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How accounts filed impact small business opportunities

Ollie Maitland Jun 07, 2023

The impact of the millions of accounts which are filed every year continues to impact small businesses opportunities. 

By being both retrospective and thin on the ground for the majority of small businesses, their filed accounts will not be putting their company in the best light for financial services and the credit bureaus.

There are however steps our accounting partners are taking to contribute more recent, and often better, financial statements to drive better outcomes.

What do credit scores, credit ratings and limits impact?

The impact of a credit rating and credit limit on a business

A credit rating is a rating for a shorter period of credit, typically trade credit from suppliers. A credit limit is usually for a contract limit over a longer period. Both of these impact the available credit for a business through various credit facilities. A larger number can have a dramatic impact on the amount of working capital available to a business.

For example an increase of £10,000 on the credit rating across 10 suppliers could unlock a theoretical £100,000  (100 x £10k) of zero percent 30-90 working capital. A reduction would of course have the reverse impact.

The impact of a business credit scores change

Credit scores are broadly a hurdle for businesses to get over and give an indication of the probability of default.

A higher score means a lower probability of default and therefore a lower credit risk. 

Lending typically only starts at around a score of 50-60, so if a business falls below this, then they may be outside of the lending criteria.

Credit scores also impact the way other businesses view a business. The lower the credit score, the less stable the business may come across.

How can you help your clients improve thier credit score, limit and rating?

Step 1: Upload your client to Monitor.

By uploading your client to Monitor you can see their business credit score and identify any changes to that score.​

Step 2: Invite your client and optionally assign a licence

Next, invite your client to Capitalise so they can access their full credit score. If you have client licences as part of your package with Capitalise then you can assign a licence on this step or alternatively you can invite your client in to receive a 25% discount.

Step 3: Prepare updated management accounts for your client

Finally you can prepare financial statements to submit to Experian which reflect the more recent financial position of your client.

The documents which you can submit are:

  • A new set of accounts (required)
  • Up to date Management Accounts (recommended)
  • Aged debtors (optional)
  • Business plan (optional)

The impact for your client

As a key part of ensuring the financial health of small businesses, our accounting partners are well positioned to use their accounting services to put their clients in a better light with financial services companies and credit bureaus.

The impact of this can be life changing for a small businesses. Whether they are recovering from financial difficulties, overtrading with a tight cash balance or looking to win major tenders, by repairing a client’s reputation this is a valuable accounting advisory service.

To find out more contact your partnership manager, or to get started with Capitalise, book in a call with our team.

You can find out how an accounting firm were saved from Fraud by getting their credit score reviewed, learn more here.

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