Accountants Forced to Fill the Breach
(22 June 2020 – Australia) The COVID-19 pandemic has forced the Australian government to rely heavily on the accounting profession like never before to disseminate financial support to corporates Australia-wide.
Accountants have been thrust into the role of key advisor to desperate small business owners and middle market CFOs without warning. The traditional busy period in the run-up to the end of financial year has been dwarfed by extended working hours since the end of Q1 2020, racing to comprehend and apply the broad range of state and federal government stimulus packages such as JobKeeper that were introduced in the wake of the coronavirus shutdown.
Accountants have been forced to expand their proficiency in tax law and absorb massive structural changes at a break neck pace never experienced before as the pandemic drags on, in particular in the state of Victoria which recorded a spike in community transmissions this week. A recent Gartner survey conducted at the end of March revealed that 51 percent of respondents were bracing for a revenue contraction of up to 30 percent in 2020 due to the COVID-19 pandemic while 28 percent of respondents believe the impact to their organisation’s revenue could be greater than 30 percent.
The accountant of the future will need to be a compliance expert who can grapple with fast-changing rules while providing broader advice to clients about their business, effectively wearing ‘many hats’ much like CFOs and corporate treasurers themselves forced to address digital and technology issues beyond their core role in many instances.
"Accountants have become an arm of government, like Centrelink for businesses. They are helping to distribute the cash payments, bound by detailed rules, that are keeping many businesses afloat” stated Jadeja Partners Accounting M&A specialist Magnus Yoshikawa.
"They prefer to be seen as a business that has grown on referrals to this business, and that referral business more often than not revolves around compliance. Some firms are making more money than they've ever made thanks to JobKeeper, while other firms have been reluctant to charge too much to distressed clients. It's all well and good to understand your client's books, but you also have to be able to understand what drives your client and be able to guide them through the challenges of running a business. Good accountants often became a confidant to their clients" Mr Yoshikawa added.
Advice for CFOs by Bradley Francis FCPA, CFO, Edith Cowan University:
- Actively monitor cash flows
- Mergers and acquisitions – look for the diamonds
- Communicate directly, consistently and regularly with teams, stakeholders and mentors
- Consider different scenarios that the government may use to improve the economy
- Be prepared to accept and learn from mistakes and make the necessary changes quickly to correct them
- Keep an eye on emerging and unexpected risks as businesses adapt quickly
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