As we approach the end of another financial year in Australia, I trust you are on top of what you wanted to get done before 15 May and 30 June tick over. The Coronavirus crisis has added to the workload and I know many firms have found this challenging.
For accounting firms in Australia there is a well established routine of things you do with clients in the lead up to 15 May and the end of the financial year. In Australia 15 May is a significant tax deadline and in 2021 I am hearing some firms report they are further behind than normal in meeting the lodgment requirements. If that’s you, time to get your skates on!
This is not formal advice but rather a list of some things I hear firms talking about dealing with:
- Review tax lodgement lists to make sure you don’t have anyone listed who should not be
- Chase clients who have been slow to provide information required for compliance work completion
- Review extension arrangements for clients
- Write off bad debts
- Look at management fees and service agreements
- Trust distribution resolutions
- Directors fees and bonuses
- Division 7A loans and agreements
- Superannuation contributions
- The usual things you may want to claim a deduction for this year rather than next
- Asset purchases and immediate write off in FY21 tax year
WARNING – some firms have clients reporting long lead times in having equipment delivered and installed to the extent that it won’t happen by 30 June. If the timing of the claim is important to your client you might want to make sure they have double checked that delivery and installation will occur by then.
- Any other tax planning matters – for most firms April through June is the time for planning meetings with clients
- Budgets and plans in place for FY22
Some firms are so focused on helping their clients they forget to do these for themselves. Don’t let that be you! This list is not definitive but has perhaps prompted you to think of a few more things.
I want to give special mention to budgets and plans for FY22. The impact of the pandemic on some of your clients may have been significant and you will have been helping them build budgets / forecasts and plans. It strikes me this is a high value job that most of your business clients need. If you haven’t been able to get to this with all your clients yet I’d hope you could get to it soon.
One thing that some firms start in June is communicating with clients about the timing of their annual compliance work. I still see far too often firms who take a very “free market” approach to completing client work. By that I mean they let the clients dictate it. I think this is a bad idea! At least for your business clients.
The approach I like is where you look at your business clients and work on scheduling them. This will be done based on experience with the client and what their needs are and also by reference to availability of resources. In my experience this can make a big difference to how efficiently and effectively the client work is completed.
Ideally, you want a small number of jobs on the go at any one time for each of your team members and that can only be achieved through scheduling. The smaller number of jobs on the go ends up as a win for the firm and the client. The client gets a quicker turnaround time from when information provided to finished job. The firm gets less pick up and put down, fewer errors and happier team members.
Associated with the job planning will be the task in many firms of getting ready to rollover jobs, matters or other things in your practice management system or whatever you use to track jobs. I’d like to think this is a largely mechanical process but I have heard of firms getting into difficulties with unintended consequences so you want a safe set of hands overseeing this. Plus get well supported by the software vendor as needed to ensure all goes smoothly.
For firms with agreed fee annual packages for clients the end of the year is also typically when they turn their mind to agreeing on fees and scope for the next year. In many cases this is handled very easily with the help of software such as Practice Ignition or Go Proposal and typically also incorporate an automated monthly direct debit to a credit card or bank account for the client to pay. If you don’t do this, now could be a great time to start with at least some of your clients.
One last tip. If you have not done so already consider a meeting of your key people to quickly go through a list of things needed to be done by 15 May and 30 June so nothing is missed. Having worked in five firms myself and been through a lot of 15 Mays and EOFYs I know how easy it can be to miss something. A short check in now might stop regrets on 1 July because something was forgotten.