"With the expected demand for the Government Guaranteed Loans (we’ve already completed two) we can use forecasts to show the expected impact of COVID-19, when they can return to normal cash levels, and the fact the business is viable."
David Waine, Founder/Director from Matley Limited, talks to us about how the Matley team are helping clients during this time, and how using Spotlight Forecasting allows them to go beyond the “back of the envelope” forecast and support a large number of clients.
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To get us started, why don’t you tell me a bit about Matley and what you do (or your role)?
Matley was founded on the premise that accountants need to go beyond the numbers and focus on using the numbers as a tool for growth. The practice was founded in October 2006, and this client-focused approach is still operating within the five offices that exist around the country. We take a flat approach so clients can deal directly with the staff that know their file and circumstances, so they can get quick and efficient advice.
How are you and your team helping clients during this time?
When the COVID-19 wage subsidy was announced, we commenced filing the wage subsidy applications on behalf of clients for free, and provided on call advice to explain what the impacts of the close down will mean on their business. We have been posting regular blogs on our Facebook page and website to keep clients informed.
What were some of major pain-points of your reporting and/or forecasting process prior to using Spotlight Reporting?
I hate Excel spreadsheets. You make one change and then you can spend hours trying to track back to make sure that there are no errors. You would make a calculation error and that gives a very different outcome (we all remember the infamous Treasury error in a spreadsheet that changed the Government's projections a few years ago!). I need to trust the numbers to make decisions and, while I can apply a sense test, I need reliable data to advise clients.
There is also the old saying, "analysis equals paralysis", and the numbers all looked good, but when we spoke to clients you could see them reflecting on what their weekend fishing would be like... Now we have graphs and trend lines, and I have found clients now talk to me about what they mean.
With the expected demand for the Government Guaranteed Loans (we’ve already completed two) we can use forecasts to show the expected impact of COVID-19, when they can return to normal cash levels, and the fact the business is viable. The efficiencies that will be gained through this process and the assumptions that will be listed will be invaluable in allowing us to support a large number of clients in a short period of time across the team. The professionalism in the way reports are presented also gives the bank confidence that it’s not just a “back of the envelope” forecast.
What has your experience been like using Spotlight Forecasting?
When not using Xero or MYOB, there are some difficulties with forecasting, but there are ways around it. The best tool that forecasting can give is a rolling 12-month cash flow that aligns investment decisions into the business at certain points and can align the numbers to the business strategy. We've also used it to assist major capital decisions for businesses (we used it to support an investment into a $650K piece of equipment for a client) as we can reflect back on the forecasts as part of the monitoring process on the investment decisions. We also use the the forecasting tool in part of our M&A activity in supporting lending with the banks for finance as it provides an integrated P&L, Balance Sheet and Cash flow.
"We've also used it to assist major capital decisions for businesses (we used it to support an investment into a $650K piece of equipment for a client) as we can reflect back on the forecasts as part of the monitoring process on the investment decisions."
When it comes to preparing forecasts for your clients, do you secure regular engagements or is it more 'one-off' project work?
We use forecasting for clients when we're evaluating business investment decisions and M&A activity. These are more project based. We've introduced forecasting in cash difficult clients and non-profit companies where it's important for owners/governance to understand their cash needs on a 12-month basis. These are more regular client engagements, so it’s a mixture.
By using Spotlight can you measure any increases in revenue or growth, or time-saving?
Using Forecasting for regular cash flow forecasting helps save time and reduces errors. For one client we charge a $100 monthly fee for their forecasting and it saves around 2-3 hours of time each month to make sure that the data is correct and doesn’t contain errors. We also update the Xero budget manager so when it comes across into the system, we have already tweaked the next financial year's budget, which saves time for the client reviewing it.
What forecasting and/or reporting features do you enjoy the most, and which features make yours and your teams’ jobs easier?
We use the reporting quarterly to discuss with clients their performance and trends, and can then add these into the forecasting models to show what the next 12-months look like. We also use the forecasting tool to then model the budget and then monitor the performance back on actuals in graphical form.
What would you say to someone who’s looking for or shopping around for a reporting or forecasting tool?
KISS – the simplicity of the presentation is key. Make sure it provides the key information to make the decisions, it's also easy to use for a technophobe (like myself). The package of Spotlight Forecasting and Reporting together is an easy sell to clients, and we incorporate it into our management packages which we don’t charge for directly, but can add value and sell our time, rather than the product. We also have picked up three VCFO roles through the use of Spotlight, where we provide advice to the company but are not the compliance accountants as they see value in going beyond the numbers.
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