B042 Are you famous for adding value?

Business Advisory News for Accountants

Are you famous for adding value?

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 your accountancy practice 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 that are 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:

Debtors’ Management

Cashflow Management

Indeed, the Second Commissioner of Taxation at the ATSA conference last year 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.

Chief Financial Officer Services

Being a virtual Chief Financial Officer (CFO) for your small/medium enterprise clients.

At one stage in my career, I was a CFO of a listed public company. The thing that quite intrigued me when I first became involved in that position is that a public company basically divides itself into a whole series of small businesses and then appoints a Regional Manager to control those businesses.

The benefit that a public company’s CFO has is that he/she has a whole team of in-house experts to help them.

I submit to you that your small/medium enterprise clients basically have the same problems and. In fact, your small/medium enterprise clients could have more problems than what the CFO 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, I seriously suggest that accountancy businesses should be very keen to supply that type of service to their small/medium enterprise clients.

Cost Management Consulting

This was identified in the CCH Small Business Survey[1], completed several years ago, as the biggest problem confronting small business operators. Are you offering cost management advice to your clients?

Business Planning

Succession Planning

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 legislations 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 you 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 Capitals

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 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 adding value to your clients and this is what the SME market wants.

Subscribers to ESS BIZTOOLS receive material, papers, templates and articles on all of the subjects that I have discussed in this comment as part of their subscription to ESS BIZTOOLS. If you would like to receive further information on the services provided, please send me an email [e-mail] or visit our website at www.essbiztools.com.au.

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A complimentary copy of the paper on the processes of offering Chief Financial Officer services for client is attached with this transcript.

To receive future editions in the ‘Business Advisory News for Accountants’ series, I invite you to subscribe, FREE of charge, to our ESS BIZTOOLS – Business Advisory News for Accountants – Podcasts page on iTunes.

If you have any questions or, if you have suggestions on future items to be covered in Business Advisory News for Accountants, wherein we will look at ways and means that accountants can be more effective by offering a range of business advisory services to their clients, please do not hesitate to email me at [e-mail].

Have a wonderful celebration of the start of a new financial year and may 2015/2016 be an outstanding year for you in offering value adding services to your clients.

Peter Towers

Managing Director

1800 232 088

[e-mail]

[1]SMEs - the fine line between failure and success, CCH, April 2013