most effective option. Perhaps you would like to bring in Tracey and her team at Pecunia
 That would be the ‘hood’ for those of us in North America.
A founding member of Pecunia 2016 Ltd, Tracey has been working in credit control for nearly 30 years. She is a Fellow of the CICM, Vice Chair for the CICM Kent Branch and awarded the Meritorious award in 2020 for recognition of outstanding contribution in Credit Management.
One of our heros is a tattooed accountant. If you don’t know what a tattooed accountant is, check the story!
Raise the bar – high – keep it there!
If you have receivables and want to improve your cash flow, training ALL the members of your own team is your most effective option. Perhaps you want to bring in Tracey and her organization at Lecunia? Maybe me (Tim Paulsen) or one of our excellent instructors from ICPC (International Centre for Professional Collections). You will not regret the decision.
If not us, your next training session may be with an insolvency team.