By Mark Brown, Director, L4 Financial
Most established businesses already have an accountant. Annual accounts are prepared, tax returns are submitted and payroll or VAT may also be dealt with. The essential compliance work is being completed.
Yet many owners still lack the financial visibility needed to run the business confidently. Forecasts may be unreliable, management information may arrive too late and decisions around recruitment, pricing, investment or funding may be made without clear financial analysis.
This does not necessarily mean the accountant is providing a poor service. More often, there is a gap between the support being received and what the business now needs.
Compliance serves an important purpose
Annual accounts and tax returns meet legal obligations, provide a historic record and help ensure the right amount of tax is paid. However, they are mainly concerned with what has already happened.
By the time they are discussed, the business may be several months into a new financial year. Sales, staffing costs, margins and cash commitments may all have changed.
Which customers or services generate the strongest returns? Are higher sales producing more cash? Can the business afford to recruit? What will the cash position look like in six months?
These are commercial decisions requiring current information, forward planning and regular discussion.
Assess the support objectively
The first question should be: what has the accountant actually been engaged to provide?
A business paying mainly for annual accounts and tax compliance should not automatically expect monthly reporting, detailed forecasts, regular commercial meetings and ongoing challenge around major decisions.
Where wider advisory support has been agreed, it is reasonable to assess whether it is being delivered consistently.
How often is there meaningful contact during the year? Are meetings planned or only arranged when a problem arises? Do discussions cover future performance and cash flow, or mainly historic results and tax?
Limited contact does not automatically mean the accountant is at fault. The original service may simply no longer match the needs of the business. The answer may be to clarify responsibilities and add the missing support.
Project or retained support?
Some gaps can be addressed through a focused project, such as building a forecast, reviewing margins, improving management information, preparing for funding or introducing a better accounting system.
A project works well where the requirement is specific and the business can maintain the improvements afterwards.
Ongoing support becomes more relevant when issues keep returning. A forecast soon becomes outdated if nobody maintains it. A reporting pack has limited value if results are not reviewed and acted upon. Identifying a profitability issue is only the start; someone still needs to support the decisions that follow.
Retained fractional Finance Director support should not simply mean producing more reports. Its purpose is to create a regular process for understanding performance, testing assumptions, identifying risk and turning financial information into action.
For many SMEs, the strongest structure combines bookkeeping or an internal finance team, an external accountant for compliance and tax, specialist input where required, and ongoing FD-level support for reporting, forecasting, projects, and commercial decisions.
These roles should complement each other. Problems arise when the owner assumes an important area is being covered when it is not part of anyone’s role.
Financial support should evolve with the business. The arrangement that worked at an earlier stage may no longer be enough.
The real question is not simply whether the annual accounts are accurate. It is whether the business has the financial support it needs to make better decisions now.
L4 Financial Management
L4 Financial provides fractional Finance Director and board advisory support to growing SMEs. Mark works with owners and leadership teams to improve financial visibility, strengthen decision-making and ensure the finance function supports the next stage of the business.
Mark@L4Financial.co.uk
L4Financial.co.uk | 07960 031554