Smaller Accountancy Firms Can Benefit By Delivering Business Advisory Services

Accountant's Minute 260

There is a range of services beyond taxation, that smaller accountancy firms can provide to their SME clients, to assist those businesses to grow and add value.

Amanda Gascoigne, an experienced Consultant to smaller accountancy firms, together with Peter Towers, Managing Director, ESS BIZTOOLS are the presenters of the ESS BIZTOOLS’ Business Advisory Services Update Webinar/Conversation on Wednesday, 24th February 2021 at 11.30am AEST (12.30pm AEDT).  To register for this free webinar click here.

Some of the services that can be provided which offer interesting professional work for an accountant and will be welcomed by many clients include:

  • Review of Charge Out Rates Used by Tradies to Achieve Targeted Profits.
  • Review of Charge Out Rates for Professional Services Firms to Achieve Targeted Profits.
  • Analysis of Retail Businesses - Product Mix, Mark-ups, Salaries, Overhead Expenses - How does this all fit together to achieve a targeted profit for the business?
  • Debtors’ Management – What are the business’ debtors’ days outstanding? - How can this be reduced? -Do your clients have a written debtors’ system?
  • Research and Development – How many of your clients have “researched” ideas during COVID-19 lockdowns? – Some of them could need your assistance to claim the Research and Development Incentive Rebate.
  • Buying a Business.
  • Selling a Business.
  • Succession Planning.

The conversation between Amanda and Peter will particularly target suggestions for accountants, operating in smaller firms, as to how they can assist clients with this range of services.

Research And Development Could Start A Trifecta For SME Companies

This was the theme for the discussion held by Peter Towers with Andrew Geddes, Former Chair of Greencross Ltd and Accounting Industry Mentor in our most recent Business Advisory Services Update Webinar/Conversation held on 17th February 2021.

In the presentation Andrew Geddes asked Peter Towers a number of questions relative to research and development and the flow-on potential for companies, which have undertaken research and development, from the Federal government’s Accelerating Commercialisation Grant and the possibility of the company being able to raise capital from the public as an “Early Stage Innovation Company”.

The Research and Development Incentive Rebate is available for companies that have spent more than $20,000 on legitimate research and development expenditure in a 12 month period.

If the company’s annual turnover is under $20 million the Research and Development Incentive Rebate is 43.5% of eligible research and development expenditure.

If the company is trading at a loss, the company can receive a “cash refund” calculated at 43.5% of eligible research and development expenditure.  The rebate amount must be less than the company’s losses.

ESS BIZTOOLS is releasing its new upgraded “Research and Development Product Package” in a special free webinar being presented on Thursday, 25th February 2021 at 11.00am AEST (12-noon AEDT).  You can register for the webinar by clicking here.

The Research and Development Product Package has been divided into a number of sections which include:

  • Getting Ready
  • Planning the Research and Development Work Project
  • Protection of Intellectual Property Developed from R&D Activities
  • Systematic Progression of Work
  • Labour Flowchart
  • Supporting Research and Development Expenditure
  • Feedstock Adjustment
  • Recordkeeping
  • Research and Development Tax Incentive Checklist

The Accelerating Commercialisation Grant is available to companies with annual turnovers from $0 - $20 million for each of the last 3 years, if the company has a novel product, process or service that it wishes to commercialise.

Most companies interested in accessing the Accelerating Commercialisation Grant will have undertaken research and development to be able to develop the novel product, process or service.

Applying for this grant is a logical step for some companies to “commercialise” their research and development activities from a prototype to a complete product.

Companies cannot apply for this grant if the company has completed its first “commercial sale”.

The maximum grant is $1 million, which is funded on a 50/50 basis with the company.

The Final Part Of The Trifecta Is “Early Stage Innovation Companies”

The company must be under 3 years of age but, in some cases, can be up to 6 years of age.

Turnover in the last 12 months must be less than $200,000, not including any grant monies from the Accelerating Commercialisation Grant.

Expenditure in the last 12 months must be less than $1 million.

The company must pass one of two tests to attain the status of “Early Stage Innovation Company”.

These tests are the Gateway Test and the Principles’ Test.

The Gateway Test requires a company to accumulate, at least, 100 points from a series of activities that the company has undertaken.

The Principles’ Test requires the company to supply detailed answers to five questions relative to the company’s ability to proceed with commercialisation of the products, processes, services, marketing or organisational methods.

The Gateway Test is undertaken on a self-assessment basis and, if the company passes it, is able to produce due diligence documentation produced by ESS BIZTOOLS’ product package to negotiate with investors.

If the company believes it has qualified under the Principles’ Test, an application has to be submitted to the Australian Taxation Office for review and certification if the company has qualified as an early Stage Innovation Company.  The company then has the Australian Taxation Office document to be attached to the due diligence documentation produced by ESS BIZTOOLS’ product package to negotiate with investors.

Investors are interested in Early Stage Innovation Companies because investors, who are acting at arms’ length, are able to claim 20% of their investment, up to specified amounts, as a tax rebate.  The tax rebate for a sophisticated investor is 20% of the investment, up to maximum rebate of $200,000.

The tax rebate for a retail investor is 20% of the investor’s investment, up to a maximum of $10,000.

If the shares allocated to these investors are held for longer than 12 months and less than 10 years, those shareholders will not be subject to capital gains tax when the shares are sold.

This trifecta of transactions started with a basic “idea” as a research and development concept, was able to expand into a full research and development project.  The company could then possibly apply for an Accelerating Commercialisation Grant and could utilise its research and development activities and receipt of the Accelerating Commercialisation Grant (as well as having a sound business case) to be able to be classified as an Early Stage Innovation Company, which will be a significant advantage for the company to be able to raise capital from investors to finance the company’s commercialisation activities.

You can access the recording of the conversation between Andrew and Peter by clicking here.

Brad Smart’s Tip Of The Week (“Selling the Message”)

“2020 was certainly a tough year for everybody.

Now, as the New Year begins, most small/medium-sized accountancy businesses are looking to get back in the game.

The smartest thing any business can do post COVID is to reconnect with its existing client base.  You’ve got to get out and let them know you’re still in business.

The simplest way to do that is to use your client database and email them a basic newsletter.

It’s not hard!

Write a 200 word article on something you do, that you know will get their attention, then fill out the rest of the newsletter talking about your staff and what value they add.  You can even add a photo or two.  If you use Word, Mailchip or MailPoet, you’ll find plenty of newsletter templates.

By doing this, you’re shoring up the base of your previous and existing clients, so you can put extra effort into generating new business.

If you need some help with this, or you just want to bounce an idea off me, give me a call - 0418 311 011”.

Upcoming Webinars




Wednesday 24th February 2021 at 11.30am AEST (12.30pm AEDT) - Amanda Gascoigne, Amanda Gascoigne Consulting

“How All Types Of Accounting Firms Can Benefit By Delivering Business Advisory Services”

Thursday 25th February 2021 at 11.00am AEST (12-noon AEDT)

Research and Development Product Package - Familiarisation for Accountants

Wednesday 3rd March 2021 at 11.30am AEST (12.30pm AEDT) - Paul Barnaby, PlanGuru

“Predictive Accounting Using PlanGuru and ESS BIZTOOLS’ Products”

Wednesday 10th March 2021 at 11.30am AEST (12.30pm AEDT) - Priscilla Bea Smith, Cloud Nine Associates

“Accountants Time to Shine - Offer Research & Development Services”

Wednesday 17th March 2021 at 11.30am AEST (12.30pm AEDT) - Peter Milla

“Converting R & D To Return On Investment”

Wednesday 24th March 2021 at 1.30pm AEST (2.30pm AEDT) - Mark Holton, Director, Smithink Pty Ltd

“Research & Development Can Assist Accountants To Differentiate Their Services”

Wednesday 31st March 2021 at 11.30am AEST (12.30pm AEDT) - Matthew Karakoulakis, Principal Solicitor, AMK Law

“Legal Issues Relative to Research & Development”

Challenges Ahead

You are most welcome to visit our websites – or where you can obtain information on government grants that are available for an individual client.

If you are interested in obtaining a free, no obligation overview of the Business Advisory Services Product Packages developed by ESS BIZTOOLS to assist accountants to deliver a wide range of Business Advisory Services without you having to reinvent the wheel by spending hundreds of hours in writing the material, please “Book A Demo” on the ESS BIZTOOLS homepage – or contact Peter Towers:


Telephone: 1800 232 088

Stay safe!

Have a great day.

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Smaller Accountancy Firms Can Benefit By Delivering Business Advisory Services