Whilst there is some debate as to the degree that individual accountancy businesses will be affected by changes in the marketplace relating to taxation returns, financial advice and superannuation fund audits, you would be a very brave accountancy business if you elected to reject these changes out of hand!
At the very least why not have an each way bet!
There are numerous examples all around us about changes that are occurring in the business community – think about:
now competing with businesses such as Amazon and other internet selling organisations.
As a “numbers orientated person” my suggestion is that in the first instance you identify what the “Potential Fee Slippage” might be for your accountancy business.
There is no doubt that there are changes in the accounting market. These changes are occurring at an ever faster pace! How you respond to these changes will significantly affect what your accountancy business looks like in a few years’ time.
Potential “fee slippage” is a relatively new problem for accountants. “Fee slippage” is caused by a number of things including:
Accountants can assist small/medium enterprises to reduce their Debtors’ Days Outstanding by producing a Debtors Systems’ Manual.
A written debtors’ manual, together with targeted training of the small/medium enterprise’s staff responsible for credit sales/debtors will assist an individual business to play its part in reducing Australian small/medium enterprise’s debtors’ days outstanding “from being the worst in the world“. Described by Australian Government’s Small/Medium Enterprise Ombudsman, Kate Carnell as being the “SILENT KILLER OF MODERN BUSINESS“. (Australian Financial Review article)
Australia is lagging the rest of the world in terms of late payments described as the “silent killer of modern business” by the Australian government’s Small Business Ombudsman, Kate Carnell late last year. (Australian Financial Review Article)
An international study of 30,000 invoices from 80 countries undertaken by UK-based “Market Invoice” found that Australian businesses were being paid 26.4 days later than the traditional payment period, far later than the next latest country, Mexico with 18.6 days or South Africa with 16.5 days late.
Based on the traditional 30-day payment terms, this means that Australian small businesses are being paid on an average of 56.4 days.
Ms Carnell said that “In Australia more and more small businesses are falling victim to the unscrupulous payment practices of some big businesses – and even government departments – that are quite frankly a drag on productivity”.
Whilst compliance work is still important, it’s no longer the only “game” for accountants/advisors!
The key 2017 challenge for accountants and advisors is “responding to client requirements for accountants/advisors to provide ‘additional commercial services’ “.
Accountants/advisors need to be adding value to clients by providing commercial services which assist the CEO/owner of a small/medium enterprise to operate their business with reliable current information from their key advisor so they can make informed decisions and add value to their businesses.
I’d like to take this opportunity of wishing you, your colleagues and your families a very Happy Christmas and I hope that 2017 will be very prosperous for you and your business.
Over the last six months the team at ESS BIZTOOLS has brought you comments on a wide range of business issues that, we believe, are important for accountants to think about as you plan the services for your clients. As part of that planning, I would urge you to take into consideration feedback from the small/medium enterprise community as to the services that they require. There have been a number of surveys conducted over recent years by CCH, MYOB, Smithink, universities and other organisations that have all indicated that small/medium enterprises want additional commercial services.
What would you learn from 8 hours with a group of company directors? I had that privilege a couple of weeks ago in a programme sponsored by the Entrepreneurs Programme, part of AusIndustry. The brief was to meet for 8 hours with a group of company directors and discuss with them the issues that they were confronting in their businesses and also to give them some briefing on corporate governance issues.
I learnt plenty in getting feedback from the directors and thought today I’d share what they said with you.
The directors represented companies that had turnovers from $750,000 through to $29M with an average of around $4M amongst the various companies.
The feedback that I received that I thought you might be interested in included the following:
What services are you going to provide in 2017 which create a WOW factor?
Last week we talked about Chief Financial Officer services, Debtors’ Management, Personal Property Securities Register Due Diligence (a major risk management area) and Succession Planning.
Today I want to move further into other services that accountants and business advisers can perform to help your clients overcome the commercial problems that they are confronting.
The first one I want to start with is raising finance; this can take many forms of course, e.g. loans, share capital, early stage innovation company.
For loans from banks or other financial institutions, your clients are going to require budgets and cashflow forecasts and, in many cases, business plans.
Don’t forget that Section 708 of the Corporations Code is still available to raise capital for private companies and now we have the special category – Early Stage Innovation Companies for companies which have developed new products, processes, services, organisational or marketing methodologies or other types of new services, which are able to raise capital and there are real benefits for the investors because the investors can receive a 20% tax offset based on their investment and a capital gains tax exemption, which can last from the end of the first twelve months of the investment to the end of the ninth year of the investment.
As we get near the end of another calendar year it’s an appropriate time for accountants to be asking yourselves what services will your clients want in 2017?
There has been a lot of debate over the last few months about tax returns and how much reliance clients are placing on accountants to prepare tax returns, but I think we need to think of the bigger picture; what do your clients want?
The growth in the consultancy and coaching industries around Australia have indicated that many of your clients want additional services. Indeed the surveys that have been conducted over the last 15 years by MYOB, CCH, Smithink and some universities have all indicated that SMEs are looking for a wider range of commercial services. Some of which, in fact the majority of which, accountants could provide, if you offer a broader range of services. I suggest to you that that is the challenge for 2017; because your clients are not going to wait forever for accountants to respond to their requests for a wider range of services to be made available.
Accountants, small/medium enterprises need your assistance with risk management.
In big business, public companies the CEO traditionally turns to their Chief Financial Officer or company secretary for advice on risk areas within the business.
One of the biggest risk areas is Debtors. Debtors are a major risk for small/medium enterprises. Australia is lagging behind the World in terms of late payments, according to a recent report from the Small Business Ombudsman.
The Ombudsman called debtors management problems for SMEs the “silent killer of modern business”.