By Craig Michie

In Part one of this two-part blog, we take a look at the important role bookkeepers played for their SME clients in 2020.

Dealing with small business clients as JobKeeper ends is just one of many demanding tasks for bookkeepers in 2021, especially as they are coming off a tremendously challenging 2020.

We spoke to Matthew Addison, the executive director of the Institute of Certified Bookkeepers, about how bookkeepers work with small businesses, side by side on their challenges.

ICB, a professional association with more than 5000 members, provides solutions, assistance and how-to guides for bookkeepers and the businesses they work with. Their members help clients use their business system software and many bookkeepers also assist, oversee or process their clients’ payroll matters.

Craig: Matthew, tell us about 2020 from the bookkeeper’s perspective – your members were really at the coalface, weren’t they?

Matthew: Governments, and the advisors and businesses adapting to government policy, really went on a journey – the pandemic and shutdown happened fast, with the government quickly looking to help and business owners asking: “how do I get help?”.

Business owners expected instant answers and assistance. Bookkeepers had to quickly comprehend government announcements, keep businesses informed and then manage the reality of how each business would be impacted by the government initiatives, regulations and restrictions.

Bookkeepers were at the forefront of explaining to businesses what the government policies meant, what they were eligible for and how to properly document eligibility.

What our members were doing more of was cashflow boost prep and JobKeeper prep. This is paperwork they might normally do, but it had to be done much quicker, and for JobKeeper there was a higher than usual level of payroll management required.

As cash became tighter, bookkeepers and their clients gave more consideration to cash flow issues and more day-to-day cash flow management was required. This could involve bookkeepers talking to the businesses’ own customers to get them to pay invoices more promptly or talking to suppliers to negotiate longer payment terms.

It was not uncommon in 2020 for bookkeepers to lean on banks for financial support on behalf of their clients – sometimes with success, sometimes not. This was a very time-consuming but not always productive use of our members’ time.

Craig: How did bookkeepers influence government policy to help with pandemic recovery?

Matthew: In ICB’s collaborations with government and ATO we helped co-design and implement the business solutions required for JobKeeper, Cash Flow Boost, State Government Grants and JobMaker.

Building on the foundation of years of development and implementation of Single Touch Payroll, JobKeeper was designed and implemented within weeks (a project of this size would normally be years to achieve the same result).

Bookkeepers had to help their clients understand the eligibility requirements, how to register and how to adjust payroll systems to correctly submit information to Government for the JobKeeper and Cash Flow Boost programs.

Each business and every employee within each business had to be evaluated and their pay records adjusted to account for JobKeeper.

State Government Grants emerged, each with different requirements and processes. Awareness of each initiative was a challenge, and it was very time-consuming for our members dealing with evaluation of business eligibility and then the application process.

Craig: We’ve seen a lot about how the pandemic year impacted the mental health of business owners, it sounds like there was also a toll on bookkeepers?

Matthew: 2020 was definitely hard for our members’ mental health – the hours worked, and the stress levels, were immense.

Bookkeepers are really passionate about helping their owners, and they tend to be very emotionally connected to the success of their clients.

Some bookkeepers were working 7 days a week for weeks on end, to help businesses put the records in place to prove eligibility for the cashflow boost, JobKeeper and so on.

They helped their small business clients while often their own businesses were suffering (for example, some did the work recognising they would not be paid for a significant period of time).

At ICB we saw our role in 2020 as to interpret what the government and regulators were doing and give our members templates and other tools for practical use. It was also crucial for us to remind them to take a step back for their own wellbeing, to take a breath and look after their own mental health. We organised weekly (sometimes twice weekly) technical webinars, as well as a weekly “touch base” webinar for members. This was a very successful nine-month campaign.

Craig: ScotPac SME Growth Index research shows that small businesses relied more than ever on their trusted advisors to get them through the pandemic year, with those relying more on advisors happy with the outcomes they achieved. Is this a trend ICB has noted?

There was value in turning to trusted advisors in the pandemic year. Advisors like bookkeepers know how the system works, so for SMEs to use an advisor familiar with systems and how things work is definitely more professional and more likely to lead to success.

However, it really depends on what shape the businesses were in. For businesses who were shut down and had no revenue it was hard to engage advisors when there was such uncertainty about their ability to compensate them for the advice.

Some businesses did not understand nor appreciate the complexity of the government initiatives, sometimes headline announcements made it sound so easy but in reality our members were dealing with very complex rules and regulations.

From our observations, most businesses who work in a healthy positive relationship with their advisors were able to lean on their advisors and as a result were able to manage business during the very “different” year that 2020 was.

Where advisors were able to comprehend and implement COVID response programs competently and professionally, businesses could secure increased certainty about their own circumstances.