Factoring and SMEs

Tax debts send twice as many small firms to wall

THE number of small businesses bankrupted by the Tax Office has more than doubled.

Financial counsellors say the Tax Office is heavy-handed in bankrupting small businesses and often does not give them sufficient opportunity to settle their tax debts.

Your say: Do you think the ATO is being unneccarily tough on small business?

Corporate undertakers are coming out of hibernation and gearing up...

A recent article suggested that corporate undertakers are coming out from hibernation and gearing up for an exciting 12 months.

Early disclosure of financial problems is the key to recovery. However, when SME owners start feeling financial distress, many choose to suffer in silence.

A typical SME does not have formal director meetings or a team of legal and accounting advisors giving regular advice. There is no convenient sounding board to formulate a logical plan for recovery. Instead, the distressed SME owner will wrestle privately with his problems over sleepless nights. Adding to the anxiety is usually a fear of retribution from bankers and other creditors if the truth is known.

Small business owners must be prepared to acknowledge their financial problems much earlier and to seek professional guidance before their situation becomes terminal. The corporate doctors often lament that many distressed SMEs would have been able to make a fair recovery had their owners not pretended that "she’ll be right mate".

The message for all SME owners is that calling for a doctor on the day of the funeral is leaving things just a little too late.

Not just your average accountant...

Passion, aggression, excitement – these are not words usually associated with accountants, but the latest squabble within the profession has created some emotional debate between the two main industry bodies, the Chartered Accountants (CAs) and the Certified Practising Accountants (CPAs).

Each body is having a turf war over whose brand should dominate the accounting industry. What significance does this have for the SME market?

We suspect that most SME owners have little interest in the difference between a CA or a CPA. Business owners already have a generally favourable opinion of the generic brand name of accountant. By choosing to bring what should be an internal debate into the public arena, the profession is only creating a mist of confusion and uncertainty over the goodwill which the accountant brand has enjoyed for decades.

The CAs and CPAs have almost merged several times in the past but have never quite made it to the altar. With many accountants already holding membership to both industry bodies it does seem strange (and unnecessary) that the profession has decided to go public with its ideological musings and put at risk the good image of accountants everywhere.

Perhaps the wedding plans for the profession should be quickly moved forward!