Australian small businesses have faced their fair share of challenges over the past two years, starting with the bushfires in early 2020 to COVID-19 outbreaks and lockdowns to, most recently, major flooding across NSW and Queensland.
These disruptions, as well as the flow-on effects of labour shortages, soaring energy costs and rising inflation, have made it difficult for many businesses to keep operations running as usual.
We’ve all seen the important role that nurses, cleaners, truck drivers and childcare workers, now known as essential workers, have played during these crises. For many small businesses, accountants, bookkeepers and financial advisors have been their essential workers in the face of increasing uncertainty and disruption.
They have been essential in helping businesses plan, brace, recover and rebuild for the future and regain confidence in their operations as the world starts to look like a former shadow of itself once more.
Accountants are essential for business survival
For small businesses that traditionally relied on serving customers through face-to-face interactions, such as the retail and hospitality sectors, it’s been a hard slog with restrictions and closures. When it was clear that business wasn’t going to be the same as before, the first phone call from small business owners was likely to their financial advisors. These questions weren’t tax-related but rather on the survival of their business:
“We’ve just been ordered to close the shopfront. I have no other way of making money than from these face to face interactions; what can I do?”
“Can you work out for me how long I have before I need to start reducing my headcount? I want to keep my team on, but if the business goes under, that helps nobody.”
“I’ve been thinking about another line of business, as we go fully remote. Can I run this model by you and can you think of who could help me fund it?”
“Do you know anyone I can subcontract my team to so I can keep them together once this blows over?”
Almost overnight, the vast majority of bookkeepers and accountants went from the tax agents you only call at BAS or EOFY time to critical business advisors that can help you model, craft and calculate the future of your business. This included advice on budget v34, regular cash flow forecasting, supplier negotiations on terms, renegotiating existing financing, pricing reviews and funding applications – just to name a few.
Bookkeepers and accountants are now a business lifeline, particularly when applying for government grants and payment packages to keep employees paid and the lights on. There were indeed a lot of grants to navigate, submit financials for and justify, including the Australian Government Disaster Recovery Payment for the flooding in NSW and the Small Business Assistance Grant for those affected by lockdowns in WA.
To manage multiple requests, many accountants use software tools like Ignition, which provides templates with updated services and terms that accountants can import into their service libraries.
Accountants are essential for rebuilding business confidence
These events have not only had significant financial implications for small businesses, but they’ve also taken a toll on the mental health of small business owners. Research conducted by the Department of Industry, Innovation and Science on small business and mental health in 2020, found that one in three small business owners reported a medical diagnosis in the past 12 months, of either stress, anxiety or depression.
Further, the research revealed that 25 percent of small business owners sought advice from their accountants. Exceptional client relationships are at the heart of every professional services business and in many ways, accountants have become part business advisors and part counsellors. Over the past two years, we’ve seen the role of accountants evolve from solely providing tax advice to offering emotional support.
There are countless examples of accountants going above and beyond to help their clients deal with financial and personal losses, and rebuild confidence. For Andrew Van Beek, Founder and Head of Purpose at Illumin8, it was running a series of COVID or JobKeeper webinars to give clients useful information outside of usual practices: “We’ve put a lot of effort into making these webinars authentic and personal. We respond to questions, encourage interaction, and generally try to make them feel kind of like a forum with our Q&A sessions.”
Some accountants, like Advise Accountants, provided free JobKeeper services. As Director Matt Sharwood said: “Customer relationships are our main priority – it’s not about making a quick buck in the here and now. Our customers appreciate that we don’t bill them for every single thing that we do, especially in times of need, and this is then reflected in their lifetime value. It’s not just the decent thing to do – it also makes strong business sense.”
Accountants are essential for planning for the future
Accountants are not only in the trenches, but they’ve also got one eye on the horizon. For small business owners, accountants are increasingly seen as long-term partners and advisors, who have helped to navigate their business through the toughest period and can pull the right levers to drive growth and improvement.
By having direct access to clients’ business data, accountants can help small businesses review their business plans and incorporate strategies to reduce costs or improve cash flow. For example, accountants can identify what financing is needed to cover any projected cash shortages for the next three months and then review how this can be covered with loans, government assistance and other working capital solutions.
Even during times of economic uncertainty, opportunities will emerge for small businesses to grow. Accountants can help to ensure these opportunities are consistent with the business plan and can be properly funded. For example, identifying new tax incentives to adopt digital technology or upskill and train employees and providing advice on leasing and purchasing property and equipment to expand operations.
Accounting professionals today are more than just tax filers; they are business partners, coaches and supporters who are essential to navigating the uncertainty and crafting a future path for your business. Small businesses should consider accountants as a long-term investment, and relationship, for future success.
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