Equity financing provides valuable opportunities for accountants
Peter Towers
Founder of ESS BIZTOOLS Pty Ltd | Certified Public Accountant | Business Advisor | Mentor and Coach
SMEs need accountants who have skill sets beyond the preparation of annual accounts and income tax returns.
This was the theme that the pioneers of ‘Diversification of Accounting Services’, FMRC (Financial Management Research Centre) established 45 years ago, when the centre’s Founder, Professor Geoff Meredith, convinced the Institute of Chartered Accountants and the Australian Society of Accountants (now the CPA) that Accountants needed to be offering additional services that would assist SMEs to survive and prosper.
In a period of high inflation, high interest rates and high business failures, the ‘Trusted Advisor’ should broaden the services delivered by proactively including services, which ESS BIZTOOLS describes as ‘VIRTUAL CFO SERVICES TO SMES’.
Bear in mind that this service is not just about expanding the frequency of lodging accounts and tax returns form annually to monthly. SMEs need far more than that if they are going to survive and grow in the current business environment, hence the term ‘Virtual CFO Services’. It is likened to the type of responsibilities a hired CFO in larger companies have, which also relate to thousands of SMEs. However, in most cases, SMEs have no dedicated Accounting Officer with the skills and experience that qualified Accountants have to solve these types of problems and provide explanations to the business owner/CEO.
This is the key issue that’s occurring every day for thousands of SMEs:
Do they have sufficient finance to fund their business operations in the current environment?
ESS BIZTOOLS, in collaboration with CPD for Accountants , have developed the ‘Small Business Equity Financing Course’. This course is designed to equip Accountants and Advisors to perform the advanced role beyond traditional accounting services of annual accounts and income tax return, to assist with areas such as…
Discussion and documentation of the ‘VISION’ that the SME operator/directors have for their business.
Coordinating the development of the ‘Business Plan’ that identifies the vision developed with the leadership team. This is important to ensure there is ‘ownership’ of the business plan by the leadership team who have the responsibility to implement this plan.
The ‘PLAN’ will identify the following:
Business Expansion Plan over the next few years:
From the completed business plan, the Predictive Accounting Reports can be prepared, which include budgets for each business operation, cash flow forecast and projected balance sheets.
Key Drivers as identified in the business plan:
Data flow: Business people need regular data on a wide range of items to assist in managing the business’ KPIs (daily – weekly – monthly) and business metrics (weekly – monthly).
Critical analysis: A key function for an Accountant providing a virtual CFO service is to critically analyse the business plan, predicted financial reports, cash flow forecast, projected balance sheets and data flow.
This is the key process that CFOs undertake in larger companies. They sit down and analyse the data and then report to the CEO and the leadership team on what the forward planning process is indicating.
Where are the potential problems?
What are the critical cash flow issues?
Will the business have sufficient cash flow to take advantage of an ‘outstanding opportunity’?
Does the business have enough cash reserves to absorb problems that the owner/directors have no control over – alternative sourcing of raw materials and products from overseas because of interruption by wars?
The critical examination of the cash flow forecast is extremely important. What circumstances could the business encounter which could cause a cash shortfall?
How could the shortfall be funded?
Shareholders contribution – is this feasible?
Additional borrowings – are there spare assets to be offered as security for a loan?
If a loan is going to be sought, what will be the cost? What are the potential conditions to be imposed by the lender?
What other funding opportunities are available? Government grant? External capital raising under Section 708 of the Corporations Act?
If your client is a ‘young company’ – potentially aged up to six years – you could consider the benefits of raising capital as an ‘EARLY-STAGE INNOVATION COMPANY’. The inducements offered by the Federal Government for investors to invest in a company that achieves the ‘Early Stage Innovation Company Status’.
If the company’s turnover is under $25M annually and the gross value of assets under $25M, have you considered the opportunities to raise capital as a ‘Crowd Sourced Funding Equity Raising’?
Have you considered raising capital from Venture Capitalists?
These are the type of questions that accountants offering services that relate to the challenges of managing an SME in 2024.
领英推荐
SME Equity Financing Package for Advisors
The ‘Small Business Equity Financing Course’ will assist accountants already offering, or considering offering a broader range of professional services, to familiarise the partners and accounting team members with knowledge of the very important capital raising opportunities for SMEs. In addition, enable your firm to offer an outstanding range of real accounting services that will assist your SME clients and prospects to survive and prosper in the current business environment.
These services will be welcomed by your accounting team because your firm will be offering interesting and challenging work assignments.
CLICK HERE to find out more about this course and to enrol.
If you would like more information about the services provided by ESS BIZTOOLS, visit www.essbiztools.com.au , where you can explore the product packages that are available.
Alternatively, click below to book a complimentary Zoom meeting with our Managing Director, Peter Towers.
Upcoming Webinars
ESS BIZTOOLS is presenting a series of information webinars, going through some of the key components of the products that will assist you to DELIVER Advisory Services to SMEs. Click on your preferred webinar below to register, free of charge.
ESS BIZTOOLS Olympic Sale Spectacular
Gold medal deals await, with ESS BIZTOOLS offering discounts on our subscription packages until 31 August.
Advisory Intro Package
$89.10 (including GST) 12 x monthly or upfront discounted price of $891 (including GST) – more information HERE
Business Advisory Services Starter Package
$178 (including GST) 12 x monthly or upfront discounted price of $1,782 (including GST) – more information HERE
Advanced? Package
$534.60 (including GST) 12 x monthly or upfront discounted price of $5,346 (including GST) – more information HERE
Financial Forecasting Package
$950.40 (including GST) 12 x monthly or upfront discounted price of $9,504 (including GST) – more information HERE
Want to know more?
Visit www.essbiztools.com.au .
If you would like to have a discussion about how this concept of virtual CFO services can be supplied by Australian accounting firms please ring our Managing Director, Peter Towers, on 07 4724 1118 and we will arrange a complimentary Zoom meeting to discuss your firm’s position and to give you our advice.
We believe that this is the blueprint for the delivery of an enhanced range of services by Australian Accounting and Bookkeeping firms to assist SME businesses to add value to their businesses and to assist accountants and bookkeepers not only to attract but to retain outstanding talent who want to be involved in the delivery of “real accounting services”.
Tell us what you think
We would like to ensure that our articles remain relevant, insightful and informative.? We value your input, so it would be appreciated if you could take a few minutes of your time to complete our survey.
Thank you for your assistance in making Accountants Minute better.
I help investors seeking an investment opportunity for high returns, through expert property sourcing and strategic acquisitions | Buyers Agent @ GainVestor | Accredited Buyer Rep | Negotiator | Advisor
3 个月Peter Towers, your article sheds light on such an important topic!