Which way do accountants go?
There are significant opportunities but also difficult challenges currently facing accountancy businesses.
Opportunities
There are a lot of other opportunities confronting accountants at present including:
- Innovation Statement CompaniesThe Prime Minister, Malcolm Turnbull announced in December 2015 that the government was committed to making amendments to the Corporations Code to enable some companies to raise equity on a Crowd Funding basis. The companies are going to be public companies and will have the ability to raise up to $5M per annum with a maximum investment per retail investor of $10,000.Another class of company (Early Stage Innovation Company) will be created which would entitle investors to a 20% tax rebate on their investment to a maximum rebate of $200,000 per company per annum. Those companies would also entitle an investor to a Capital Gains Tax exemption if the shares in the innovation company were held for longer than one year but less than ten years.In the Prime Minister’s statement, he indicated that the government was aware that 4,500 companies were unable to raise funds from investors in 2015. Apparently this figure was determined based on enquiries with AusIndustry. Many of your clients that had possibly thought about raising equity capital might not have ever gone and had a discussion with AusIndustry, therefore the government’s estimate could prove to be very conservative.All of these new types of companies are going to require extensive accounting industry input. Roles would include:
- Company secretary
- Directors
- Performing a Chief Financial Officer role
- Share registry work
- Small/medium enterprises want more commercial services. This has been very well documented over the years in surveys conducted by MYOB, CCH, Smithink and various other organisations.
- For many businesses there is an opportunity to offer a Chief Financial Officer role by performing a wide range of business advisory services activities for the clients.
- Outsourcing is a growing industry in Australia. Outsourcing presents opportunities for accountants to outsource some of the lower level work which will free up accountants to be involved in offering a range of business advisory services products to the small/medium enterprise market.
Challenges
There are significant challenges facing accountancy businesses including the progressive introduction of Standard Business Reporting and other taxation lodgement changes by the Australian Taxation Office.
Whilst the jury is still out as to what the actual costs to the accountancy profession will be from these changes. the changes are expected to be quite large and will obviously affect those accountancy businesses that have undertaken no product diversification strategies.
SMSF Advice
The reported decision (Australian Financial Review – 6th April 2016) of the majority of accountants to discontinue advice to the SMSF market indicates that the majority of accountants have decided to forsake this product market.
Competition
Twenty years ago accountants had very little competition in the business/taxation market, however, every month new competitors emerge especially in the value added services that many accountants are probably hoping will enable them to develop new income streams.
The challenge that accountants need to face is that these market changes are occurring now and if you intend to offer a broader range of services as identified in the surveys of small/medium enterprise, you need to get started now rather than in a few years’ time because by then you might find that significant numbers of your SME clients have already made decisions to appoint other accountants or business advisers to handle the commercial services that the SME market has been indicating that it requires leaving accountancy businesses with the taxation work which is becoming more of a commodity product every year.
If you are interested at looking at some of the alternatives that are available to assist you to develop a range of new income streams, we would invite you to visit ESS BIZTOOLS at www.essbiztools.com.au.
ESS BIZTOOLS is presenting a special webinar to discuss the role that accountants can play to assist businesses to develop investment ready strategies so that they might be able to raise investment capital utilising Crowd Funding Equity Companies or an Early Stage Investment Company.
Whilst it is appreciated that the legislation has not yet received Royal Assent this webinar will offer accountants an opportunity to gain more knowledge on this exciting development for businesses.
The presenters include:
- Peter Towers – ESS BIZTOOLS
The opportunities for accountants from these two new types of entities (based on the legislation approved by the House of Representatives).
- Michael Murtagh – Gold Coast Angels
The opportunities for these new types of companies to raise investment capital from Angel Investors.
- Rick McElhinney – Founders Forum
Click here to register now for the webinar “Innovation Companies Formation and Capital Raising” on Tuesday, 21st April 2016 at 12.00 noon AEST.
Peter Towers, ESS BIZTOOLS. www.essbiztools.com.au
For further information, Ph 07 4724 1118
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