What are the biggest issues the accounting profession is currently facing?
I think the biggest issue it’s actually the overall change that the industry is experiencing. By that I don’t mean there is one overarching thing that is massively changing the profession but that the profession is certainly going through change.
Technology is changing what our clients want and expect; it’s changing the way we process things. We are also seeing change in the services we offer, which technology is probably in part driving, but for example, with the internet there is so much information available so where in the past part of our role has been to provide this type of information, now it’s all about pinning the information together and providing the right advice. I think we are also seeing change with more part-time workers in the labour force – particularly with mothers who are returning to work, but certainly managing more part-time workers is quite different to managing the traditional structure that accountants are used to.
There are also other things people are looking at such as their process and maybe considering outsourcing or restructuring their firm.
I think these are all things that will have quite a cumulative effect on the accountancy profession but I think it’s one you don’t have to panic about but it’s one you do need to be responding to. The other thing to realise is that these issues aren’t bad things. With change comes opportunity – I don’t think of these things as threats at all.
What advice can you offer smaller firms to prosper in the changing environment?
I think the smaller firms need to pick where they want to play. The smaller firms quite often have to be across everything and I just think that it’s getting much more complicated. I think they need to understand where their boundaries are and look for other solutions. I’m involved in the tax field and you can see there is a lot of tax work that can be done by an experienced operator but I think some practitioners need to better recognise when they need to get further expertise involved.
We offer services like that to smaller firms, and so do other firms of our size. I think there can be big dangers for smaller firms getting into something that they aren’t used to. Know your limitations and be aware of the changing opportunities.
One of the opportunities that technology gives us is to have more real time information and that gives the opportunity to provide better service to the client and that’s available to all accountants. It’s not a size thing, its available for practices of all sizes.
How big an issue is the lack of succession planning in the industry?
I think it’s been bubbling away for a while and the accounting industry isn’t the only one facing this problem. Succession planning sometimes can be difficult. It can be difficult to hand over your business to someone else and even when selling your practice it’s just the same.
At the moment there are people trying to buy practices and while that provides an avenue for some looking to sell out it is still a tricky time. These purchasers know what they want and one of the things for accountants who are getting to retirement age to consider is that a lot of their clients are also looking to retire and if so, is the goodwill in the practice really as valuable as you think? One part of succession planning is looking at the robustness of your client base. You need to prepare and get your business into shape for sale. How attractive is your business? If your clients are predominantly older than yourself, than you may have an issue.
How big an impact is the increasing popularity of SMSFs having on the profession?
We are a fan of the SMSF model and certainly can see that it does work but there has been a lot in the press about gearing and going into property that we don't necessarily think always works. That may work in some situations but not in the general case. We see it as more building an asset separate from your business so it’s about asset protection and a whole-of-life investment vehicle.
To me where it is linked to the business but providing a separate asset, that’s always worked very well. We haven’t really seen anything of people using an SMSF to buy a geared residential property but as a business owner holding commercial property, that really works well.