Why your choice of Accountant matters

20th Feb 2017

The finance landscape has changed and continues to change rapidly and therefore finding finance is no longer as simple as calling your local Bank manager.

In spite of how clever and technologically driven new funding providers have become, they still want to see the same information.

What hasn’t changed is the requirement to undertake an assessment of the business. Recently I found one of my old Bank training manuals and found a sheet based on the term PARSER which is still used by lending institutions as a reference to what information they require.

In Summary:

Person – Know the borrower
Amount – How much and why are the Company borrowing. Will it add value/generate and income
Repayment – How will the borrowing be repaid
Security – This is a safety net only. Can it be valued, can legal title be obtained
Expediency – Why are we the lender providing the monies
Renumeration – Do the fees match the risk
Services – What else can we sell.

What has this got to do with your Accountant?

As I mentioned above lenders want answers to the above and to answer these questions they need financial and non-financial information.

The financial information is where your Accountant and accounting systems are key in providing accurate and timely information.

The benefits are that you make informed choices for your business and a lender or broker can get better terms and conditions when you require finance. Depending on the funding you require I have listed financial information, which lenders look for.

  • Annual accounts
  • Management accounts
  • An up to date list of aged debtors and creditors
  • An up to date asset register detailing the identity of the asset, those assets subject to finance agreements, and the finance outstanding
  • Details of the last 3 months Bank statements
  • Details of the last 2 quarters VAT
  • Cash flow forecasts

Choose an accountant who understands your business and can produce the information you require to run your business. Then choose a Commercial Finance broker to obtain the best terms and conditions for your funding requirement.

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