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Expert advice: Building a financial plan for your business

May 11, 2020

With the panic of COVID-19 beginning to settle down, it’s time now for businesses to take stock of their situation and begin to look at what’s next.
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Financial planning, and preparing for what’s around the corner, has always been key to business success. But now more than ever, for businesses to survive this crisis, having a good understanding of your cash flow and a plan for the months and years to come is vital.

Getting advice from the experts

As a follow on from our popular session on government backed loans, I was joined last week by two financial experts from Xero’s partner community who shared their experience and insights when it comes to financial planning.

Our experts – Lauren Harvey, founding director of pacesetting firm Full Stop Accounts, and Jonathan Gaunt, founder of accountancy firm FD Works and app partner Xavier Analytics – shared their advice and guidance on financial planning, where to begin and how Xero can help.

We were also joined by Xero education specialist Jess Deadman who ran us through a product demo. The demo covered tips and tricks for where to find and how to manage that vital information inside Xero.

To catch up on the full session, watch our webinar recording below or keep reading for the key takeaways.

Eight weeks into lockdown: What are our experts seeing?

FD Works and Xavier Analytics founder, Jonathan Gaunt, said he’s been encouraged by businesses now taking a greater interest in their finances, getting into Xero more regularly and understanding their financial position.

“We’ve got people really diving into Xero on a day to day basis… understanding what their costs are, what are the one-off costs… so they know what’s going on with the numbers and [can] start balancing their books.”

Lauren Harvey adds: “For some people, it’s given them the time to step back and go, ‘How am I going to come back from this?”

“We’re talking to people about their numbers more than ever,” Lauren said, allowing her and the team at Full Stop Accounts to be proactive rather than reactive.

“It’s given them time to review their processes, to understand their numbers, rather than just bookkeep.”

Considering the risks

From the furlough scheme, grants and a deferral of tax payments, to the Coronavirus Business Interruption Loan Scheme (CBILS) and bounce back loans (BBLS), the government has provided a raft of options for businesses to consider.

While this support has been welcomed and taken on by many, businesses must now prepare themselves for that support to be retracted or reduced. When financial planning, it’s important to consider this among your risk mitigation strategies as well as the uncertainty we face with customer confidence and demand.

As Katrin Herrling, founder of Funding Xchange, stressed in last week’s government loan scheme session, “Don’t use debt unless you have a plan to repay it… If you default on [a] loan, it’ll have a significant impact on your future ability to get credit.”

But Jonathan says you can mitigate a lot of the risk by thinking about some of the ‘what if’ scenarios.

“If we plan for it, we take away the element of surprise. And if we focus on what we can control then we’ve got a lot more opportunity to come out of it in a better position.”

“Where you’ve got a degree of uncertainty, make an assumption, make a call. What do you think is going to happen? And play around with some of those scenarios.”

Adapting to a change in demand

The impact of COVID-19 has seen our world change dramatically before our eyes. And with that change has come a change in demand for all kinds of businesses. So how can businesses begin to adapt to that forthcoming change?

“Let’s start talking to our customers more; start embracing some of the change that has happened and feels good,” Jonathan said. “Let’s see it as an opportunity to go back to building the businesses we really want.”

Lauren said she’s been helping clients get their head around what that change in demand has been for them and helping them to dissect that.

“If demand has gone away, what demand is there now?” she added. “What can they do now to keep the cash rolling?”

Financial planning: where to begin

When it comes to laying out a financial plan, where do you begin? Both Lauren and Jonathan stressed the importance of getting the foundations right first, then bringing that information to life.

Lauren suggests starting with reconciling bank transactions daily, automating bookkeeping and financial records, and regularly reviewing and understanding the numbers.

“Don’t do your accounts for the VAT man; do it for yourself… If you’re [reconciling] daily or weekly, actually use that information for yourself rather than someone else’s purpose,” she advised.

When asked how frequently our webinar attendees reconcile their bank transactions in Xero, 40% said daily while 33% said they reconcile weekly – something our experts suspect is a positive symptom of the uncertainty businesses have been facing due to this crisis.

“You’ve got to look at your finances as the toolkit that’s going to give you a sense of direction,” Jonathan said. “You’re not going to go on a long journey in your car without looking at how much fuel you’ve got.”

Seeking clarification from an expert

For business owners struggling to understand their finances and not sure how to take that next step forward, it’s a good time to speak to an expert – an advisor or accountant who does this every day for their clients.

But what if you’ve spoken to your advisor and things still aren’t making sense?

“It’s for business owners to challenge their accountants if they don’t understand it,” Jonathan said. “Keep asking them to tell it to [you] in a different way, because finance doesn’t have to be complicated.

What about advice for the accountant?

“The more simplistic we can make it [to understand their finances], the more we can help business owners enjoy it,” Jonathan explains. “When the finances can help [business owners] and give them the clarity they’re looking for… they go onto great things,” he added.

Getting the financial analysis that you need

Lauren says: “In an ideal world, we probably would go with a full three-way cash flow forecast if we were planning from scratch.”

But to avoid feeling overwhelmed during this time, she recommends a more simple cash flow monitoring tool as a comfort blanket.

Business owners shouldn’t need to feel like they need to do it all themselves, Jonathan stressed. That’s the benefit of having an advisor who can understand the numbers and use the tools available to them to provide business owners with guidance and advice.

“Tell us a story about how things are linked. Tell us about what you think is going to happen and start to put timescales on it – when’s that going to happen, how long?” he said. “Then work with your accountant to turn that story into a page of numbers.”

“And work with a medium that works for you,” added Lauren. “If that’s on your sofa at eight o’clock at night, if that’s your best thinking time, just get it in a notepad and take pictures of it and send it to your accountant, because they’ll be the ones who are good at translating it.”

What’s next for financial planning?

Understanding your cash flow is crucial for any business. If you’re new to the idea of managing your cash flow, we’ve put together an online course to help you manage and automate this in Xero. View ‘Master your business’s cash flow’ online course

Choosing an app that suits your business can be a daunting prospect. To help you decide which cash flow app is right for your business, we’ve researched four relevant apps to help you decide which app best suits your needs. You can also see which will address your pain points. See our Small Business Cash Flow App Guide

If you’re not getting the support you need from your accountant or advisor, find one that’s able to help. Xero’s advisor directory is a great place to start when looking for an accountant or bookkeeper that’s right for your business.

Lauren and Jonathan’s top takeaways


  1. Go back to the beginning and look at your personal plans. Times are hard so try and spend the time doing what you really want to do.
  2. Have an up to date Xero by reconciling bank transactions daily, automating bookkeeping and financial records, and regularly reviewing and understanding the numbers.
  3. Allow time to create a simple cash flow habit everyday to gain confidence in understanding your numbers.


  1. It’s about the vision. What do you want your business to be? It’s going to be tough, it’s going to be challenging. However, you’ve got to have the energy and the excitement for running a business and do it for the right reasons.
  2. Understand your current situation and then start to consider the obstacles in the way. How can you use good financial planning to navigate your way around them?
  3. Start looking further forward into the future, and get energised and excited about running your business.

Why leave it there?

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