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 the accountancy business 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 competition. One way to become “famous” and to insulate yourself from some of the changes occurring in the marketplace is to offer a broader range of commercial services, commonly known as “business advisory services”.
What’s included in “business advisory services”?
Let’s take a few moments and look at what some of these services are:
Assisting clients to reduce debtor balances.
The national debtors’ days outstanding is currently 51.6 days (Dun & Bradstreet).
You could potentially add thousands of dollars to your client’s cashflow by helping them to improve their debtors’ system.
Indeed, at the ATSA conference last year, the Second Commissioner of Taxation publicly recommended that accountants should become the cashflow management consultants for small/medium enterprises as one way of offsetting the $500M per annum income reduction that’s going to affect accountants.
Chief Financial Officer Services
Being a virtual Chief Financial Officer (CFO) for your small/medium enterprise clients.
The benefit that a public company’s CEO has is that he/she has a whole team of in-house experts to help him/her.
Your small/medium enterprise clients basically have the same problems as a Public Company. In fact, your small/medium enterprise clients could have more problems than what the CEO of a public company has and they haven’t got the benefit of the in-house people to assist them.
In the financial side of those services, your accountancy business could supply additional services to your small/medium enterprise clients.
Cost Management Consulting
This was identified in the CCH Small Business Survey, completed several years ago, as the biggest problem confronting small business operators. Are you offering cost management advice to your clients?
Business plans are like maps for tourists. These are a great tool that accountants can prepare to assist clients to articulate their business vision. Most of your clients will need assistance with this task.
There are thousands of businesses coming on the market for sale. To build value for your clients, you could assist by implementing a long-term (2 to 3 years) strategy to maximise the business’ value.
Personal Property Securities Register – Due Diligence System
This is one of the real “sleeping issues” confronting every business in Australia. The only time you really know about it is if one of your clients unfortunately gets involved in a transaction with a business that has an insolvency event and then your client could be wiped out, basically because they didn’t spend $7.50 to register a transaction on the Personal Property Securities Register.
According to my research with our subscribers, utilising our Personal Property Securities Register System, less than 5% of small/medium enterprises have a clear understanding of how this legislation operates.
Identification of Grants
The Australian Federal, State and Territory governments allocate nearly $5B a year for grants, incentives and special loans for businesses. Are your clients receiving their fair share of these grants, because after all they are all paying for them through their taxation?
Strategic Management Advice
Many of your clients are looking to grow their businesses and they are concerned about things like corporate governance, how to go about appointing an external person to their Board of Directors or their Board of Advice. What type of growth should they try to achieve over the next three to five years?
Assistance in Raising Capital
Getting prepared to raise capital is also a very important issue as more and more businesses are looking to grow beyond the $2M barrier and to grow into businesses of $5M to $20M turnover. Many of those businesses will be very interested in trying to get themselves prepared to be able to raise one or two million dollars from Business Angel Investors.
These are some of the challenges that confront accountants in 2015/16.
Accountants Can Assist
One way to clearly differentiate your services is to offer these types of products to your clients. Then you could become “famous” for building value to your clients and this is what the SME market wants.
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