“That’s a Great Opportunity for Accountants/Advisers!”

This was the reaction from an experienced principal of an accountancy business when we discussed the opportunities available from “Crowd-Sourced Funding Equity Raising”.

My colleague said “with this legislation virtually any type of client will be able to embark on a capital raising journey, in so doing avoiding the need to borrow from friends and families and taking out second and third mortgages on their own property to fund their business vision.

To do this successfully they are all going to need committed accountants offering a true “trusted advisor” service to guide them through and in so doing the committed accountant will have established a “new income stream”.

My accounting colleague is correct – any type of business can have a vision to raise capital from the public – up to $5 million every 12 months can be raised – but, they are going to need a committed accountant/advisers to help them to prepare the “default prospectus” known as the “Crowd-Sourced Funding Offer Document”.

 

Accountants, Capital Raising Opportunities Give You a New Income Stream!

There are a number of opportunities for accountants arising out of the Crowd-Sourced Funding legislation with the first listings on intermediaries’ platforms (website) scheduled from 29th September 2017.  Now is the time to get prepared to assist your clients and prospects to be able to avail themselves of this unique opportunity to be able to raise capital from the “crowd”.

At this stage Crowd-Sourced Funding is only available for unlisted public companies.  The legislation enables propriety limited companies to be converted to an unlisted public company.  Whilst there has been some debate about the requirement for companies to be unlisted public companies, some people with considerable experience in the process of raising capital for small companies are very supportive of the concept that capital is to be raised by unlisted public companies primarily because of the structure of public companies, corporate governance requirements and constitutions that reflect that the shareholders will be more than family and friends which is normally the case within a proprietary limited company.

Accountancy Firms Wanted!

This could easily be an advertisement in small/medium enterprise magazines as small/medium enterprises contemplate trying to raise capital as Crowd-Sourced Funding Companies.  Each of these applicants is going to require assistance from accountancy businesses for the directors to achieve their aims.

In fact, based on an expectation that around 10,000 companies might try to raise capital as Crowd-Sourced Funding Companies over the next 12 months, this could mean that 700 accountancy firms are required to be making a strong commitment to Crowd-Sourced Funding.

Wanted! Accountancy Firms Committed to Crowd Funding

The Crowd-Sourced Funding Legislation is brand new and therefore presents a fantastic opportunity for accountancy businesses to get involved with this new service.

No accountancy business in Australia has a “historical advantage” with Crowd-Sourced Funding because this is new legislation.

Now is your opportunity to get involved with a product which will offer a great service that will enable you to diversify your services from your competitors.

Crowd-Sourced Funding is targeted at:

  • small medium enterprises
  • inventors
  • entrepreneurs

These business entities are traditionally clients of small to medium-sized accountancy businesses.  Don’t encourage these clients to go elsewhere for advice that, with a little bit of preparation (maybe only a couple of hours), your firm should be able to present an outstanding crowd-sourced funding service.

 

 

Accountants – Crowd Sourced Funding Offers You Many Benefits!

Crowd Source Funding is a “new revenue stream” for the Australian accounting industry.

One of the benefits is that you do not require a “special license” to act as an advisor to a company which is interested in seeking capital by utilising Crowd Sourced Funding.

Crowd Sourced Funding presents accountancy businesses with a great opportunity to differentiate your accountancy business in the market place.

Crowd Sourced Funding will not be subject to the competitive pressures and Australian Taxation Office driven changes that are affecting the income tax return preparation market.  Crowd Sourced Funding advice and implementation will definitely not be a commodity product!

There are a significant number of components to the Crowd Sourced Funding “revenue stream” including:

  • Initial discussion with the client/prospect in relation to Crowd Sourced Funding.
  • Utilisation of the Crowd Sourced Funding checklist to determine whether a company is eligible to be a Crowd Sourced Funding company.
  • Preparation of a Crowd Sourced Funding report utilising the Crowd Sourced Funding report templates.
  • Identifying the work to be done for a company to be “Crowd Sourced Funding Investment Ready”.
  • Market Research.
  • Marketing Plan.
  • Intellectual Property Summary.
  • Research and Development Strategy.
  • Management Team.
  • Organisational Chart.
  • Business Plan.
  • Budget and Cashflow Forecast.
  • Crowd Sourced Funding Offer Document.
  • Information Memorandum.
  • Crowd Sourced Funding Project Management.
  • Meeting with Crowd Sourced Funding Intermediaries.
  • Negotiation of fees with selected Crowd Sourced Funding Intermediary.
  • Submission of Crowd Sourced Funding Offer Documents to Crowd Sourced Funding Intermediary.

 

Crowd Funding Offers Significant Benefits to SMEs and Accountants

Crowd Funding Offers Significant Benefits to SMEs and Accountants

A new opportunity for small/medium enterprises, inventors and entrepreneurs has emerged with the passing by the Australian Senate of the Australian government’s Crowd Sourced Funding Amendments to the Corporations Act.

SMEs and others now have three distinct opportunities where they can raise capital from the public without producing a prospectus.  These opportunities for capital raising are:

  • Crowd Sourced Funding
  • Early-Stage Innovation Company
  • Section 708 of the Corporations Act “Capital Raising”

 

Are You Building a “Future Fit Accountancy Business”?

CCH iFirm presented a very interesting webinar earlier this week which raised a number of questions relating to how you might go about building a “Future Fit Accountancy Business”.

What do you need to create an outstanding accountancy business?

  • Curiosity
  • Focus on building value for your clients

How do you view challenges:

  • Threats? or
  • Opportunities?

Many of these challenges will present opportunities if you have a good look at them.

These are opportunities that can add value to your clients as well as to your own business.

Accountants…. Action Required Now to Assist Businesses to Reduce Debtors!

Have you contacted your clients to ascertain their debtors’ days outstanding?  How many of your clients have debtors’ days outstanding similar to the average figure determined in a worldwide review that identified Australia as having the “longest debtors’ days outstanding in the World”?

The review, covering 80 countries, determined that Australia had an average debtors’ days outstanding of 56.4 days which was substantially higher than any other country!

This is a national disgrace!

If accountancy businesses are performing as the “trusted advisor” to a small/medium enterprise surely this means proactively assisting your clients to get their debtors’ days outstanding close to 30 days as part of the job description.

Where do you start?

Crowd Sourced Funding Equity Legislation Passed

At long last the Australian parliament has passed the legislation that will enable companies to raise capital from the public.  This is a great decision for small medium enterprises, entrepreneurs and members of the public who wish to invest into a new type of company!

The legislation indicates that the only entities which can raise money using the crowd sourced funding equity method will be an unlisted public company.  The legislation enables a proprietary limited company to be able to be converted to an unlisted public company to enable the company to then be able to raise money from the “crowd”.

Unlisted public companies will be able to:

  • raise up to $5 million every 12 months
  • be able to do the company must have group turnover less than $25 million and have group assets of less than $25 million

Retail investors will be able to invest up to $10,000 every 12 months into a company.  The “cooling off period” for retail investors is five days.

Sophisticated investors are not subject to any investment limit and there is no “cooling off period” for them.

Accountants… Reducing Debtors’ Days Outstanding Will Help Your Clients Survive!

90% of small business failures are due to poor cashflow” Ms Kate Carnell the Australian Government’s Small Business Ombudsman said recently.

Australia has the longest debtors days outstanding in the world”.  A survey of over 80 countries found that Debtors Days Outstanding in Australia was 26.4 days higher than the normal payment term of 30 days meaning that debtors’ days outstanding on average are 56.4 days.

Where to Start?

Identify your clients that have debtors’ days outstanding in excess of 40 days or:

  • had bad debts in excess of $10,000 last year; or
  • received a “Preferential Payment Claim” from a liquidator.

Why not have a conversation with your client about the benefits of you undertaking a review of their debtors’ system to ensure that it is working appropriately?