The accountant partnership: Supporting the ‘thankless’ role of business ownership

“If you’re in a very complex regulatory environment with state obligations, federal obligations, you can be ‘lost in the trees’, a little bit, about what is urgent, what it really needs attention, and what is not as urgent,” Hume told the brand.

“There’s a lot of work involved in a small business, it’s very thankless. It can be very brutal for business owners to have to keep up with everything.”

The educative role of accountants

For Hume, the educative role that accountants play for their clients is particularly critical for small-business owners.

“It is really important, because tax is very complex, and even in the small-business space, a lot of clients come to you with parts of this and parts of that, and you’ve got to fill in the gaps,” Hume said.

One of the more difficult concepts to explain to small-business clients is Division 7A, Hume told the brand.

“Separating the legal requirements that you have with tax and other obligations can be difficult on occasions. That’s where Division 7A becomes difficult to explain for directors,” she said.

“I think the hardest thing for business owners is to separate themselves from the business.”

“When business owners work hard in a business, there’s an emotional investment, so I think it’s hard to take a step back and look at the business objectively and see that the business can be sold on its own without the owner.”

“The business has certain rights and obligations where the business owner is separate from the business, and that’s a hard thing to get across. When I explain it to clients, I’m explaining that the business runs in this bucket, but you personally are over in this bucket over here; you’ve got to separate the two.”

Hume noted that small-business owners also struggle to understand their responsibilities as directors and how they could be personally liable for penalties.

“I think there’s a common misconception that if things go wrong in a company, that [directors] are completely protected from directors’ duties,” she said

“I often feel there should be a lot more education around what directors are personally liable for in a business, and that if the business fails or something were to happen, it’s not just a straight fix, such as shutting down the business; there is some personal liability in running a business.”

Providing tailored advice

Hume told the brand that it can be very difficult to provide thoroughly customised advice for all clients when accountants serve an extensive list of clients.

“That is really difficult. I think that’s a management issue. You go through your client list, then you work out what is valid for which person. These are all extra costs that come about due to all these changes, and unfortunately, business owners are going to bear these costs [of the new tax changes], because they’re happening,” she said.

She stressed that an accountant-owner partnership is integral for understanding the client’s business, how they operate, and what they are going through in order to serve them well.

“When you look at their clients, you should look at their personal circumstances and situation. I know a lot of business owners who go down and get their advice from their mate. Those things may not necessarily fit your personal circumstances, so I think it’s got to be a bit of a partnership,” Hume said.

“It’s not all one size fits all. There are technical things that happen that need attention, but may not necessarily fit your personal situation.”