Financial advisers and accountants are increasingly switching to allowing monthly fee payments as clients struggle financially.
New research from Premium Credit found nearly two out of five (37%) surveyed said cashflow at their business suffered last year and almost all (95%) said clients struggling to pay fees was the main or a contributory factor in the squeeze in cashflow.
The vast majority (97%) of advisers and accountants allow clients to pay fees monthly over an extended period of time, a jump on the 70% who reported the same last year.
A similar number (96%) of respondents also said they would consider allowing clients to pay fees monthly if asked, compared to 68% in last year’s survey. There was similar strong support (98%) for offering clients the option to spread the cost of tax bills through instalments.
The study found that advisers and accountants are seeing signs of financial strain among clients, with more than a quarter stating that over five in 10 clients are in poor health or on the verge of failing.
Nearly two out of three (66%) surveyed agree HMRC is getting tougher on tax arrears and debts, double the 33% who believe HMRC has become more understanding.
Recent tax rises affecting SMEs such as Employers’ National Insurance and increases in the minimum wage have affected SME businesses, the survey found. Around half (48%) of advisers and accountants say the Government changes have reduced staff and recruitment at firms they work with while 47% say it has cut profits.
Despite this, 85% of those surveyed said they expect cashflow to improve over the next 12 months, including 15% who expect it to improve significantly over the period. More than half (52%) say that their client base has expanded over the past three years, with just 4% saying their client base has shrunk.
Jennie Hill, chief commercial officer at Premium Credit, said: “Accountants and financial advisers continue to show real flexibility and creativity in how they support clients, while also ensuring their own fees are paid on time.
“We’re seeing increasing use of monthly payment options being offered, and it’s clearly making a difference. More accountants and advisers are feeling optimistic about their cashflow for the year ahead. Enabling clients to spread the cost of fees through convenient monthly payments benefits everyone — it improves affordability for clients, supports timely payment, and reduces risk to both the business and the client relationship.”
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