It’s still early enough in 2018 for accountants to be identifying challenges that present opportunities for accountancy businesses to exploit by offering innovative services to small/medium enterprise clients over the next few months.
One of the biggest challenges is positioning an accountancy business so that it can be a key player in the new “income stream” that has been created by the Australian government with the legislation for Crowd-Sourced Funding Equity Raising and Early Stage Innovation Companies Capital Raising.
To grasp the opportunities that are available accountancy businesses will need to develop an awareness of all aspects of the capital raising opportunities that SMEs now have from these two new types of companies. One of the key challenges will be developing “champions” for both of these capital raising opportunities that are now available for the traditional clients of small to medium-sized accountancy businesses – small/medium enterprises.
There are some industry projections that the capital raising market for small/medium enterprises will range from around $400 million this year to around $1.5 billion by 2021.
Our estimate is that professional fees, to assist these companies to attain the “investment readiness” status that they will require to successfully raise capital, will be from $20,000 to $50,000. Surely this presents a significant opportunity for accountants to communicate with clients to ascertain who might be interested in this unique opportunity to raise capital. Then, the challenge for accountancy businesses will be related to developing the “champions” who can deliver the new services, thus creating a new “income stream” for those proactive accountancy businesses.
Another significant challenge for accountants is to proactively contribute to the reduction in “debtors’ days outstanding”. A short while ago Australia was given a very dubious award – having the “longest debtors’ days outstanding in the world”.
Since that announcement was made, the Prime Minister has made a significant commitment by instructing all Federal government departments and agencies to ensure that bills, owing to SMEs, are paid within 20 days. This is good news for SMEs who are dealing with Federal government departments, however many SMEs do not deal with Federal government agencies.
The opportunity for accountants is to proactively review your clients’ debtors’ systems so as to ensure that their systems are so organised that the debtors’ system will be highly efficient which, in most cases, will contribute to a reduction in debtors’ days outstanding.
Another significant challenge for small/medium enterprises and accountancy firms is an awareness of the significant financial costs that can in fact lead to business failure through ignorance of the operations of the Personal Property Securities Act. There are significant benefits for many businesses to register on the Personal Property Securities Register so as to protect business assets from liquidators in the event of a liquidator being appointed to a client’s customer or business that is holding assets on behalf of the client. The estimated cost from nonregistration on the Personal Property Securities Register is estimated to have been in excess of $400 million since this legislation commenced.
There is an opportunity for individual accountancy businesses to be seen as proactive in undertaking Personal Property Securities Register Due Diligence Reviews of your clients’ assets to identify what changes are necessary in the SMEs’ systems to ensure that, in situations where the client could suffer a significant financial cost, that management is prompted to consider whether to register that customer on the Personal Property Securities Register.
ESS BIZTOOLS has developed a range of product packages including:
- Crowd-Sourced Funding Equity Raising
- Early Stage Innovation Company Capital Raising
- Debtors’ Management
- SME Debtors’ Systems Manual
- Personal Property Securities Register Due Diligence Review
If you require further information on these products or any of the other services provided by ESS BIZTOOLS please Click Here.
Peter Towers | Managing Director | ESS Biz Tools