Many people’s expectations that “Business Advisory Services” would emerge as a prime business offering for accountants to supply to clients has been confirmed by the June 2020 “CommBank Accounting Market Pulse” report which indicated that the survey participants had identified that the practice area expected to be in most demand for the next 6 to 12 months would be “Business Advisory Services” with a scoring of 70%.
This rating was supported by “Accountants Become the ‘Centrelink’ of Business World” in the Financial Review on 18th June 2020.
“The accountant of the future will need to be a compliance expert who can grapple with fast changing rules while providing a broader advice to clients about their business”.
“The upshot is that accountants will continue to feel pressure to develop consulting skills to understand and deal with their clients’ biggest business issues beyond basic compliance”.
In the previous edition of For Accountants “Take a Bow – But It’s Only Half Time!” I summarised a number of very important items to be implemented with clients to assist them in their business survival.
The other items in this all-important survival checklist include:
· Ensure that WIP is regularly reviewed and that invoices are raised promptly (this applies to accountancy firms as well!).
· Closely monitor the debtors’ ledger and implement debtors’ management strategies to reduce debtors’ days outstanding.
· Regularly review the investment in inventory, particularly stock turn rates, for individual stock categories.
· If the client has a job costing system, review it to ensure that all direct purchases are being allocated to the correct job number so that accurate financial information is available to management on the performance of each job.
· Review the basis for the determination of retail prices to determine whether the combination of prices being charged and the sales mix for the various product components will achieve the targeted profit for the business.
· Review the basis for the determination of charge out rates for professional firms, taking into account productivity and overhead costs, to determine whether the productivity and charge out rates will achieve the firm’s targeted profit.
· If the business is a tradie or manufacturing business, review the charge out rates and material markup rates being utilised, together with the overhead expenses and the team member productivity, to determine whether the targeted profit will be achieved for the business.
· Discuss with your client the concept of the establishment of a monthly business review meeting that you, as the accountant, would coordinate. The business review meeting should include all members of the leadership team with the prime discussion being on the business’ performance, not on taxation matters. Coordinate the preparation of the agenda and distribution of reports for discussion at the meeting and, at the end of the meeting, prepare minutes and an action plan of items to be undertaken prior to the next meeting and distribute this to the attendees for their action prior to the next meeting.
These processes are all part of assisting your clients to survive the ongoing challenges from COVID-19 Coronavirus during 2020/21.
If you would like to participate in a series of webinars relative to COVID-19 survival, ESS BIZTOOLS and our Affiliates are presenting a weekly one hour webinar held each Friday at 12-noon AEST, on a variety of subjects relative to strategies that you could utilise with many of your clients to assist them in their business survival.
You can register for these free webinars at ESS BIZTOOLS èWebinars.
You are invited to visit the ESS BIZTOOLS’ website è Survival in Difficult Times Product Package è Learn More which includes COVID-19 Survival Panel which will assist accountants to deliver “Business Advisory Services” to your clients!
There is a special 20% discount available for For Accountants’ readers.
Insert the following discount codes during the Survival in Difficult Times Product Package subscription process for either the yearly or monthly subscriptions, as follows:
· ‘FORACCY’ – when you are subscribing for a yearly subscription.
· ‘FORACCM’ – when you are subscribing for 12 monthly payments.
Peter Towers | Managing Director
7th July 2020
Latest posts by Peter Towers (see all)
- A Real Shift in the Accounting Marketplace - August 10, 2020
- Business Advisory Services” Expected to Be in Demand! - July 7, 2020
- Take a Bow – But It’s Only Half Time! - June 15, 2020