By David Kirby, Executive Vice President, Europe & Americas
The Covid-19 crisis has hit the UK economy in ways that a short while ago would seem far fetched. We have all seen the impacts this has had on many sectors and people. The impact for the agricultural sector in the immediate term is varied - depending on factors such as exposure to retail versus trade channels, requirement and availability of labour on farm / off farm, levels of tourism diversification and so on. Each business will have a unique set of factors to consider.
What is clear is that this uncertainty and disruption has brought to the front of mind the need to have an accurate understanding of the businesses capacity to ‘weather the storm’, regardless of whether this is Covid-19 driven or not. At times where there are risks, there is often opportunity. The pivotal factor in businesses that survive challenging times such as this, is their action orientation - facing into the threat, looking at the data and making decisions with those advisers around you.
This is the role accountants and trusted advisors are tasked with in these challenging times - your ability to initiate positive action and to do so with clarity and confidence.
How can advisers be acting at this time?
We are through the initial phase where most advisers will have identified clients most at risk. Support at this point is crisis management - short term cash flow requirements, managing expenses. At the same time most practices are also working hard to get their teams working effectively when under lockdown. Most advisers at this point have focused on providing information to their clients - linking them to government advice, support and sending out newsletters that attempt to collate information that clients can go and view for themselves. This is a useful but passive response, and it’s standard across all sectors.
How many communications have you received from your own suppliers that have added little to no value to your own business situation?
The question is, what comes next? As the bulk of farming businesses, even those without immediate financial challenges, are realising there are likely to be long term impacts of this disruption all are thinking about the future.
The role of advisers is now to be proactive, to show leadership and a strong sense of process that reassures clients. You need to lead by positive action. Our observations from our markets across New Zealand, Australia and the UK are the advisers with the following actions are progressing and positioning strongly:
- Segmenting the client base and using this to offer remote teams real clarity on priorities - triage clients into tiers of risk with contact strategy accordingly.
- Using data to drive decisions - especially easy to do with visibility through Xero & Figured on cashflow positions.
- Empowering team with the tools - bringing software tools quickly into the practice, using the power of the cloud to drive collaboration.
- Leading with a strong process - show clients you know how to help, with clear and concise communication that tells them what you are going to be doing over the coming months.
- Presenting a human face and a proposition - ensure you are talking the language of the customer. Don’t focus on the technicalities of your own response, or the software tool, give the customer a service which helps them feel in better control.
Clients applying for government support through the Coronavirus Business Interruption Scheme will likely need to prepare Balance Sheet, P&L and cash flow projections. They will also need management accounts.
What role can business planning and leaders play?
When this crisis started Figured quickly agreed the best thing we could do is to support the sector through getting our business planning tool into the hands of as many advisors and farmers as possible. We decided to fundamentally improve the access by implementing the Figured Partner Support Programme - upgrading all the base Figured licenses (Lite) to Full Figured licenses (which includes the planning / scenario tools). We’ve done this automatically for all customers, existing or new, without additional charge until 30 June. At that point you can decide what to do next, and we’ll work with you on that.
Figured scenarios is a web-based tool that enables you to build 2-10 year cash flow, P&L and balance sheet projections in collaboration with clients. You can build a simple one in 15 minutes, and it even works without Xero data if the client is on another accounting platform.
During this time we are working to provide exceptional support to get advisers supporting farmers planning on the differing future of their businesses. We’ll work with you to do remote training sessions with your teams, set up your initial farms for you, and work with Xero/non-Xero farms to get planning underway. Our aim is simply to get the sector moving strongly to support farming clients.
We are working now with a range of partners, current and new, to build business scenarios for farming clients. This is a programme we are going to be supporting for a number of months. If you would like more information on how you could support clients, please reach out to us.
“Developing business scenarios in Figured is the quickest way to get to grips with the fundamentals of the health of the business, and to prepare a range of options for the future” - Sam Evans, Kite Consulting
“The Figured scenario tool is a way accountants as advisors can support their clients in these difficult times. The cloud collaboration means you can do this from your home office, and work with farming clients to really understand what risks and opportunities lie ahead” - Gary Brockway, Head of Sectors, Baldwins Group