Table of contents
Table of contents
Budget management can seem straightforward – in theory at least. But explaining it to clients, and helping them work out what they will need and when, isn’t always easy. As accountants and bookkeepers, it’s not just about crunching numbers – it’s about guiding clients to make good financial choices for long-term success.
Whether you’re working with small business owners, freelancers or larger companies, we’ll show you how to break down budgeting in a simple and practical way. Let’s take a look.
The first step is to explain why your client even needs a budget in the first place – even if they think there seems to be plenty of cash floating about or coming in.
A clear budget helps clients plan ahead and have funds in place based on what they realistically expect to happen in the business, and what they would like to happen.
How much does the client need to spend, what can they reasonably expect to earn, and what plans do they have which might require additional funding?
Tracking income, expenses, and savings goals gives a better picture of business finances. With this knowledge, they can make informed decisions about where to cut back and where they can splurge a bit. It’s about empowering your clients to take charge of their financial situation – this is where your clear, plain approach can really help.
Financial uncertainty can be super stressful! Without a budget, it’s easy to live from one pay day to the next and struggle with bills or savings. A budget brings structure and predictability, easing your clients’ “how will I make ends meet?” moments. When you know your spending and saving limits, you’re more likely to feel in control and less stressed.
Budgeting isn’t just about covering expenses; it’s about reaching goals. Whether paying off debt or investing in a business, a budget acts as a roadmap. It helps clients allocate resources effectively, keeping them motivated and on track to achieve their objectives. Make sure they know this!
We all have moments of weakness when it comes to impulse spending – and it’s no different in business. A solid budget helps clients set clear spending limits and encourages smarter decisions. It separates wants from needs and keeps spending in check.
As an accountant, you can guide clients to spot unnecessary expenses and save where it counts, helping them stay on top of their long-term goals.
Life is unpredictable and sometimes clients will face unexpected expenses. A good budget includes setting aside money for emergencies, which is crucial to handling these curveballs. Without a budget, clients might find themselves scrambling to cover surprise costs, potentially leading to debt or financial instability.
You can help them set up an emergency fund as part of their budgeting process, so they’re prepared for whatever comes their way.
A well-maintained budget isn’t just for the short-term; it’s a tool that ensures long-term financial health. By budgeting consistently, clients can grow their savings, manage debt effectively and build wealth over time. You can help them plan for retirement, invest in their future or create a financial legacy for their families.
As an accountant or bookkeeper, you know financial reports are key to understanding a business’s performance. They help with decisions, funding and smooth operations. But for clients, they can feel like a foreign language! Here are a few tips to explain them more clearly.
The balance sheet is often seen as the “big picture” financial report. It’s like a snapshot of a business’s financial health at a specific point in time. It shows three key elements: Assets, Liabilities, and Equity.
When explaining this to clients, try to put it simply: “The balance sheet tells us whether your business is in the green or red, by showing what you own versus what you owe.”
This report is key for understanding solvency and liquidity. If liabilities outweigh assets, they might need to rethink how the business is managing debt.
Next up is the income statement, also called the profit and loss (P&L) statement. This shows the revenue and expenses of a business during a specific period.
It also helps track things like gross profit (money left after the direct costs relating to the sale) and net profit (what’s left after all costs).
“This report shows whether your business is making or losing money and helps us see if you’re on track to hit your financial goals.”
If you’re working with a client who’s more of a “big picture” person, they’ll want to focus on net profit. But for clients who are managing the day-to-day, focusing on expenses and profit margins can help them optimise operations.
Cash flow is the lifeblood of any business. It shows how cash moves in and out of the business, breaking down operations, investing activities and financing. It’s vital for understanding liquidity – basically, whether there’s enough cash on hand to cover bills.
“This report shows the actual movement of cash. If your business is making money but cash is still tight, this report will show why.”
For clients, this is often the most eye-opening report. They might think their business is doing well, only to discover they’re running low on cash. A good cash flow statement helps spot this early, so they can do something about it.
Forecasting cash flow helps them prepare for the bills they know are coming up, such as paying wages and suppliers.
Now this one can be a bit more abstract, but it’s important. As a reminder, the statement of changes in equity shows changes in the owner’s equity over a particular period. It includes things like additional investments from the owner, profits or losses and any withdrawals. It’s great for clients who are closely tracking their business growth.
“This report shows how much of your business you actually own after factoring in your investments and withdrawals.”
The key really is to put yourself in your clients’ shoes. Avoid jargon and any extra information they don’t really need. With a bit of support, you can help your clients reach their business goals.
Learn more about using Pandle bookkeeping software with your clients.
A degree in Astrophysics means I have a head for numbers! Outside of Pandle HQ you'll find me writing music (and spending too much money on guitars).
Create your account today, and decide what to do with all the extra time you get back. We hear Pilates is popular.
Live chat support
No card details required
Making Tax Digital compliant
