“Future Proofing” Includes SMEs Debtors’ Management

Accountant's Minute 161

Welcome to Accountants Minute.

There are two major issues for accountants to consider relative to “future proofing” and SME debtors’ management:

  • Australia has the dubious title of having the “longest debtors’ days outstanding in the world”.
  • Offering proactive debtors advice is a significant contribution to “future proofing” for accountants.

The problems to be solved include:

  • Identifying the clients with high debtors’ days outstanding – over 40 days.
  • Identifying clients who are contracting and receiving progress payments. These will probably be trades and subcontracting businesses who are contracting with contractors and larger business organisations which could encounter a problem with a liquidator.

The consequences of this are that the liquidator might then decide that some of the progress payments made to your client have been made in such a way that the liquidator deems that these payments were “preferential payments” and that the liquidator then issues a demand for the repayment of the “alleged preferential payments”.

Whilst your client might be able to get some re-dress from the courts, this is costly and might not be successful.

If your client had registered on the Personal Property Securities Register, in all probability they will have avoided this problem!

  • Do your clients have a written debtors’ system covering these items?
  • credit application form
  • processes for checking credit application
  • approval of credit application and establishing – limit and payment terms
  • welcome to new customer letter including:
    • Terms of Trade Agreement
    • Retention of Title Agreement
  • follow-up to receive the signed documents back from the new customer
  • decision on whether to register the customer on the Personal Property Securities Register
  • processes for the preparation of the tax invoice – showing due date for payment
  • calculation of debtors’ days outstanding at the end of each month
  • collection processes
  • alert in relation to approaching payment date
  • follow-up if payment not received
  • debt collection processes

What do you need to do to perform your duties as the “Trusted Advisor” to your small/medium enterprise clients who, in most cases, will not be employing people with sufficient knowledge and training for this very important process?

The process commences with submitting a proposal and quotation to your client.

Advising your clients on improvements in debtors’ management is a proactive service that will assist your clients to operate their businesses and will contribute to “future proofing” your accountancy business because, in most cases, this will be a new source of fees.  Indicative fees for these services, if you are utilising ESS BIZTOOLS’ products, are:

Debtors’ Management Review - $900 to $1,800 (plus GST)
Debtors’ Systems Manual - $300 to $500 (plus GST)
Personal Property Securities Register Due Diligence Review - $900 to $1,800 (plus GST)

SMEs need assistance from their “trusted advisor” to solve these problems.  This is “future proofing” in operation. 

ESS BIZTOOLS has developed a range of product packages to assist accountants to offer services for most services that SMEs require.  You can subscribe to these packages individually or in an overall package.   Individual product package subscriptions for the services mentioned in this commentary are:

Debtors’ Management Review Package - $440 (incl GST) (Click here) for details
Debtors’ Systems Manual - $242 (incl GST) (Click here) for details
Personal Property Securities Register Due Diligence Review - $550 (incl GST) (Click here) for details

These packages are also part of the ESS BIZTOOLS’ Silver package which is the featured “new financial year promotion” with a 25% discount for 24/7 access for 12 months for $1,641.75 (incl GST) normally $2,189.  For details of the ESS BIZTOOLS’ Silver package please click here.

If you would like to view a 30-minute webinar on Debtors’ Management utilising the ESS BIZTOOLS’ product package click here.

You are invited to participate in free webinars being presented by ESS BIZTOOLS:

  • Capital Raising for SMEs - Tuesday, 24th July 2018 at 12.30pm AEST - to register click here
  • Identifying Grants for Clients - Monday 30th July 2018 at 12.30pm AEST - to register click here
  • Chief Financial Officer Services – Tuesday, 31st August 2018 – to register click here

Free article

(Click here) for a complimentary copy of the ESS BIZTOOLS’ Business Plus Client Newsletter for July 2018 which you can badge and send to your clients.  The newsletter is targeted at SME clients and prospects.  This edition contains commentary on:

  • Do You Want More Time?
  • Elimination of Waste is a Key Management Challenge
  • Grant for Mining Support Industry Participants
  • PPSR Misunderstanding Could Cause Big Problems
  • Reducing Debtors’ Days Outstanding is Important
  • GST – Now Applies to all Overseas Purchases

If you are interested in accessing ESS BIZTOOLS’ Business Plus Client Newsletter on an ongoing basis, you can subscribe for this individual product (which is also available as part of the ESS BIZTOOLS Silver package) for 12 months. (Click here for details).

If you have any questions on any aspect of the products or services being produced by ESS BIZTOOLS to assist accountants to “future proof” your businesses, please do not hesitate to contact us – peter@essbiztools.com.au or telephone on 1800 232 088.

Have a great day!

Do You Want More?

To gain an overview of what is included in the ESS BIZTOOLS’ icon goldGold Package. Please contact us for further information.

To download free material click the link below:-

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