Giving Clients a Financial Health Check They Really Understand

Business owners are busy, so finding time to actually review their business finances in enough detail to understand everything properly isn’t easy. They might think they’re on the right track, but things aren’t always as they seem.

In the hectic world of day-to-day business, it’s easy to let things slide (we’ve all been there!) It’s just one of the reasons why checking the financial health of a clients’ business in a way they actually understand is so crucial.

What is a financial health check?

As an accountant you probably send your clients some form of financial reporting already. Sometimes known as management accounts, these give businesses an overview of what’s happening to their business in financial terms.

But – and it’s a big but, do your clients understand what the numbers mean? The whole purpose of these reports and checks is that your client gets the information they need to make better decisions.


Beyond compliance checks, the health audit is a chance to help your clients identify inefficiency, make improvements, take advantage of any relief, and ultimately, save them some money. Financial health checks are an essential part of business growth, helping businesses to be more tax-efficient, compliant, and money-savvy.


Why a financial health check is just as useful for accountants as it is for their clients


A financial health review allows you, as their accountant, to find out what your clients’ future plans are for their business. Maybe they plan to take on a new site or hire more employees; a thorough financial health check can basically tell them whether they can afford it, and what needs to happen to get there. For you as a business yourself, it’s also a pretty good time to show them the role that you’ll play in their growth.

What should a financial health check include for a business?

The whole point of a financial health check is that it not only shows your client where their business is now, but the direction it’s heading in. What will happen if they carry on as they are? Does it align with where they want to be?

As their accountant you might offer an internal audit service which includes:

  • Supporting clients to help them comply with reporting standards and financial management regulations. Are their existing processes working for them?
  • Generating easy-to-understand, transparent reports that give a clear picture of the company’s financial position right now.
  • Showing them where they may have old or inaccurate data that could harm their business.
  • Making action plans that help minimise financial risk, as well as building on potential.
  • Offering strategic feedback about managing their business finances in future.
  • Helping identify future challenges.

Explaining the importance of financial health checks and internal auditing

For owner-managed businesses, financial health checks can feel like just another thing to squeeze onto the to-do list. But it really is so important, so you might want to emphasise how crucial regular mini audits are, and encourage them to carry them out. Explain everything clearly and in detail to help them understand the benefits.


What to tell your client:

A thorough financial health audit will help with transparency, HMRC compliance and general business management. It can also help you to attract investors.


Business investors and shareholders want to see evidence that a company is successful. If your client is looking to secure a bank loan, banks will also expect to see evidence as security.

Financial checks bring all your client’s data up to date, and show that the business is realistic and sensible about ongoing growth and realising potential.

“Turnover is vanity, profit is sanity…”

It’s an absolute classic, and every accountant knows it. Lots of sales and cash coming in doesn’t always mean the business is doing well. Does your client know? The fact is, without a financial health check your clients’ business could be haemorrhaging money without them even noticing.

If their financial management hasn’t been brilliant for some time, they could well be overspending and have lots of unnecessary outgoings. Financial health checks mean they’ll be able to see exactly where their money is going, and think properly about whether it’s essential – or just habit.


Know your audience

As an accountant you’re used to accountancy language. Day in, day out, you’ll likely use technical language, particularly when talking to colleagues, and it has probably become second nature.

All those acronyms can really move things along, but only if you know what they mean. Of course, jargon has its place. But it’s important to ‘know your audience’ and be aware of the language you’re using.

Essentially, your client hires you to know this stuff. If they don’t understand the terminology and language that keeps cropping up, you’re likely to confuse them, and probably annoy them too. Keep to plain English where you can.

Only use jargon when absolutely necessary

When speaking to clients, it’s all too easy to slip into the accounting lingo. Although many of your clients will have at least a basic grasp of bookkeeping and tax terminology, some will not.

Keep it simple, and replace the accounting terminology with terms that everyone understands, but beware of a patronising tone! We don’t mean talking down to clients (actually it’s quite the opposite) – we just mean try to explain what everything means.


Make sure you include topics your clients find important

If you’ve ever spent time with a small child, you’ll know they talk – a lot! Usually, it’s about all manner of subjects that aren’t of any real interest to you but that mean a lot to them. But if you actually take the time to engage with the child and listen properly to what’s important in their world, you’d be surprised what you can learn and understand about them.

Your client wants to feel like you’ve really listened and heard what they’re saying. You can be more helpful if you know their side of the story.


For example, if the first thing to jump out at you is their diminishing bottom line, this likely makes you want to discuss cutting costs and becoming more efficient as a matter of priority.

But your client, however, wants to discuss their plans for hiring several new employees. To you, the idea of them taking on new staff seems crazy, especially if the client is already haemorrhaging money. But try to see it from your client’s point of view.

If your client expresses an interest in hiring more employees, don’t immediately shoot them down. Instead, try to find out why hiring is so important right now. Do they have a big contract coming up? Discuss their workflow and future plans – there might be important information they didn’t realise was useful to pass along.

See this as a chance to learn more about your client and their business. Even if you totally disagree with the path they’re thinking of taking, it’s important to listen to their reasoning – and clearly explain your own.

One final tip: Understand the language your clients use too

As part of learning all about your client, their business and the industry they operate in, it’s well worth also learning your clients’ vocabulary. This is especially the case if their business is very niche, with lots of terminology of its own.

Try to use the language of your clients’ business wherever possible. It will help you relate to them, and establish a good long-term relationship with them and their industry. They’re more likely to trust and respect you simply because you’re talking their language.

Learn more about what Pandle can do for you and your clients.

James Carver

Qualified to AAT level 3, I'm currently studying towards level 4. An experienced bookkeeper, I also enjoy playing golf, football, and running.

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