Accountant's Minute 247
“The Australian economy is going to be very reliant on a suitable vaccine for COVID-19 Coronavirus if we are going to get the economy operating as it was in January 2020 once again. In the meantime, the government needs to be a bit more targeted with its financial support and businesses are going to rely on their accountants to guide them on the best way forward for the operation of their businesses”. Ashley Evans, Managing Director, AAA Financial Solutions, the keynote speaker in our COVID-19 Survival Panel webinar on Friday 25th September, said today.
Ashley’s presentation on Friday is “An Update on the Financial Position Going Forward”.
As a former Bank Manager, Ashley is in a fairly unique position as the Managing Director of a financial services organisation with an intimate knowledge and great contacts within the banking industry.
Some months ago financial commentators and other business people were indicating that they thought once we got past 27th September 2020, it would be very difficult for small businesses and medium-sized enterprises to negotiate new loans with banks. When these comments were made the expectation was that the JobKeeper Program and probably Jobseeker would end on 27th September. As we all know JobKeeper, in a slightly reduced format, has been extended to 31st December and a further reduced fortnightly support payment per eligible employee will continue through to 31st March 2021.
The Australian government is hopeful that many businesses will find they do not need to continue on the JobKeeper Program because their turnover has recovered to pre-COVID-19 levels. But this recovery will not automatically occur and many businesses are going to need the support of their accountants, banks and financial services firms, similar to AAA Financial Solutions, to be able to have the necessary financial resources to be able to trade back into a positive position.
The other keynote speaker in the next webinar is Priscilla Bea Smith, Director, Cloud Nine Associates, who will discuss some tips and tricks for future proofing accounting practices to survive the COVID-19 challenge and more : survive in the following decades. Title "The Modern Practice - Brought To You By Cloud Nine Group".
This Friday's free COVID-19 Survival Panel webinar is being presented at 12-noon AEST. You can register for this webinar by clicking here.
In our last webinar presentation within the COVID-19 Survival Panel series on 11th September, Dale Crosby, Director, High Tech Soft Touch, commented on the “Relationship with SME Clients during COVID-19”.
Dale commented that the “Financial Review” had stated that accountants had become the “Centrelink of the business world". This was in recognition of the significant extra work that many accountants have been performing in the first two weeks of each month in extrapolating the required information to support a client being able to continue to receive JobKeeper payments and, in some cases, to determine whether a client may in fact have now qualified to receive the JobKeeper support payments for their team members.
Dale posed the question “Are accountants using this opportunity to deliver a broader range of services to clients and will this enthusiasm for supplying a range of non-compliance services continue once the COVID-19 crisis has ended?”
Many people hope that accountants will be enthusiastically taking up the ongoing challenge of providing a broader range of professional services to assist small businesses and medium-sized enterprises to survive by continuing to produce relevant financial management information by the delivery of “Business Advisory Services” well after the COVID-19 crisis has ended.
Peter Towers, Managing Director, ESS BIZTOOLS discussed the challenges that many businesses will have in securing adequate business funding in the months ahead. The banks have lent a lot of money over the last 8 months and there are reports that they have considerable loan balances owed by small businesses and medium-sized enterprises which could discourage banks from proactively seeking to place additional loans to SMEs in the foreseeable future.
One opportunity that businesses, with turnovers under $25 million per annum, will have is to be able to give consideration to raising capital direct from the public as a Crowd Sourced Funding Equity Raising Company.
Peter Towers challenged accountants to become familiar with the concept of clients utilising the Crowd Sourced Funding Equity Raising status to be able to raise up to $5 million in a 12 month period from investors.
“There is a process that the Australian government has put in place to enable proactive businesses, with a vision and a good business or a good business idea, to be able to raise capital, thus meaning that they do not have to offer security, or issue personal guarantees or make monthly repayments of principal and interest”.
The government has appointed 16 business organisations as Crowd Sourced Funding Intermediaries to act as the conduit between the Australian Securities & Investments Commission and the Crowd Sourced Funding Intermediary that the company has selected and will then assist the company to get themselves into an 'investment ready' status and promote their capital raising activities to the public whilst the Intermediary will also promote the company to the thousands of businesses that they each have registered on their databases.
There is an important role for accountants to play in this overall process including:
This is interesting and varied work for an accountancy firm to undertake. It also has the possibility that the accounting firm could be appointed as the virtual Chief Financial Officer for the company.
You can view the recording of our last webinar with the presentations made by Dale Crosby and Peter Towers by clicking here.
Want to know more? If you want to know more about the services provided by ESS BIZTOOLS to assist accountants to guide clients through this very difficult time, why not visit our website www.essbiztools.com.au or:
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Episode 247 - Businesses Want Broader Range Of Services To Continue!
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