Accountants are helping their clients find the right funding options and referring them to external providers. Research1 from business finance company MarketInvoice reveals that UK accountants are most likely to refer their clients to banks, with invoice finance as the second most popular lender of choice.
Two thirds (66%) of accountants surveyed said that they do recommend external finance providers to their clients. Whilst these recommendations will be based on the need of any given business, they also indicated their preferred source of funding. Half (50.8%) indicated that they would recommend their clients speak with a bank about their finance needs. Interestingly, more than a third (36.3%) are recommending an invoice finance provider ahead of a business loan provider (33.66%).
Tom Davenport, Head of Strategic Partnerships at MarketInvoice, said: “This research reveals that accountants are stepping up and advising their clients about funding opportunities. Additionally, we have observed that forward-looking strategic accountancy practices, also, have in-house business finance specialists advising clients on funding options. This research also dispels the myth that invoice finance is a last resort for businesses; accountants are clearly acknowledging the vital role it can play in helping companies manage their cash flow needs.”
There are some hurdles preventing accountants from referring their clients to external finance lenders. The majority (36%) of accountants who do not currently refer their clients cited a lack of understanding of the different finance options as the main reason for their reluctance. Others (19%) indicated the time and cost burden in sourcing the appropriate options, whilst for some (18%) it was the potential administrative stress in managing the relationship between a potential lender and their client.
Ed Berks, Business Platform Director EMEA, at Xero commented: “This research presents some fascinating insights. It’s great to see accountants using a variety of funding options for their clients, but the opportunity to provide more value here is significant. For accountants to remain relevant, they need to learn more about the funding options available to their clients. Through partnerships with leaders such as MarketInvoice, Xero remains committed to supporting such learning”.