Small business accountant is unexpected hero

By Kerry Agiasotis, Managing Director and Executive Vice President at Sage Asia Pacific

Would you consider your small business accountant an ‘essential worker’? It is a phrase we have heard again and again the past year in the context of medical professionals, grocery workers and law enforcement, however never in the same sentence as ‘accountant’.

For small businesses, that is exactly what they are – essential. While accountants may not be providing medical care or keeping our grocery shelves stocked, they have, in many cases, helped keep the doors to many Australian businesses open throughout the ups and downs of the past year.

While the Australian economy is beginning to recover. March data from the Australian Bureau of Statistics found almost 20 per cent of small businesses think they will struggle to meet their financial commitments over the next three months.

With almost a fifth of small businesses feeling uncertain about their immediate future, there’s all the more need for accountants to maintain their ‘essential’ status in the months to come.

From number-crunchers to trusted advisers

Accountants worked all hours to keep their clients up to date with the latest changes, as the world locked down and the government rolled out emergency stimulus packages.

Recent data from the Australian Bureau of Statistics found that three in five Australian businesses sought external advice, such as accounting services, to navigate the unchartered territory of the pandemic.

As the challenges facing businesses undoubtedly increased, the nature of the accountant’s role underwent profound change.

Many accountants admit they felt more like a counsellor at times while supporting their clients throughout this period. On a more positive note, one of our accountant partners recently noted her highlight was getting to know her clients personally as the pandemic prompted them to open up and have more meaningful conversations.

Fast forward twelve months, and those businesses lucky enough to have access to an accountant have come to realise that accountancy is not just limited to number crunching and financial reporting.

Instead, a small business accountant is a trusted advisers guiding business owners through make-or-break decisions around how best to manage cash flow, revenue streams and whether and how to pivot business models.

Technology the key to success 

Although every accountant has his or her own unique experiences from the past year. I’ve consistently heard one piece of feedback that nobody could have dealt with the unforeseen challenges without technology.

As with many industries, the wholesale adoption of new technologies by accountants throughout the pandemic launched many practices years into the future.

Automated workflows from bookkeeping to tax, dashboards, customised reporting, and data-driven insights allowed them to keep their heads above water while focusing on what mattered the most: the needs of their clients.

Accountants who had instant access to financial and operational data were able to provide the best counsel to their clients so they could make the right decisions in the ever-changing environment.

This trend is accelerating in 2021 and beyond. As cloud-based, automated practice solutions continue to enable firms to become more productive, freeing up time for accountants to focus on running their practice and supporting their customers’ needs with timely counsel.

A trusted partnership for the future

If I were to look for a silver lining in the past year, without a doubt, it would have to be how technology transformed the accountant-client relationship.

It seems ironic that software helped bring people closer together. However, by leveraging new technologies such as cloud-based and automated practice solutions, accountants could free up time to focus on well-needed client counsel. 

Despite the enormous adversity endured, businesses and accountants managed to weather the storm together, finding solutions to the seemingly impossible.

As we look towards the May budget, the reopening of borders, and life after the pandemic, businesses must continue to work even closer with their accountants to leverage new opportunities and mitigate risks that may arise.

By keeping your small business accountant close and recognising the value they provide as essential to your business, you will be well placed to capitalise on the strong economic growth that’s on the cards as we continue to bounce back from the pandemic.

Small Business Answers guide to accounting software can be found here.

Small business landscape for 2021

There’s no question the Covid19 pandemic has forever altered the small business landscape in Australia. Lockdowns nationally have accelerated the rise of pre-existing trends towards digitisation, cementing them as fully-formed patterns across different industries and sectors.

While the pandemic hasn’t been easy on the economy, there are many opportunities Australian businesses can leverage in this new terrain of 2021. Businesses need to understand how Covid19 has impacted the economy if they want to make the most of these opportunities.

2020 in hindsight

Before we look ahead, it’s important to understand exactly how Covid19 has impacted the Australian small business landscape. Federal government research has shown the pandemic has affected most businesses to some degree – Victoria the hardest hit due to the second lockdown, which began in August and didn’t begin to ease until late October.

In the early months of the pandemic, many businesses reported a stark downturn in demand for their goods and services. They also reported having to let staff go or decrease staff hours to remain financially viable. In contrast, recruitment numbers across the country looked more promising in later months. A peak unemployment rate of 7.5 per cent in July had only lowered to 6.9 per cent by October, despite most of the country opening up again to varying degrees.

While it’s true the pandemic in Australia certainly hasn’t blown out to the catastrophic proportions seen in some other countries, the economy will need time to recover. Businesses need to be aware of how Covid has reshaped the trajectory of 2021 to take advantage of all the new economic small business landscape has to offer.

What will the Australian economy look like in 2021?

Recovery will be the theme of the year for the Australian economy. While many businesses in states other than Victoria enjoyed the initial ‘bounce-back earlier last year following the end of lockdowns, Melbourne isn’t too far behind.

That said, businesses can’t afford to depend on an initial ‘bounce back’ to move them forward. Deloitte predicted recession-like conditions in Australia throughout 2021; however, it suggested the bounce back in household spending would occur faster than the recovery in business investment. The Reserve Bank believes the country may have escaped recession as early as September 2020 – with growth in other states outweighing the drag in Victoria – addressing the economy will be at the top of the federal government’s plan, either way. Previously-announced measures such as personal tax cuts and business investment incentives may go some way to reversing the pandemic’s economic effects.

Top emerging trends in 2021 your business needs to know about

Australian businesses can boost their recovery by staying on top of emerging industry trends. With the increasing migration of everyday business operations to the digital space thanks to the pandemic. There is a raft of ways businesses can stay ahead of the curve and take advantage of all the ‘new normal’ has to offer.

From hybrid working-from-home arrangements to the necessity of integrating AI into business operations, the future of business in Australia is exciting. However, businesses need to successfully implement these trends ahead of their rivals if they want a competitive advantage in the market.

Aussie broadband has put together a free ebook covering emerging business trends for 2021.

Small Business Answers have a number of guides to help you improve your digital presence.

Can I Work From Home

A recent US survey of over 3000 IT professionals found that even offering them a A$40,000 rise could not entice 64% of them back into the offices. It looks like the COVID WFH-itis (Work-from-Home-itis) is here to stay.

Now before you take sides – work from home or work from an office – the COVID pandemic and lockdowns over the past 12 months have proven that for many non-public facing staff, WHF-itis’ works. Conversely, employers have reasonable rights to expect a return to the office.

US lawyers are salivating over the possibility of massive class actions enshrining WFH as a significant part of the work-choice landscape. Changing employment laws on a state-by-state and whole of government basis will take years. It seems there is the determination to fight for WFH.

A national survey conducted by the Australian Fair Work Commission last year found that only about 5% of WFH workers want to return to the office on a full-time basis. And 35% want to return on a part-time basis only. That leaves 60% who want to maintain WFH. That is unlikely to change until COVID is no longer a threat.

 That reflects the Team Blind US Survey results – 64% want to remain WFH and expect a US$30,000 (A$40,000) rise to return to the office. Now, one can argue that the figure is rubbery, and you would be right.

It is more about the ‘principle’ after another US employer-sponsored survey asked if employees would be prepared to take a pay cut to continue to WFH. That incendiary, lead balloon survey assumed that money saved by not having to travel to work, eat take-out etc., should be shared with the boss.

There is a rapidly disappearing middle ground with each side having polarising views.

The Australian WRH-itis legal quandary

Like the US, each Australian State sets awards and work conditions. Federally there are safety nets dictated by Fair Work Commission.

Fair Work Australia (Coronavirus website here) has made it clear that because employment law varies from State to State, there is no one ruling and probably no value in testing each State’s law.

COVID lockdowns forced changes in work patterns and business survival never contemplated by the Fair Work Act, various awards, employers, and employees. Those changes include employees setting up home offices, buying and depreciating equipment, higher energy and internet expenses, making commitments (like moving to larger homes with office space), childcare arrangements and even taxation claims for home offices. These may be things that you cannot undo quickly or easily.

Union/Employee views

Unions say that WFH employees who can reasonably show no productivity loss have a solid case to renegotiate any employer’s expectation of working at the office. The key here is they were employed under one circumstance. Those circumstances changed. They continued to do a good job, and the expectation changed by virtue of the employer requesting WFH.

Unfortunately, few employees have proved metrics for WFH versus office productivity. Unions are quick to remind employees that the absence of any written warnings from employers about a loss of productivity strengthens the WFH position. You can be sure that productivity metrics will become part of future work at the office and WFH employment agreements.

Given the employee has done a good job, the employer may not want to lose their expertise or loyalty (hard things to replace). Fair Work states, ‘Employers should continue exploring alternative working arrangements in their workplace, particularly while social distancing rules apply, such as supporting different types of work from home arrangements where possible.”

The ideal outcome is not termination but negotiation for WFH flexibility. Perhaps flexible work hours (to avoid transport peaks), two-to-three days a week in the office and the rest at home. And if there is a change of duties (what you did before and now after return), the employer must negotiate fairly with you. They can’t cut your salary but should remunerate you if they ask for additional duties.

Employer views – Work From Home

Employers need some sympathy – if they went out of business, there would be no jobs. They reasonably expect that employees will be on tap at the office. After all, workplace culture – that Je ne sais quoi – is what makes their company different to anyone else. Leadership and relationships from top to bottom.

Fair Work states that the employer has a reasonable right to request a return to a ‘safe’ workplace if that was where you worked when you were employed. Those employed during the lockdown may have a legal loophole to continue WHF!

Please note that both Fair Work Australia and various medical authorities have said that until the vast bulk of Australian’s are immunised, and herd immunity prevails, employees have legitimate concerns about returning to the office or using public transport. They cannot be terminated on these grounds if they refuse to return to the office.

To be even fairer to the employer, they have long term commitments to real estate space, equipment, and other fixed overheads. Many are reassessing how the business will look in the future and downsizing to shared facilities etc. It may take a mind shift to go fully digital and get over the need for permanent office space.

And there is the issue of employer data security. The incidence of highly targeted email spear phishing, business payment scams, business email compromise, and data exfiltration from compromised employee computers has skyrocketed. All because work is being done remotely from largely unsecured computers.

Bottom line – if you refuse to return to the office except under certain conditions (like a legitimate fear for your health and safety in workspaces or catching COVID on public transport), your employer can terminate your services.

The Fair Work Commission has a Swinburn University paper ‘ key working from home trends emerging from COVID- 19’ here.

What is a COVID safe workplace?

A COVID-safe workplace means that the employer has to guarantee that protocols are in place to prevent the transmission of COVID to staff. Failure to do so and contract tracing evidence that COVID emanated from the workplace makes the employer liable for civil court action.

By the way – an employee cannot give up their right to a safer workplace. Even if you cut the boss some slack and don’t follow protocol, it does not lessen their liability. It is not negotiable.

At a minimum, in NSW, a workplace needs
  • A COVID safety plan (this covers most business types)
  • Marshals and temperature measurement on entry depending on the business size
  • Registration as a COVID safe business
  • COVID tracking sign-in and out (record keeping) for employees, suppliers, contractors, and clients
  • Physical distancing (1.5m rule and social distancing between desks)
  • If required, sneeze guard partitions
  • No hot desks or equipment without COVID safe cleaning in between uses
  • Cleaning and hygiene for any shared areas like lifts, kitchens, toilets, break rooms etc. several times a day
  • Alcohol-based sanitiser at multiple locations throughout the workplace, including entry and exit points
  • Disinfectant surface wipes to clean workstations, printers, phone handsets, keyboard, and mouse
  • Flexible work times to help avoid peak transport times
  • No gatherings in boardrooms unless they meet social distance rules – video meetings preferred
  • Contactless deliveries where possible
  • Increase natural ventilation by opening windows and doors, and increase mechanical ventilation by using air purifiers, maximising the intake of outside air and reducing or avoiding recirculation of air
  • A WFH backup plan and home quarantine plans just in case

Can my staff work from home?

We covered this because the Blind Teams survey was on the mainly desk-bound IT industry that uses collaboration to do their best work. It does not cover front line responders and public-facing staff who face a very different working landscape.

Our key message to both employees and employers is that talking about the issue is preferable to the alternative. In many respects, and particularly as neither party can sign their rights away, it all boils down to flexibility until COVID is no longer a threat. And hopefully, no other pandemics come our way.

See our guides on hiring staff and ending employment