“One extreme to the other”: how accountants and their clients are faring

Content Summary

Helen Hawkes | October 2020

This article was current at the time of publication.

If COVID-19 has shown us anything, it is that life – and business – can be unpredictable.

More than six months after the pandemic hit globally, public practitioners are still having to deal with a grab bag of client successes and failures no one foresaw.

They are also more in demand than ever, especially in hard-hit Australian areas, where clients are more likely to qualify for the next phase of JobKeeper than in New Zealand, where the wage subsidy extension requires a greater decline in actual or predicted trade.

“We’re busy learning the details around the next phase of JobKeeper, and clients who are late in filing business activity statements or tax returns are showing up on our door,” says Bernadette Smith CPA, director of Perth-based Aspen Corporate and chair of the WA Division of the CPA Australia Public Practice Committee.

“The work we projected for a year is coming into the office now,” Smith says. “All our 33 staff need holidays, but they won’t even be getting [the] traditional Christmas close-down.”

Struggling to meet demand

As a result, many public practitioners are facing potential burnout.

Even in South Australia, which has not been as severely impacted by COVID-19, principal of SumTotal Accounting & Business Karen Conlon FCPA says coming to grips with government support initiatives and keeping up with the increased workload has been “pretty tough”.

“At the start, clients didn’t know what was going on and we were inundated with phone calls,” says Conlon, who is also deputy president of CPA Australia’s Divisional Council South Australia.

“Other work, including tax returns, is still six to eight weeks behind and now we’re looking at JobKeeper phase two, having to revaluate all businesses again, and planning to do so in December too.”

Pauline Pickering CPA, co-Director of Globe Accounting in Warwick, Queensland says that like most public practitioners, the firm is struggling to cope.

“I’ve never read so much legislation,” Pickering says. “When it came to this tax season, we were feeling quite exhausted and overwhelmed.”

Pickering and her 18 staff have been reaching out to colleagues and peers.

“I’m also part of a few great Facebook small business groups where I have been able to stay connected and share questions and answers about JobKeeper, or cash flow boosts,” she says.

Michelle Frey CPA, Director of Hermann & Associates in Melbourne and current chair of the Victorian Public Practice Committee, says clients have learnt how to manage their stress levels since the pandemic started and were in non-stop contact.

However, there are still business challenges from the second lockdown in Victoria until October 25 this year.

“My two staff and I are not able to meet face-to-face to review files and we can’t access the office to get other files that we need,” Frey says. “This has made the review process a lot longer than normal.”

A change of mood

New Zealand-based Helen Fortune CPA, partner, business advisory services at Grant Thornton, says that – at least in Christchurch – the workload and confusion public practitioners faced initially has settled a little.

“At the start of lockdown, we had landlords phoning because they felt obliged to offer rent reductions, but they were also concerned about the impact on their businesses,” Fortune says.

“Some said they just wanted to close the door then, a few days later, decided that’s not what they wanted to do.

“But once the COVID-19 case numbers started to show we were on the right path, the mood completely changed.”

Fortune says clients in the hospitality industry are now experiencing a surge in business.

“We have very widespread clients, from farmers for whom the wool price is currently less than the cost of getting the sheep shorn, to hospitability clients who are now going absolutely gangbusters.”

The firm also looks after a variety of primary industry clients who are struggling to find employees, as previously a large percentage were foreign workers.

“We’re expecting the same problem in other industries,” she says.

Prue McStay CPA, Director of Astute Mode and chair of the Public Practice Committee in Christchurch, says clients in professional services such as engineering and project management have returned to businesses that have grown beyond what they were pre-pandemic.

“An interior furnishing client has had a 40 per cent increase in revenue this financial year because dollars earmarked to be spent on travel offshore are now being spent on projects close to home,” McStay says.

“Hair and beauty salons – heavily impacted during lockdown – have also been run off their feet since being permitted to reopen.

“However, clients in those sorts of industries are living on tenterhooks as to where [and when] the next outbreak will be,” she says, adding that although no clients locked up their doors for good, some came close in lockdown phase.

With this in mind, her five team members have been doing a lot of numbers regurgitation and scenario planning.

Mixed fortunes

Of course, Australian accountants are also familiar with crunching numbers after witnessing the mixed fortunes of clients, some buffeted by COVID-19 and others buoyed.

Frey’s client base, which includes retirees with self-managed super funds (SMSFs), construction firms, and small manufacturers, has certainly experienced mixed fortunes.

“A lot of older clients rely on dividends from shares, which haven’t been coming through, while those in the building trade were doing OK until the second lockdown,” Frey says.

“Other clients, especially those with online businesses, have seen very little impact.”

Smith’s firm is currently helping a trucking company with $8 million in loans on equipment to work out how to repay the debt now bank deferrals are coming to an end, but it has no sure-fire cash flow.

“And, yet, we also have a business that installs barbecues with increasing turnover, small bars that are doing a brisk trade, healthy spending reported by an aquamarine retailer and a chef and a mental health practitioner who have invested in online are doing well,” she says.

“It’s one extreme to the other. We do wonder what will happen, though, when government support cuts out.”

In for the long haul

While the wellbeing of clients is obviously a priority in the pandemic, it is also important to check in on staff stress levels, Pickering says.

“I play tennis once a week and there’s no substitute for getting some fresh air and exercise.”

She has also rediscovered her love of horse riding, going out with colleagues and friends at weekends to visit clients’ farms and relieve stress.

While Adelaide has generally been relatively lucky, and she has only had one client, a pub, forced to close its doors during the lockdown, Conlon says she took a much-needed holiday in September.

“The last five months, moving the whole business, including desks, computers, books and records to home, and now back again, as well as the increased workload, meant I definitely needed some time away,” she says.

Meanwhile, McStay has resumed her daily workout at the gym – “my way of de-stressing”.

In another positive outcome, some practitioners report the pandemic forced them to upgrade their digital knowledge and capacity.

Smith’s firm, for example, has upgraded all technology in its boardroom and is running more online meetings with clients.

“The focus is now on data security and management for us and our clients, as well as mental health,” she says.

Five lessons from the pandemic

  • Pick up the phone and find out what the issues are for clients. “They want reassurance and a professional they can bounce ideas off,” Prue McStay says.

  • Have more engagement with clients to help them with financial guidance, leasing matters, or looking after their core business needs as they reshape out of COVID-19, Bernadette Smith advises.

  • Maintain a routine and stay in touch with colleagues. “I’m still meeting up with members of the Public Practice Committee online and tuning into podcasts and webinars,” Michelle Frey says.

  • Update your practice to digital. Cloud-based accounting means you always have access to the data you need, Karen Conlon notes.

  • Watch out for staff who are isolated at home and not maintaining a connection with colleagues, Pauline Pickering says. “There is no substitute for a coffee and a chat.”