Are you confident in the financial health of your organisation? Do you know what’s needed to keep your business credit score heading in the right direction for public sector contract wins?
Understanding what’s required to run and maintain a small business from a financial perspective will help you to avoid unnecessary pitfalls and move forward with confidence. With an experienced team of small business mentors, Go4Growth can provide targeted guidance and 1-2-1 support to help you navigate this element of running your company and successfully break into the public sector market, even if you’re just starting out.
Economic and Financial Standing assessment (EFS) – can you deliver the contract?
Aside from the obvious benefits of a solid financial foundation, your organisation’s financial history can also play an important part in your public sector engagement. The role of the EFS assessment in public sector procurement is ultimately to safeguard the provision of public services by evaluating the financial risk of potential contractors. During the procurement process, contracting authorities assess the EFS of a bidder to ascertain whether the business is capable of delivering the contract.
Another key part of this process is determining whether appropriate risk mitigations can be established to manage potential bidder financial capacity issues. The EFS assessment is part of what’s commonly known as the Selection Questionnaire (SQ) stage of the bid process.
The financial assessment tools of the public sector
The systems that public sector organisations use to assess the EFS of companies bidding for contracts are either a business credit check or the Financial Viability Risk Assessment (FVRA) tool. The FVRA is applied to companies with an annual turnover of £2.5m and above, whereas a credit check is applied to those bidders below this threshold. Many SMEs fall into the credit check category, but this has been problematic for some following the impact of COVID-19 on financial stability and there are occasions where the FVRA tool is being used when a credit check has not been successfully passed. .
With the FVRA requiring completion by any key subcontractors that may be involved too, it can feel like a complex, lengthy task to even the most experienced of accountants, let alone small business bidders. At Go4Growth, our in-depth understanding of the process means that we can guide you through breaking the task into more manageable chunks, helping to eliminate overwhelm and preventing avoidable mistakes.
Financial readiness – how to prepare for public sector assessment
So how can you ensure your finances are ready for scrutiny, and how can you counteract the impact of unexpected events such as COVID-19? Although getting your business ducks in a row can sound like a lot of hard work, with our support it doesn’t have to be. The Go4Growth team has a wealth of experience and resources to help you develop your knowledge and skills, as well as providing a calm approach to any of your concerns.
Credit score health
There are many ways in which a good credit score can be developed and sustained. Beginning with a clear understanding of your company’s credit history is essential, as this can help you to identify any historical problem areas and plan a roadmap to a healthier financial future.
Keeping a good record of what payment plans you are signed up to and the terms that you need to keep is useful, as it can ensure you stay on track. Timely payments will safeguard against negative business credit record checks.
The credit score of your key suppliers is as important as your own, and an awareness of their credit history can help you to avoid any future impactful supply issues. It’s also advisable to ensure that your personal credit score stays as healthy as possible, as this can sometimes be referred to by potential customers if there’s not enough information available initially.
Organisation
Having an organised system will ensure that your financial transactions are timely and that you keep on top of your record-keeping obligations. Go4Growth can advise you on some good practices to get going within your business.
Auditing
An annual audit can be a great way of increasing confidence in the financial information available to customers, ensuring you have a reliable overview of your company’s accounts, and supporting the growth of your small business. You might, however, decide to manage and prepare your own accounts, as your organisation may be exempt from having a statutory audit. In this situation, our Go4Growth team of knowledgeable small business owners can help you to navigate your way through this process and tackle any financial and business matters that might arise for you.
Risk analysis
Regularly reviewing the potential risks your organisation could face is beneficial in both pre-empting future problems and preparing for public sector risk assessment of your business. What is a risk to your business? Do you have reliable suppliers? Do you depend on the business of a few customers? The Go4Growth free platform can provide you with gap analysis for your organisation and give you an action support plan to bridge the identified issues.
Projections and planning
Establishing cash flow projections and anticipating the future budget of the business is essential to avoid financial problems. Regular meetings to discuss both elements with relevant staff can help you stay on top of your accounts, and assist with planning the future of your business.
How Go4Growth can help you
We’re here to help give you the best possible chance at breaking into the public sector market. The Go4Growth programme provides free support to small businesses and voluntary, charity and social enterprise organisations. Fully funded by the public sector, we can provide you with a tailor-made action plan, support, training events, resources, and so much more, all backed by our skilled team of procurement experts and business owners.
For more advice on how to improve or sustain the financial health of your business, or for further information on how Go4Growth can help you succeed in the public sector arena, get in touch with our specialist team.
