More businesses rely on accountants to salvage their future
The dilemmas clients face because of the COVID-19 lockdown are not going away any time soon. Here is how two prominent CPAs are dealing with the challenges.
Jacqueline Blondell | June 2020
Practitioners have been confronted with unprecedented challenges given the pace and volume of work following the Covid-19 lockdown and, hard on its heels, the Australian Government’s JobKeeper stimulus packages and commercial landlords rent relief program.
Two public practitioners, Gavin Swan FCPA and Andrew Pearce FCPA, recently joined a CPA Australia podcast to discuss ways practitioners can better manage their workloads and help clients cope with business continuity issues.
In the podcast, they offer advice on issues such as workflow management, client cash flow issues, and communicating with staff. Both agree that regular client communication – by email and phone – is critical during this difficult time.
Client business continuity
As soon as the lockdown was implemented, Swan, principal of central New South Wales coast-based firm, Absolute Accounting Services, and his team hit the phones.
“It looked like a pretty busy switchboard here for a little while, and the clients were very much appreciative of the chats,” Swan says.
The lockdown also resulted in a comprehensive review and segmentation of the firm’s client base.
“Not every client is the same, so we’ve created some bespoke COVID-19 packages,” he explains.
The firm has divided clients into three groups, depending on the level of assistance required, to apply and manage the JobKeeper process and deal with other issues, requests, and billing enquiries.
Meanwhile, Pearce, business adviser and executive director at Collins SBA in Hobart, Tasmania, has been working with hospitality and tourism bodies to help local clients severely impacted by the lockdown.
“One of the things we started with was a bespoke package doing business continuity plans for clients,” he says.
Essentially, the firm offered 45-minute Zoom sessions that covered the stimulus packages available at the state and federal level. He says the sessions created “accountability for the owners and their executive [team] if they have one”.
Additionally, the firm offered an Excel-built cash flow management tool that can draw quick scenarios of how a drop in revenue can affect the business.
“This allowed clients to make decisions they needed for the number of grants they were applying for,” Pearce adds.
Ongoing communication with staff working remotely has become a key to successfully maintaining a firm’s operations during such a hectic period.
Swan and Pearce agree that technology has greatly assisted with keeping everything on track. Instead of the daily staff huddle, Pearce’s firm has been using Microsoft Teams for internal meetings and the software’s “Chat” function to deal with particularly thorny legislative detail.
“We’ve added some channels in [Teams] around Covid-19 and business continuity, so we can chat over the curly questions we have with interpreting the legislation,” he says.
Swan emphasises the importance of retaining staff alignment when team members are working remotely.
“You cannot put a price on that,” he insists. “We spend a lot of time sifting through the detail of the COVID-19 [relief] packages, and you cannot spend [additional] time explaining [to a client] why one team member told one client something completely different. So, regardless of which [accountant] clients speak to, there is alignment, and everyone is on the same page.”
Client billing and firm cash flow
It’s not only a precarious time for small businesses’ cash flow – but practices also have to keep an eagle eye on the issue, as cash-strapped clients require more assistance and backup to understand and apply for stimulus packages.
Swan says firms are “riding the waves” of economic upheaval, along with their clients. Therefore, it’s key to have a good mutual understanding of the billing arrangement.
“To ensure goodwill with some clients who are just too small to invoice straight up, we agreed to add to their invoice at year-end or later. Therefore, it's important to keep a record of your work, especially for micro clients,” he notes.
As mentioned, Swan’s firm can put forward a variety of COVID-19 packages for its clients. He says there has been good initial take-up, providing a boost to the firm’s cash flow. However, he predicts this will dry up in the next few months.
“There’s an understanding and an agreement that [clients] will probably not be paying us for two or three months, by which time we hope they will be back on their feet and certainly that some of the stimulus measures will do what they are intended to,” he declares.
Pearce notes that some of his larger clients, also suffering from the downturn and with lots of employees, have had to make drastic decisions.
“They’ve come to us and asked for support in reducing the scope of our services to them or for a deferral on some payments,” he says. “We’ve tried to be as accommodating as we can [because] at the end of the day we want them to be sustainable and long-term clients.”
Access this and many other CPA Australia podcasts.