Business Advisory News For Accountants

The Commonwealth Bank’s “Accounting Market Pulse” has predicted that business advisory services will be the number one service line to enter and grow for accountants in the next 12 months.   Business advisory services will help offset the losses from the introduction of the Australian Taxation Office’s Standard Business Reporting (SBR) and offer accountancy businesses “real accounting work” for accounting team members.   To assist accountancy businesses to get ready to deliver business advisory services, ESS BIZTOOLS is progressively releasing significant upgrades to the ESS BIZTOOLS’ product range, including:   ESS BASIP (Business Advisory Services Implementation Programme) The ESS BASIP Training Package for Business Advisory Services – Introduction will be available as a stand-alone product for an investment of $660 (including GST).   This change will enable accountancy businesses to invest a smaller amount of money, whilst the training of the team members is being undertaken.   ESS BIZTOOLS – Gold Package

Situation AvailableMany businesses have a “situation available” for a wider range of services – but not many accountants are applying. What services do SMEs want?Surveys undertaken by MYOB, CCH, Smithink and other organisations have all identified that SMEs are looking for a wider range of professional services from “someone”. The challenge for the accountancy industry is to ensure that “someone” is a professional accountant. This work will otherwise disappear to a range of other consulting firms and to those accountancy businesses that are better prepared. The services, indicated by the surveys, as being sought by small/medium enterprises include:• Future planning – where are we headed?• Budgets and Cashflow Forecasts – trying to predict the financial needs of the business.• Business analysis and interpretation:- Key Performance Indicators- Benchmarking- Ratio analysis• Succession/Exit Planning - there are thousands of businesses that are planning, or considering, exiting over the next decade. Succession is

In mid-2015, accountancy businesses are facing a wide range of challenges.  Accountants need to develop strategies to respond to the challenges to maintain the accountancy profession’s premier rating as the “trusted adviser” to small/medium enterprises.These challenges include:•    Effects of “Digital Disruption” – Deloitte has predicted that professional firms (of which accountants are part) will suffer a 32% change in their businesses, due to the effects of “digital disruption”, if they do nothing over the next few years.•    The Australian Taxation Office (ATO) is proceeding with a plan to introduce Standard Business Reporting (SBR) which the ATO believes will result in a “red tape reduction” of, at least, $500M per annum.  The vast majority of the “red tape reduction” is expected to relate to accountancy fees.  This will encourage small/medium enterprises to ask for their “red tape” discount!  There is a strong possibility that the Australian government will promote this “red tape” benefit to small/medium

Are you famous for adding value?     Virtually every accountancy business in Australia does tax returns.  Some firms claim to be “famous” for tax but how do you differentiate yourself in a crowded market place?   The beginning of a new financial year is an appropriate time for an accountancy business to stop, reflect and take stock on where your accountancy practice is headed over the next few years.   We are living in a situation where there is undoubtedly digital disruption going on in the community, affecting accountancy firms and a wide range of other businesses.   Another particular concern to accountants is the Standard Business Reporting system that is currently being phased in by the Australian Taxation Office (ATO).  The ATO is very confident that this is going to cause at least a $500M per annum reduction in professional accounting fees. How much of this is likely to affect your firm?   Taxation returns are becoming more of a commodity product and there is the ongoing increase in overseas competit

In the last few months, the Federal government has released two new grant programs, which offer significant benefits, not only to employees, but also to the businesses themselves.   These grants are Industry Skills Fund and Training for Employment Scholarship.   Accountants, who are acting as trusted advisers and offering a range of business activities, are able to alert their small/medium enterprise clients to these types of grants.  In some instances, they will be able to actually perform some of the work relating to the grant funding.   Industry Skills Fund The Industry Skills Fund has different levels of benefit available, depending on the number of full-time equivalent (FTE) employees that are engaged by the business.  These range from: ·          Micro-businesses (0-4 FTE employees) – 75% ·          Small businesses (5-19 FTE employees) – 66% ·          Medium businesses (20-199 FTE employees) – 50% ·          Large businesses (200+ FTE employees) – 25%   The business’ contribution must be in cash.  

One of the problems with many small/medium enterprise operators is that they try to do too much, primarily because they haven’t introduced effective delegation within the organisation. One way to introduce effective delegation is to allocate portfolios relative to that particular business. It’s a good exercise to sit down and write down all the functions that relate to the organisation and to think about how that role should be performed.  Even if it’s only for few minutes each day or 10 minutes a week, it all contributes to the effective management of the business. If all the responsibilities for these tasks are left for one person, it’s no wonder that many small/medium enterprise operators get “bogged down”. Read more on our blog

This was the direct appeal made to attendees at the ATSA (Australian Technology Showcase for Accountants) conference in Melbourne, on 21st October 2014, by Deloitte partner Jason Bender.   Mr Bender had earlier said that accountants need to think about how they’re going to react to the changes that are occurring in the marketplace and to the accountancy profession.  He said that, “If accountants are not really careful, the profession could really suffer.”  Sobering words to take into consideration.   Do you have a plan for the 2015 challenges? There are many on the horizon.  Read the blog: You can start a 30-day free trial of ESS BIZTOOLS. Click here to sign up. As a preview of what is included in ESS BIZTOOLS, a complimentary copy of our ‘Debtors’ Management System – Introduction Checklist’ can be downloaded below. To receive future editions in the ‘Business Advisory News for Accountants’ series, I invite you to subscribe, FREE of charge, to our ESS BIZTOOLS – Business Advisory News for Accountants – Po

Accountants need to be aware of the ‘priority industries’, which are the main recipients of grants under the four major grant programs introduced by the Abbott government. Priority industries are industries that the government believes enjoy a competitive advantage and are likely to exploit favourable market conditions or have a significant impact on the Australian economy.  

Business plans are like ‘maps for tourists’.  If you don’t know where you’re planning to go, how are you going to know when you get there? Virtually every business, large or small, requires a business plan, including sporting organisations, charities and churches. Within the small/medium enterprise, the CEO, directors (if any) and the management team should be utilising a business plan to help them direct the business towards achieving its overall objectives.  Other people are also interested in business plans, as a means of determining whether they’re prepared to be involved in the business in some way.

The Entrepreneurs’ Infrastructure Program has been developed by the Federal government to drive business growth and competitiveness through support for business improvement and promoting economic growth through research, connections and commercialisation of novel products, processes and services.   Accelerating Commercialisation Last week, the government released its final grant program within Entrepreneurs’ Infrastructure Program, Accelerating Commercialisation.   The aim of the grant Accelerating Commercialisation contributes to Entrepreneurs’ Infrastructure Program’s objectives by: ·         Accelerating the commercialisation of novel intellectual property in the form of novel products, processes and services. ·         Creating new businesses based on novel intellectual property with high growth potential and facilitating greater commercial and economic returns both from public and private research. ·         Develop investment to drive business growth and competitiveness.

A clear warning was issued by two prominent speakers at the Australian Technology Showcase for Accountants (ATSA) Conference in Melbourne, held on 20-21 October 2014.  They indicated that ‘digital disruption’ is starting to affect accountants. Two years ago, Deloitte produced a report, ‘Digital disruption – short-fuse, big bang?’  This report predicted that professional services, of which the accountancy profession is a key component, would encounter 33% of revenues becoming ‘disrupted’ over time.

Understanding Decisions of Courts and Liquidators’ Actions Relative to the PPSR and the PPSA is Important for Accountants The Personal Property Securities Act (PPSA) has operated in Australia since 2012. Since that time there have been a number of court cases and significant ‘non-court’ action by liquidators, receivers and administrators utilising the PPSA and, in most cases, highlighting the lack of an effective registration on the Personal Property Securities Register (PPSR). Because of the court’s decisions and insolvency practitioners’ actions, millions of dollars have been lost by businesses, both large and small, mainly caused through ignorance of the operations of the legislation and the desirability for a registration to be made if the loss of any asset or money owing to a business could cause financial embarrassment.  

Lack of knowledge of the Personal Property Securities Act (PPSA) and the Personal Property Securities Register (PPSR) could be a ‘time bomb’ for businesses. Millions of dollars have already been lost by businesses that paid for an asset but hadn’t registered that asset on the PPSR.  Whilst it’s voluntary to register, businesses need to be alert to the requirement that, if they are going to register, they have to do so within a very tight registration time period.  This highlights the need for a proper due diligence review to be undertaken now (if not yet done) so the decision can be made promptly on whether the transaction or asset rental, lease or storage is to be registered on the PPSR. The PPSA legislation can affect virtually any type of business.  Businesses need to be continually reviewing transactions relative to debtors, loans made to other people, intellectual property arrangements, service company arrangements and asset rental, lease or storage. Read morehttp://blog.essbiztools.com/personal-proper

Where do you think accountancy businesses are headed? Some of the key issues are: ·         Deloitte produced a report, ‘Digital disruption – short-fuse, big bang?’, which identified that professional services, of which accountants are part, are going to encounter ‘significant digital disruption’ over a three-year period, amounting to a 32% drop in business activity. Deloitte suggested that, to minimise threats posed by ‘digital disruption’ and to maximise an organisation’s ‘digital’ potential, it’s about ensuring businesses are ‘digital survivors’.  Deloitte’s suggestions included: -       Recalibrating cost structures. -       Replenishing revenue streams. -       Reshaping corporate strategies.  ·         Take up of ‘cloud’ technology by SMEs – whilst less than half of Australia’s SME operators have an online presence, there’s a strong expectation that the take-up of ‘cloud’ technology will continue. ·         Greater numbers of taxpayers utilising the ATO’s online lodgement system. ·         Personal Pr

Many business operators run out of time to effectively manage their business. There are all types of problems that confront business operators from: hiring of staff; talking to customers; preparing quotations; supervising the work being produced; liaising with industry representatives; meeting with accountants and lawyers; and meeting with marketing managers and various other advisors. Many small business operators, I know, turn to their accountants and say, “Who can assist me to get through these problems?” A couple of months ago, a new organisation was formed in Sydney, which is planning to operate a service throughout Australia of supplying a ‘virtual general manager’. The group, known as ‘Your General Manager (YourGM) Pty Ltd’, has assembled an outstanding team of experienced business operators who are available for secondment to a small business operator to give him/her assistance for a period of time from a few days through to a year, or longer, if required. http://blog.essbiztools.com/

The challenge accountants have is deciding on additional services that could be offered to ‘replenish revenue streams’. There is no doubt that there are enormous challenges confronting accountancy businesses, primarily the firms that are concentrating on the preparation of financial accounts and income tax returns.Being proactive in offering a service, to assist your clients to apply for appropriate government grants, is a service not only to assist your clients, but also to assist your firm to ‘replenish revenue streams’.However, to process all of these grants means there’s a lot of work to be done and many of you will not have the time or indeed the knowledge on the various government grants to proactively go about identifying grants for your individual clients.There is no doubt that many accountants are also fearful about referring their clients to other organisations to assist in seeking out grants, in case some of those other organisations ‘encourages’ your clients to go elsewhere for accounting and taxa

The following newsflash clearly identifies the issues confronting accountants on the Personal Property Securities Act (PPSA):•    Millions of dollars have already been lost by businesses, both small and large, caused by:-    ignorance of the PPSA; and-    not registering on the Personal Property Securities Register (PPSR).•    Legal action has been commenced against an accountant, claiming that no information on the PPSA has been distributed to the client.What does this all mean to accountants and, importantly, what role do accountants have in assisting their SME clients to understand the PPSA, which some people have claimed is the most far-reaching business legislation introduced into Australia in the last 200 years?Undoubtedly, the biggest change is that ‘title is no longer king’.  The fact that the business paid for an asset does not mean that business is able to retrieve the asset at any time, unless the business has taken steps to adequately protect their position on the PPSR. http://blog.essbiztools.com

Business health checks for businesses are just as important as health checks for humans.  An annual business health check will enable remedial action to be taken to correct trends which, if left unchecked, could cause business problems in the future.Accountants, offering a business advisory service, can offer an annual business health check to their clients.What’s Involved In Business Health Check?The key areas to be examined in a business health check include... http://blog.essbiztools.com/podcastshownotes/

There are three factors, which highlight the necessity for accountants to supply a wider range of services:The feedback from the marketplace, from surveys conducted by companies such as CCH, MYOB, Smithink2020 and others, has indicated that a significant number of SMEs require a wider range of services to be supplied to them.The emergence of competitors who, in many cases, are not appropriately qualified, offering coaching services.Digital disruption’ has identified that accountants should be proactive in the development of new services. http://blog.essbiztools.com/podcastshownotes/

The 30th June 2014 is only four weeks away.  It’s an appropriate time for accountants to be having conversations with your clients, to review what is happening in your clients’ businesses.Time for a ‘Think Tank Meeting’ with your Clients - The first of these strategies is normally a ‘think tank meeting’ with the client.  What’s worrying the client?Have they got particular concerns about how certain aspects of their business are operating? Are they worried about cashflow, debtors or succession within the business?  Read more... http://blog.essbiztools.com/podcastshownotes/