Jan 26, 2016
Just as accountants are facing up to the implications of the Standard Business Reporting (SBR) system that is currently being introduced by the Australian Taxation Office (ATO), together with the prediction from the ATO that small/medium enterprises will save $500M per annum, primarily in lower accounting and tax agents’ fees and the continuing encouragement to wage earners by the ATO to lodge their returns online by e-tax, thus reducing accountants’ and tax agents’ fees by approximately another $200M per annum.
The government looks set to come to accountants’ assistance once again! Remember the GST?
The Innovation Statement, announced by the Prime Minister Malcolm Turnbull 7 weeks ago, identified that the government is keen to encourage an “ideas boom” and a “culture of risk taking”.
Many of the initiatives announced by the Prime Minister will offer accountants a tremendous opportunity to offer services to assist entrepreneurs to get “investment ready” so that they’re acceptable to potential investors.
The Innovation Statement includes details of a new type of company (details are yet to be announced) that has to be incorporated in the last 3 years. The company cannot be listed on a Stock Exchange, has expenditure of less than $1M and sales of less than $200,000 in the previous year. Investors in these types of companies will be able to obtain a 20% tax offset on their investment, capped at $200,000 per annum. Investors will also be able to utilise the Capital Gains Tax exemption if they hold the investment for more than 3 years and dispose of their investment within 10 years.
The government is also introducing a special category for crowd funding investors for companies that wish to raise money utilising “crowd funding”. Eligibility relates to public companies that will be eligible to raise up to $5M per annum, with the investor limit being $10,000 per company, per annum. The regulations will be released shortly.
All of these entities will require assistance to get their “house in order” if they’re going to be able to successfully raise capital.
The government has indicated that at least 4,500 businesses could not raise capital last year. How many more will emerge with the government’s Innovation Statement encouragement?
This initiative will present accountants a great opportunity to introduce a range of business advisory services.
The ATO has identified that a “real service” that accountants could offer small/medium enterprises would be in cashflow management.
It’s interesting to note that, in December, the Commonwealth Bank of Australia released “Accounting Market Pulse”, which predicted that the top 2 service lines to enter and grow over the next 12-18 months for accountants are:
It seems that the “stars are aligning” for accountants as tax returns become more of a commodity product. The government’s Innovation Statement and small/medium enterprises’ repeated statements over the last decade that small/medium enterprises require additional non-compliance services could be a major plus for accountants, but will it?
There are other business organisations and, indeed, accountants who have seen the light and are already offering business advisory services to small/medium enterprises. Other consultants and some accountants will fill the void if accountants don’t offer a range of non-compliance services to business clients.
Now is the time to get started on getting your accountancy business prepared to offer business advisory services. Not every small/medium enterprises is going to sign up for a wider range of services. That’s why accountants need to start now!
ESS BIZTOOLS is presenting a special webinar on Wednesday 3rd February 2016, featuring “Starting in Business Advisory Services”. You’re invited to register to attend this webinar, free of charge, which will give you a great introduction to getting ready to offer business advisory services. Click here to register to attend.
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Accountants may very well be the lucky profession, however every accountant will have to work for success if they want to be part of the next evolution of accountancy businesses in Australia, offering business advisory services to small/medium enterprises. You need to prepare now!