An inch wide and a mile deep understanding is important

The changing market conditions that all businesses are now encountering have highlighted the need for key financial advisors to SMEs to develop a broad understanding of the business. This is becoming known as “an inch wide and a mile deep” understanding of the business so that they are in an enhanced position to perform a “key financial role for the SME business” – “virtual Chief Financial Officer.”

It is important for someone who is advising the owner/leadership team on a wide range of commercial matters to have this kind of in-depth knowledge, in order to assist their businesses “scale up” and achieve their vision. Accountants preparing just the annual financial accounts and income tax returns will rarely be able to obtain this kind of in-depth knowledge, as they are not necessarily contained within the tax return preparation.

The requisite for offering a broader range of services starts with the “business journey analysis” which includes:

• Meeting with the leadership team – what is their vision?
• Review of the current business plan.
• Identifying where the business process commences and reviewing how that process operates – ordering of supplies – who are the major suppliers – what are their terms of payment – are there likely to be any supply chain difficulties that could affect the financial performance of the business?
• What are the energy requirements – what additional cost might be incurred because of government changes?
• What type of management reports are prepared daily, weekly, monthly?
• Are the regular KPI reports compared to previous results to determine reasons for any variations?

Towers Business Development (www.towersbusiness.com.au) undertakes in-depth business reviews to gain knowledge on the operations of a business so that advice can be given to assist the business in achieving its vision.

If you would like to have a confidential/complimentary chat with me about the services that could be provided, don’t hesitate to call me on 1800 232 088 or send me an email .