Small accounting practices feeling the squeeze

Specifically, Singh said transitioning from quarterly superannuation guarantee payments to Payday Super has placed an additional burden on small practices.

“These regulations might change at the government level, but eventually somebody has to explain how it works to the client and how it affects their business,” he said.

“The changes came into effect on Wednesday 1 July this year. How did that impact businesses that ran their payroll on 3 July, for example? Payday Super requires those business owners to pay their employees’ SG at the same time as their salary and wages rather than on a quarterly basis. It’s a different world for them now.”

On top of this, accountants have to comply with new AML/CTF regulations and adopt new technological and AI tools into their practice, Singh said.

He noted that while larger firms may have separate HR, IT, and even technology teams to implement new regulations and tech tools, small practice owners do not have this luxury.

“In a smaller practice, I’m the adviser, the practice manager, and the technology decision maker,” Singh said.

“I’m responsible for implementing all the reforms.”

How could ATO and associations help?

When asked if he feels supported by the ATO and associations to understand and implement these changes, he said: “I don’t think they’re helping”.

“I’m not against the ATO or any other organisation, but I think we’re just talking at this point. We’re not putting anything into practice.”

“It’s becoming difficult dealing with the ATO nowadays. For the smaller practices, I feel like the audit regimes are mainly grilling the accountants rather than helping them. I remember helping a friend who runs a Sydney-based accounting firm. When he had his first audit from the ATO, he felt like it was more of a grilling than helping.”

To remedy this, Singh encouraged the ATO to better educate accountants on profession-wide changes through more frequent, earlier communication. He also called for digital integration so that the ATO’s systems interact seamlessly with those in accounting practices.

“I don’t see the ATO portal using any AI tools to help us understand how to identify which clients would be most impacted by the obligations and which clients to look at first from the debt side,” Singh said.

A recent Tax Ombudsman review found inefficiencies in the ATO’s online service for agents (OSfA) and recommended an improvement to its Practice Mail web portal service, improving OSfA’s self-service and prioritising agent needs.

The review found that action on 100 changes to OSfA is pending in the ATO’s system improvement backlog. The ombudsman said that some of these changes have been on the list since before 2022.

Clients want everything yesterday

Singh also said the challenges around meeting changing and surging client expectations. While clients previously contacted accountants only during tax or BAS time, or on a quarterly or annual basis, they now expect accountants to act in an advisory role, he said.

“They don’t distinguish between advisory and compliance.”

“For example, if they want to recruit staff, buy a vehicle, or sort out their cash flow and payroll, they expect their accountants to think through it. Technology and AI are definitely helping them.”

The challenge for accountants, Singh said, is being accessible while maintaining the boundaries and ensuring that the advice is accurate.

“Sometimes, a client may text us the query. If we’ve not responded in the next half an hour, the client has responded with an AI-driven answer.” 

“Then he's asking you if you think the answer is correct. We need to make sure that the advice is not rushed. Sometimes, we need to slow down and understand the facts to ensure we get the advice right.”

Training next-gen accountants

As AI automates several administrative tasks, Singh said he wonders how older accountants are preparing junior accountants and graduates for this new tech-driven world.  

“I did bookkeeping early in my career, where I understood how to do reconciliations and the paperwork. Now it’s all automated. The software will tell you which transaction to look at.” 

“If AI and automation are completing all that foundational work, we need to figure out how to help junior accountants undertake those tasks. There’s a risk that we are boosting efficiencies but failing to help the next generation of accountants develop those fundamental skills.”