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Constant changes to the tax system, hiring and retaining staff, and understanding the impact of technology on your practice are all challenges for the modern accounting firm.
The top 4 issues facing accounting practices today
16 May 2018
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4 minute read
Here are four of the top issues for public practitioners.
1. Staying on top of tax changes
Constant changes to the tax regime mean the need for public practice accountants to stay up to date is greater than ever.
Whether those changes are intended to stimulate parts of the economy, benefit certain taxpayers, close loopholes or directly raise greater revenue, they can affect many taxpayers when only targeting the behaviour of a few, says Robyn Jacobson, a senior tax trainer from TaxBanter Pty Ltd.
At the CPA Australia Public Practice Conferences in May and June 2018, Jacobson will outline the most important changes of the last 12 months and hold master classes in Victoria and New South Wales.
“Most of the tax policy I’m seeing at the moment is in response to groups of taxpayers who are not complying,” Jacobson says.
“Sometimes there are only small groups of people in certain industries who are not complying, but the government will turn its attention to that entire industry. It’s like the old expression, ‘using a sledgehammer to crack open a walnut’.
“In some cases, there are just a few people doing the wrong thing but the government introduces integrity measures which affect everybody.”
Jacobson says some of the measures are “incredibly complex” and can increase the likelihood of taxpayers and their advisers making inadvertent errors.
“Practitioners need to be across all of these changes in order to correctly advise their clients,” she says.
2. Being alert to work-related expenses crackdowns
The Australian Taxation Office is also focusing on work-related expense (WRE) claims, with Tax Commissioner Chris Jordan repeatedly saying that the WRE gap (the difference between what you can claim and what is being claimed) is estimated to be greater than the corporate tax gap of A$2.5 billion.
Overclaiming is worse when an agent prepares the return, says Jacobson. “It is so important to remember that you must have incurred the expense to claim it; there is no standard deduction.”
“The message is that it never stands still – tax changes are a constant,” Jacobson says.
“I go out to clients once a month and speak with them about the changes, and a month later there is always so much more to talk about.”
3. Delivering to deadline without killing yourself
Public practice accounting businesses are all about client service delivery. A practice without a client service focus is not going to be in business for long. Where there used to be downtime between client deadlines, time to regroup and plan for the next project, today’s practitioners leap from one extreme deadline to the next.
“People with fantastic technical skills are being smashed by deadlines and burning out,” says Alena Bennett, leadership expert from alenabennett.com.au, who will discuss the challenge at the CPA Australia Public Practice Conference.
“It’s not because they’re no longer good at what they do. Rather, it’s because they haven’t had the opportunity to experience how leadership skills can support their superb technical skills.”
Why is there no longer any downtime?
“There is an increasing number of changes in the market and that means the volume of work is also growing,” says Bennett, a qualified accountant.
Of course, there are also changes in staff attitudes to work and to work-life balance. Where once everybody stayed until the work was complete, an exodus at 5.15pm is now not uncommon.
“That leaves the partners to get the remaining work done themselves,” Bennett says.
4. Getting clients on board with new technology
Bennett says, “There are constant regulatory changes that public practitioners need to stay on top of and guide their clients through.
“Technology continues to evolve and that can create great opportunities for practices, but it also throws up the challenges of making the right investment, successfully deploying the new technology solutions and getting their clients on board.”
Click here for more information on the Public Practice Conference.
To read the original list, see The top 8 issues facing accounting practices today.
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