Dec 13, 2016
Hello, I'm Peter Towers, Managing Director of ESS BIZTOOLS. Welcome to Accountants Minute.
What services are you going to provide in 2017 which create a WOW factor?
Last week we talked about Chief Financial Officer services, Debtors' Management, Personal Property Securities Register Due Diligence (a major risk management area) and Succession Planning.
Today I want to move further into other services that accountants and business advisers can perform to help your clients overcome the commercial problems that they are confronting.
The first one I want to start with is raising finance; this can take many forms of course, e.g. loans, share capital, early stage innovation company.
For loans from banks or other financial institutions, your clients are going to require budgets and cashflow forecasts and, in many cases, business plans.
Don't forget that Section 708 of the Corporations Code is still available to raise capital for private companies and now we have the special category - Early Stage Innovation Companies for companies which have developed new products, processes, services, organisational or marketing methodologies or other types of new services, which are able to raise capital and there are real benefits for the investors because the investors can receive a 20% tax offset based on their investment and a capital gains tax exemption, which can last from the end of the first twelve months of the investment to the end of the ninth year of the investment.
To perform well in 2017 your clients are going to require assistance with government grants. Don't forget the grants; they are there and why not appear to be very proactive to your clients.
Clients will require business plans, budgets and cashflow forecasts, business valuations, information memorandums and some mentoring and coaching on how to make an investment pitch. These are the key added services that clients are going to require if they are trying to seek capital from investors. You can provide these services.
Another big area is director's duties and responsibilities. I conducted an all-day seminar a couple of weeks ago for a group of directors and it was amazing the questions that the directors asked about various aspects of their companies. They all had accountants and I really wonder why they were not asking their accountants some of the questions that they raised with me.
This obviously indicates that clients need assistance with corporate governance understanding, not only the Corporations Code but the Workplace Health & Safety laws, the Consumer Finance laws and the Fair Work Australia laws; all areas that company directors can get into strife over.
Do your clients really understand the financial accounts you're producing for them? Perhaps you should ask your clients to take you through their accounts. I think you'll find that many of your clients do not understand key performance indicators, their gross profit percentage calculation. Are you preparing accounts on a departmentalised basis so that they have a separate set of accounts for the bar, for the restaurant, for the accommodation, if the client is running a motel?
When I go through and analyse the key portfolios within a company I add up over 45 separate tasks ranging from:
Have you thought about sitting down with your client and encouraging them to allocate those portfolios to members of the management team and to other people in the organisation so that those duties are effectively delegated throughout the organisation? There is then effective follow-up undertaken each month.
I believe what your clients are looking for is a five year business vision. Where do they want to be in five years' time? Some of the directors that I met with a couple of weeks ago indicated that they wanted 100% growth in their businesses, a couple of them were even higher than that, but most were around a 50% to 60% growth factor over the next five years.
That then brings to account a number of other key questions:
I think 2017 is going to be the year that clearly establishes that the accountancy profession, if it wishes, can create another area of speciality. Just as we have taxation, taxation planning, audits, insolvency and financial planning; business advisory services is one of those key products that many in the profession will embrace.
Just as you now see medical GP practices with signs out the front or on the internet identifying the specialities the GP practice has developed so, I believe, we're going to see more and more of that within the accountancy profession.
The question that you need to answer is are you going to be part of this new wave of service offerings to offer business advisory services to your clients and, if so, I would urge you to be fully committed to this process in 2017.
Have a great Christmas and may 2017 be a very prosperous time for you, your family and your accountancy business.
MANAGING DIRECTOR – ESS BIZTOOLS PTY LTD
+61 7 4724 1118 | 1800 232 088