At the Australian Technology Showcase for Accountants (ATSA) Conference, held in Melbourne on 20-21 October 2014, Mr Geoff Leeper, Second Commissioner of the ATO, in an interview with David Smith, Managing Director of Smithink 2020, said that the ATO has advised the Productivity Commission that the red-tape saving from the introduction of the Standard Business Reporting (SBR) Strategy would be $500million a year. Mr Leeper said, “A lot of this would come from professional fees. This is the digital disruption for accountants.”
Mr Leeper then added, “This is all going to change the role of accountants beyond compliance. Accountants have to become business advisers rather than tax compliance experts for SME.”
Mr Leeper said, “There’s a market there for accountants to help small businesses with their cashflow problems. Businesses need help to plan and manage their businesses. With great respect, accountancy businesses could probably look at the additional services that could be provided to replace compliance and processing work as it falls away, as technology is used more and more.”
In response to Mr Leeper’s comment, we suggest that some of the areas you could be looking at include debtors’ management – assisting clients to improve debt collection procedures.
- Have your clients created a proper written debtors’ management system?
- Do they utilise a pre-prepared credit application form?
- Do they check the answers given to them in the credit application form?
- Do they check their referees?
- Are credit limits established?
- Do they ask for and receive guarantees from directors of private companies and do they then file those guarantees so they’re available at some future date when they might need them?
- Is a ‘welcome to new customer’ letter prepared, which incorporates credit limit, terms of trade, etc?
- Is consideration being given to registering a new customer on the PPSR?
- Is there an ongoing debtors’ monitoring system that swings into action as soon as the customer passes the required payment date?
- Are tax invoices prepared accurately and promptly and forwarded to customers, so there’s no excuses on why they haven’t paid their accounts?
- Does your client understand how to calculate debtors’ days outstanding and compare this to their budgeted target?
- Is the client utilising a debtors’ reduction checklist?
Debtors’ management is one of the biggest issues affecting cashflow management for small/medium enterprises. This is a good area for accountants to commence providing additional services that will be needed to replace the fees that are predicted to be lost, following the ATO’s red tape reduction initiative.
ESS BIZTOOLS supplies tools to assist accountants to deliver business advisory services that many small/medium enterprises have indicated they require from accountants.
If you would like to obtain a copy of the Information Summary of ESS Accountants Minute Issue 009 – ‘ATO Strategy will reduce accountants’ income’, please click here
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