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”.
Risk management is an accepted subject for accountants to enquire about with your clients relative to covers, policies that have been enacted etc. This can cover items such as:
- business risks;
- looking at commercial compliance
- corporate governance
and at least another half a dozen risks that affects businesses.
Most accountants do make enquiries of their clients about the strategies that have been implemented to protect the business from problems in these risks.
Accountants, you are needed in the ESIC process. The Early Stage Innovation Company amendments to the Income Tax Act have instigated the first lot of publicity about a company which was actually going through the verification process.
The company, a Perth company called Epic Delivery, had difficulty in satisfying the Australian Taxation Office that it qualified under the Principles Based Test. In an article written in the Financial Review last week, the company’s co-founder was quoted as saying that the company had been unable to accumulate the required 100 points under the Gateway Test, and then had to rely on the Principles Based Test. The company had difficulty in satisfying the Australian Taxation Office initially that they had “sufficient competitive advantage”. According to the company’s co-founder, they then had about 10 separate communications with the Australian Taxation Office so they could satisfy the ATO that they did have a “sufficient competitive advantage” for their business.
I’d like to invite you all to attend a special webinar on Wednesday 16th November 2016 when we’re going to conduct a MasterClass webinar targeted at accountants and business advisers on the Early Stage Innovation Company legislation.
This is a… Continue reading
Accountants, do you really know your clients? At the ATSA Conference in Melbourne a couple of weeks ago, a number of the presenters referred to the concept of “trusted adviser”. Are you the “trusted adviser” to your clients? It’s an interesting question and I intend to explore that further next week.
For today, lets concentrate on do you really know your clients? Surely part of the concept of being the “trusted adviser” is knowing your clients.
What does that mean? I’ve conducted quite a number of sessions with clients of accountancy businesses over the years and when I sit and talk to the small/medium enterprises that comprise a good average cross-section of the clients of accountancy businesses, I have found that one of the most common statements I get from these people, near the end of the process, is “I want my accountant to know more about my business than just the Profit & Loss Account”.
At the Australian Technology Showcase for Accountants (ATSA) in Melbourne last week, many new types of innovation for accountants were presented by the various presenters and businesses that displayed their goods and services to the accountants who attended.
CCH iFirm and CCH iQ confirmed the Early Stage Innovation Company legislation as a significant opportunity for accountants to illustrate your innovation credentials to small/medium enterprises.
Now is the time to show that you’re interested in innovation by becoming a major contributor to identifying companies that could be assessed as being an Early Stage Innovation Company. Why? Well this is the first legislation that encourages business people to invest in young companies which might have a great product in the process that they’re developing.
This is part of our theme over the last three or four issues of Accountants Minute when we’ve been looking at what you need to do to add value to your clients’ businesses.
Innovation is very much in vogue. Accountants need to be looking at innovation just as other businesses have to. It’s quite appropriate, in this week of ATSA 2016, to revisit some of the comments that were made at Australian Technology Showcase for Accountants (ATSA) 2014, also in Melbourne, by Jason Bender a partner of Deloittes. Bender made one of the best presentations that I’ve ever heard, especially by an accountant. He said “digital disruption was going to have a significant impact on the accountancy profession”. Two years later I think you’d have to agree that Jason Bender was correct.
He also said that “disruption doesn’t mean that revenue was gone; however there is a need for accountants to develop strategies on how to respond to changing market conditions”. What does that mean to your firm?