This article first appeared on myob.com.au
If you handle BAS submissions for small business clients, the coronavirus outbreak and resulting social distancing measures couldn’t have come at a worse time. But in some ways, getting better at BAS is now more important than ever.
Dealing with BAS deadlines is hard enough for many practices, especially with December and March quarterly submissions pretty much arriving back-to-back.
Well it’s time to strap yourself in and start preparing now for the March 2020 BAS season, as ‘hectic’ is about to be taken to a whole new level with COVID-19 thrown into the mix, on top of FBT, tax planning and finishing off 2019 tax returns.
The following information is critical for small practice owners or solo practitioners who already struggle to find time to balance work-life balance while remaining profitable and geared for growth.
The coronavirus pandemic is going to cause pain for clients and your business, but if you grasp the opportunities it presents and quickly get up to speed with what stimulus is available for businesses, you’ll come out the other side with better clients, better processes and, with any luck, more profit potential than before.
If that sounds like you, read on.
- Communication is key, and your clients will be looking to you for advice on how to receive their maximum stimulus entitlements
- Get your BAS processes up to speed and combine with best-of-breed tech tools to create efficiencies and lighten your workload
- Take steps to make sure your BAS services are profitable by turning efficiency into value-added advisory
Here are my tips to help you survive the coming BAS period and the unknown impact the coronavirus is likely to have on your practice and your clients’ businesses.
Priority #1: Stay informed, communicate early and often
Your clients want to hear from you now and it’s also an opportune time to also mention the upcoming March BAS.
First and foremost, let them know you are there for them, but the way that you are available and will be working in the coming days, weeks and months may change (for example, working from home, phone and video meetings).
Secondly, let them know that preparation of the March BAS will most likely be a more complex process as you will also need to ascertain eligibility to the government’s recently announced COVID-19 stimulus package, which will impact both the turnaround time and your fee.
IMPORTANT: Given the package is changing and more measures are being added day by day, it’s impossible for you to hypothesise the benefits or to advise with any great certainly the most appropriate strategies for them at this early stage.
You will want to let clients know that you’ll be in touch when more concrete information is available together with your BAS/coronavirus service stimulus information, and fees.
Also let clients who may self-prepare their BAS know they may require your assistance to prepare their March and June BAS statements to ensure they maximise the benefits of the stimulus package and what your current availability is to do so.
Finally, advise your clients that you are dedicating your resources and expertise at this present time to assisting clients’ with immediate needs.
The services, in order to help keep some businesses afloat, would include: how to pivot business operations quickly to meet a different market need or delivery method, cash flow advice, assessing business viability and identification of milestones that may require more drastic action, bank finance or ATO payment plan applications (and perhaps assistance with HR management).
Make it very clear that the quicker your clients reach out to you, the more likely it is that they’ll survive and that is your number one priority.
Once you’ve addressed the more pressing issues, it’s time to turn your attention to your actual BAS process to ensure it’s one of the most efficient and profitable BAS periods ever, as it’s likely it will also be your most challenging.
There will potentially be more work, but if you have staff they may be working remotely and your own practice’s finances could be squeezed.
Priority #2: Create efficiencies in BAS preparation processes
There are a number of things you can do to improve the efficiency of your BAS process as, chances are, your cash flow and theirs will need to be bolstered by the stimulus measures that depend on lodgement of the March BAS.
9 steps to finding efficiencies in your BAS preparation process:
- Prepare a list of all the clients you will be preparing BAS’s for and if applicable pre-allocate to staff (if you have them)
- Send a friendly reminder email, SMS or newsletter within the first couple of days of the end of the quarter including a date that you would like your clients to have their quarter closed off, additional information provided to you and a reminder of the Superannuation Guarantee payment deadline
- Send another reminder to clients who have not brought their work in by the requested date
- Encourage clients to embrace online accounting software (excel spreadsheets and shoeboxes have seen their days)
- Ask clients to use bank feeds and set up as many rules as possible (you can help with this)
- Recommend your clients to use MYOB Capture App (this will save you so much time having to go back and ask the details of a transaction and, let’s face it, keeping paper receipts has had its day)
- Require clients to electronically sign and return back to you for lodging (I’ve had clients send back their ELD and pay my invoice literally in minutes of the BAS being emailed)
- Set a policy of payment prior to lodgement as this will assist with cash flow and save admin time chasing debtors
Start this work now by getting your clients file reconciled and queries asked up until 28 February (this could be a task for any staff members working remotely where they can maintain a good level of productivity with minimal direction)
Priority #3 : Seek profitability in BAS preparation
Are you regularly reviewing what it’s really costing your business to provide BAS services to your clients?
If you’re like so many practices, chances are you’re undercharging for the work you are doing.
That’s exactly what one of my coaching clients was doing, so over the last 12 months they’ve been spending a small amount of time at the end of the job to review and, where applicable, revise fees (either for that BAS or for future BAS submissions). They’ve also determined a minimum fee for their BAS service which takes the guesswork, time and emotion when billing.
When we re-ran the numbers for the 12 months, the overall BAS statements prepared reduced by only three (there were a few client casualties, but they were very quickly replaced by new clients) and revenue jumped by just under $25,000. That’s a lot of money for a small practice owner to be giving away.
8 steps for maintaining profitability in your BAS service:
- Take note of the time being spent preparing the BAS for each client (separate the time between normal BAS processing and consideration of the stimulus measures which may also involve a more comprehensive tax plan)
- Take note if the scope of the work has changed since you started working with each client (this will surprise you especially if you have staff doing the work)
- Take note of how efficient your clients file is eg. What is their efficiency % on your partner dashboard? If an excessive number of transactions are requiring re-allocation or are being manually coded. Spend a small amount of time creating rules or correcting rules
- Revise fee if appropriate and decide on whether that will apply to this BAS or at a later start date (if you are not sure whether to increase the fee, repeat the process again for the June BAS)
- Advise client of any changes, being as open about your rationale as possible
- Have a standardised BAS checklist and procedure to ensure consistency and that nothing gets missed (this incidentally, is the most common reason a client moves on and let’s not mention that rework costs your practice money)
- Be sure you’re familiar with all of the features of the stimulus package once announced and have a streamlined list of all of the options that can be applied or deemed not applicable for each client
- Determine what additional packages you will offer and the various price points
I hope these tips assist you in getting organised, managing your stress, and remaining financially rewarded for your efforts as you prepare your March BAS submissions and continue to provide valuable services to clients in these unprecedented times.
I also hope that the assistance you provide your clients will be appreciated, as your ongoing profitability goes hand-in-hand with their own.