Why niche markets can be big business for accountants

Finding a niche is an excellent way for accountants to unlock new, profitable opportunities. So it’s no surprise to hear that more and more practices are identifying and focusing on niche markets as a way of optimizing budgets and boosting internal efficiency.

What do we mean by a niche market?

Many firms will say ‘I specialize in SME clients’ without realizing that most other practices will say the same thing. As such, their clients have little to differentiate them from their competitors. Defining yourself as a niche firm, servicing a niche market, is a way to help you stand out from the crowd. While brand image, good marketing and so on can help you celebrate your unique selling points, perhaps one of the most effective ways is to focus on one or more niche markets, a move that brings additional advantages too.

What are the advantages of serving niche markets?

There are two fundamental advantages to serving niche markets and specializing as an accountant – optimized marketing and internal efficiency. From a marketing perspective, you can become one of the ‘go-to’ firms for clients in your sector and focus your marketing budget accordingly. This will be more effective than a general ‘scatter-gun’ approach and should bring greater success. Networking can be more targeted too. If the niche sector has conventions or meetings, you can attend these and expand your client base. Marketing via publications (such as the magazines or articles your niche uses) can also be quite focused, to make the public aware of your firm and specialization.

The second advantage is in the area of internal efficiency and will help improve profitability considerably. If you are processing accounts and tax returns for similar clients, you can use efficient processes. This should be considered carefully in your staff recruitment, operational requirements and software choices, ideally prior to marketing yourself in this niche in the first place. You should also consider informing clients in the sector of the way you want them to keep their records (to make both your and their job easier) and incorporate this into your engagement terms with them.

Are there other considerations?

If you focus on a transactional specialization (such as corporate finance or strategic tax advice – as opposed to providing compliance advice), your income may not be recurring. So you may need a good network of client providers who recognize your expertise so they provide clients referrals and ensure you have a continuing supply of new business.

Are there any disadvantages to tapping into a niche market as an accountant?

There may be, particularly with changes to tax and accounting requirements. Concentrating all your efforts in one area may also leave you vulnerable to economic change – for example, if a particular sector is hit by a recession. One particular specialization years ago (dealing with small subcontract builders) was affected quite significantly by a change in tax laws. So your niche may lead you to need to swiftly rethink your firm strategy.

How do I turn my practice into a niche firm?

Consider areas where you are technically competent or have an interest. We also recommend that you plan carefully in terms of resource and put together a strategic plan for expanding your firm. We have advised firms in this area in the past (from sole practitioners upwards) in order to ensure they plan for their futures. So consider, will you need to recruit additional staff? How senior do they need to be? Are they available or close to you?


Article published on: https://www.sage.com

Who’s (Legally) Allowed to File a Tax Return?

Tax isn’t the easiest of subjects to navigate. Besides the long list of legalese to master, there’s the fact that tax legislation evolves year on year. What was applicable on your tax return 2 or 3 years ago, isn’t necessarily valid on your next, and what’s right this year, may change next season.

It’s unsurprising then, that when faced with the daunting task of filing their annual tax return, many people turn to a friend, colleague or trusted broker to help them out, in the hope that they’re more proficient. And while it may be safe to do so for advice on, say, an alternative medical aid option or a good restaurant for a good dinner, when it comes to tax, this can have serious legal consequences (for both parties) if things go wrong.

In July 2013 SARS took a firm stance on who was legally allowed to file tax returns on behalf of others and introduced stricter requirements for tax practitioner registration. Effectively this means that if anyone other than a Registered Tax Practitioner is filing your tax return on your behalf, the act is deemed illegal.

Requirements to be a Registered Tax Practitioner

Practitioners need to first be registered with a SARS approved controlling body before applying for a SARS practitioner number.

The controlling bodies confirm that the practitioner has the necessary skills and qualifications to file other people’s taxes correctly. They also ensure the practitioner participates in continuous professional development programmes in order to keep up to date with tax legislation.

SARS approved controlling bodies include:

  • A Law Society
  • Chartered Institute of Management Accountants (CIMA)
  • Chartered Secretaries Southern Africa (CSSA)
  • General Council of the Bar of South Africa
  • Independent Regulatory Board for Auditors (IRBA)
  • Institute of Accounting and Commerce (IAC)
  • SA Institute of Chartered Accountants (SAICA)
  • SA Institute of Professional Accountants (SAIPA)
  • SA Institute of Tax Practitioners (SAIT)
  • The Association of Chartered Certified Accountants (ACCA)
  • Association of Accounting Technicians Southern Africa (AAT(SA))

If they’re registered correctly, they’ll have both a membership number with a controlling body and a SARS practitioner number. You can verify that your Tax Practitioner is registered with SARS here. All you need is their Tax Practitioner number (PR-XXXXXXX) and SARS will instantly confirm their registration status.

Why Use a Registered Tax Practitioner to File Your Tax Return?

  • It’s a legal requirement to do so!
  • A Registered Tax Practitioner should be properly qualified to complete your tax return and therefore claim all deductions applicable to you. Leaving out some expenses or claiming incorrectly, can cost you dearly in the long run.
  • A Registered Tax Practitioner’s behaviour will be governed by their controlling body’s code of ethics and conduct. There’ve been cases where “fly by night” practitioners guarantee you a refund (and may even base their fee on a percentage of your refund) but they achieve this by submitting fraudulent claims. Avoid these types of practitioners at all costs. If you’re suspicious of their actions, rather check their registration status with SARS.
    (Note: No-one, not even a Registered Tax Practitioner, should make guarantees that you will absolutely receive a refund. Refunds are only applicable if you’ve overpaid on tax, once all your available and permitted deductions have been calculated. Everyone’s tax situation is different and a refund can’t be 100% assured for each and every submission.)
  • SARS allows you to report unprofessional conduct of a Registered Tax Practitioner, which in turn will lodge a formal complaint with the relevant controlling body for investigation.
  • If you don’t use a Registered Tax Practitioner to submit your tax return – besides breaking the law – you’ll have no recourse whatsoever if that person behaves negligently or unethically!
  • If you have an issue with your tax assessment and you need to make contact with SARS, your Tax Practitioner can make the process far more efficient (and less painful!) by making an appointment directly with a SARS consultant on your behalf. If you don’t use a Registered Tax Practitioner, you’ll be on your own in the long queues at SARS when it comes to resolving your issue.

Article originally published in https://www.taxtim.com/

How mid-tier accounting firms are driving economic growth

In the business environment, there appears to be a widely held belief that value resides at either end of the spectrum: in the ‘Big Four’ networks offering scale and clout, or in the boutique firms that focus on a specific niche. As for the middle – well, nothing much happens there, right?

Wrong, insists Anton Colella, who was recently appointed Global CEO of Moore Stephens. In fact, with a 33 000-strong staff complement, his new home proves his point: “Moore Stephens may not be the largest network in the world, but we aim to be one of the most respected. With a growing reputation for integrity, trust and moral courage – we want to do doing things that are not just good for business, but which are good for society, too,” he says.

Those aren’t simply stirring words. Because of its size, Moore Stephens – and firms of a similar size – are able to work more closely with their clients, Colella points out. This model is of particular benefit to entrepreneurs, who often find that their businesses fail not because of a lack of demand or inferior quality products or services, but because their owners are more focused on the technical skills required by their chosen field than the general business competencies which ultimately keep a business afloat. Choosing to partner with a mid-tier firm means that entrepreneurs enjoy more access to that firm’s leadership than they would at a larger practice, and this translates into more effective business support. “A mid-tier firm will walk with you every step way on your journey to success. We’re strong on relationships; we invest in them. And this gives rise to an intimacy that provides a fertile platform for entrepreneurs to grow,” Colella maintains. This is borne out by the experience of Moore Stephens partners who have worked at larger firms. They note that, free of the additional administrative requirements of larger firms, they have far more time to be hands-on with their clients.

It is, perhaps, this proximity to entrepreneurs – and the cross-pollination of ideas and insights that results – that sees many CAs leaving the profession to become business owners themselves. This is a growing trend in Colella’s home country of Scotland but, he says, it has significance for the South African business landscape, too. “It’s no secret that the country’s economic growth relies strongly on the success of its start-ups. Entrepreneurs have the potential to make a major contribution to fiscal recovery,” Colella comments. This is where accountants have a role to play. Given their acumen and understanding of business processes, they often enjoy an advantage when it comes to establishing ventures that go onto thrive.

Not that every accountant who completed their articles at a mid-tier firm will go on to create a start-up, of course. Far from it: Colella reports that mid-tier firms produce more CAs than their larger counterparts, thanks usually to their efforts and investment in training, articles and mentorship.

“Obviously, there is place for firms of all sizes in our business environment; each has its unique strengths and can offer something different to the client. However, we believe it is time mid-tier firms took ownership of their special contribution to the growth, and health, of the economy,” Colella concludes.


Article courtesy of: https://accountingweekly.com

Betty Bookkeeper answers your questions on who can verify financial statements

Good day,

I’m registered Accountant with ICBA, my designation is Certified Financial Accountant.

I’m running my own practicing firm.

One of my client is looking for funding from funding institutions and he has been requested to submit an auditors letter confirming his  monthly drawings and income. Do I qualify to verify his bank statements and financial statements and write him this letter.

For your information- this client falls under small businesses, he cannot afford to hire a qualified auditor to audit his financials and compile an audit report for him.

Your assistance in this regard is highly appreciated.


Good Day Sam,

If your client falls into the SME framework with a PIS score below 350 (refer new Companies Act of 2008), then any acclaimed accounting officer may issue such a letter for him, as from a legal perspective he is not obliged to then appoint an auditing firm to perform these duties on his behalf.  You are more than qualified to issue this letter to him, obviously after reviewing his financial affairs to the extent that you feel comfortable to put your approval and signature on such a letter.


Don’t forget that I’m here to answer your questions about the ICBA, or just queries about your accounting at work. All you have to do is email me with a copy of your ICBA membership certificate. Not yet a member? Send in your application form!

CIPC Compliance Notice: 10% Penalty for late annual financial statements

Professionals need to take note of the CIPC MEDIA RELEASE 2 of 2018 – 31 May 2018.

CIPC has won a High Court order empowering them to penalise companies that fail to prepare annual financial statements within 6 months of year end. The penalty is 10% of annual revenue.

CIPC v Citiconnect 9503/18 confirmed CIPCs authority to issue administrative penalties for general non-compliance to the Companies Act, 2008. In addition, CIPC now requires companies to institute criminal and legal action against directors that caused financial statements to be misleading or falsify accounting records (CIPC v Steinhoff).

Due to the severity of the penalties involved and the potential wide scale non-compliance in the SME sector SA Accounting Academy has arranged an urgent webinar with CIPCs Corporate Disclosure Regulation and Compliance Unit.

Book your seat now to ensure you stay compliant and avoid penalties.

Date:              10 July 2018
Time:              09h00 – 11h00
Venue:            Webinar
Investment:    R399
CPD hours:    2

This webinar will provide clarity on:

  • Compliance provisions of the Companies Act, no. 71 of 2008.
  • Will the penalty (10% of Revenue) apply to all companies with late financial statements?
  • What to do if you receive a Compliance Notice from CIPC.

Xero threatens to leave Sage and Quickbooks in the dust

The recent growth of Xero in the UK points to a real sea change where cloud accounting is concerned, says outsourced accounting, operational and corporate services company Steppingstone in a blog.

It says while QuickBooks might have the upper hand in the US with 2.2 million subscribers, Xero continues to make inroads in a number of other countries worldwide. It has now positioned itself as the number one cloud accounting solution in the United Kingdom, Australia, and New Zealand, while enjoying steady growth in North America, South East Asia, and South Africa.

“Users and accountants alike are opting to implement and support it over its rivals, with its only real competitor appearing to be QuickBooks Online. Sage, it seems, has been left to play catch up with its delayed decision to switch focus to the cloud.

“In short, it’s our opinion that Xero threatens to leave both in the dust with its impressive suite of features, robust security, and a tiered pricing option tailored towards small and growing businesses.”

Steppingstone has taken a look at the features and the numbers behind the three leading cloud accounting platforms comparing the following features:

  • Invoicing
    Expense Tracking
    Online Banking Reconciliation
    Chart of Accounts
    Contact Management
    Multi-currency Support
    Data Import / Export
    Access Control
    Depreciation Tracking
    Document Approvals

The results are published here.


Article originally published on: https://accountingweekly.com/

Big Four Audit Firms said too be powerful

MPs are calling for an urgent review into the competition review into the statutory audit market, citing concerns over the lack of competitive tenders, dominance of the Big Four audit firms and an absence of independent scrutiny following the collapse of Carillion, reports Sara White, the Editor of Accountancy Daily

MPs on the joint BEIS/Work and Pensions Committee have slated the Big Four, and are calling on government to refer the statutory audit market to the Competition and Markets Authority, which would be the second time the largest UK auditors have faced a major competition probe since the crash in 2008.

The terms of reference of the new review should explicitly consider breaking up the Big Four into more audit firms, as well as looking at the effect of splitting off audit arms from the parts of firm that are providing non-audit services such as tax compliance, accounting and consultancy.

MPs are also hoping that the government’s appointment of Andrew Tyrie, former MP and influential chair of the parliamentary Treasury Select Committee, as chair of the Competition and Market Authority will give the competition regulator the necessary impetus to reopen the earlier closed enquiry or set up a follow-up.

The Department for Business, Energy and Industrial Strategy (BEIS) told Accountancy that the appointment of  Tyrie has now been fully approved by all relevant committees and ‘details of a proposed start date will be announced in the next few weeks’.

BEIS also confirmed last month that the Kingsman Review would assess the role, funding and effectiveness of the Financial Reporting Council (FRC) as the UK audit regulator.

A CMA spokesperson told Accountancy: ‘We are working closely with the Financial Reporting Council, whose role it is to regulate the quality of UK company audits, to see what more needs to be done to drive up standards.

‘As part of this, we are actively monitoring the impact of the remedies put in place following the Competition Commission’s inquiry.  The CMA remains open to looking further at the audit sector itself and will work with the FRC in support of any action it chooses to take.

The first audit market review, conducted by the Competition Commission in 2011, forced firms to tender their audits every 10 years and aimed to extend competition outside the Big Four. To some degree, the rules were watered down by subsequent EU rules brought in through the Audit Regulation and Directive (ARD).

Lack of competition

Any attempts to open up competition to non-Big Four firms to the listed FTSE market have pretty much failed with the latest figures from the Accountancy  FTSE 100 auditors survey showing that only one company, Randgold Resources, is audited by a mid-tier firm, namely BDO, and it retained the business in a recent audit retender. However, it is only a small audit in terms of value at £712,000, within a market worth £637m.

In a surprise move, the other major mid-tier audit firm, Grant Thornton, pulled out of tendering for FTSE audits in March, although it does have a strong non-audit service income stream.

Across the FTSE 250, in an audit market valued at the £192m according to the latest Accountancy research, the dominance of the Big Four is paramount at £188.7m market share with less than 2% of the market in the hands of only two mid-tiers – BDO and Grant Thornton – with eight audits between them valued at £3.5m.

Big Four and Carillion

In the case of Carillion, all of the Big Four were earning substantial fees across the board for various contracts.

KPMG was external auditor, Deloitte internal auditor and EY worked on some pre-collapse rescue advisory services. PwC was hauled in to handle the insolvency.

MPs accept that the ‘requirement for “sufficient resources”, which required large numbers of staff to start work on the insolvency within 12 hours of notification, limited the options to the Big Four accountancy firms’.

The committee report stated: ‘Despite PwC’s extensive prior involvement in Carillion, given that KPMG was Carillion’s external auditor, Deloitte its internal auditor and EY was responsible for its failed rescue plan, it was certainly credible for the Official Receiver to consider those other Big Four companies more conflicted.

‘Deloitte’s role with Carillion was not confined to internal audit. Among other roles, they acted as advisors to the remuneration committee, offered due diligence on the disastrous takeover of Eaga in 2011 and then received £730,000 for attempting a subsequent transformation programme at Eaga.

‘Such widespread involvement in Carillion was simply par for the course for the Big Four accountancy firms. Over the course of the last decade, they collectively received £51.2m for services to Carillion, a further £1.7m for work for the company’s pension schemes and £14.3m from government for work relating to contracts with Carillion.

‘EY, another member of the Big Four, were particularly heavily involved with Carillion after the profits warning in July 2017. They were appointed to oversee “Project Ray”, a transformation programme designed to reset the business.

‘Carillion paid them £10.8m over a six-month period, 385 in part to identify up to £123m of cost savings, mainly to be met through a 1,720 reduction in full-time UK employees.

‘Those savings were not achieved before the company collapsed. EY also helped negotiate the agreement with the pension Trustee to defer £25m in deficit recovery contributions and a “time to pay” arrangement with HMRC in October 2017 that deferred £22m of tax obligations.

‘As we noted earlier, EY even suggested extending standard payment terms to suppliers to 126 days.388 Their own fees, however, were not deferred. On Friday 12 January 2018, three days before the company was declared insolvent and one day before Philip Green wrote to the government pleading for taxpayer funding to keep the company going, Carillion paid EY £2.5m. On the same day, it paid out a further £3.9m to a raft of City law firms and other members of the Big Four.’

Report by Sara White

Article originally published on: https://accountingweekly.com/

5 Ways to Improve Your Work-Life Balance Today

Work is an expected societal norm: Go to school, get a job. But your career doesn’t have to be so strict and restraining. Work isn’t just a way to make money; it should serve you both financially and emotionally.

“Success, in my opinion, is about living a life through making choices that guide toward your goals to be your best,” said Dr. Michael Tischler, founder and CEO of Teeth Tomorrow. “The real key is to create goals that you are passionate about with respect to health/appearance, career and relationships.”

While work might be demanding at times, it should never become a priority over your wellbeing. You need time and energy for your hobbies and interests, for your family and loved ones. Don’t spend eight hours a day working just to come home and neglect the things that keep your spirits high and passion fresh. Here are five ways to improve your work-life balance.

When you hear “work-life balance,” you probably imagine waking up easily at 5 a.m., hitting the gym, grabbing your meal-prepped lunch and heading off to work, just to come home early, cook dinner, do some chores, and wind down with a nice book in bed by 9 p.m. But that’s often not the case.

Don’t strive for the perfect schedule; strive for a realistic one. Some days, you might focus more on work, while others you might have more time and energy to pursue your hobbies or relax on the couch with your loved ones. Balance is achieved over time, not each day.

“It is important to remain fluid and constantly assess where you are [versus] your goals and priorities,” said Heather Monahan, founder of #BossinHeels, a career mentoring group. “At times your children may need you, and other times you may need to travel for work; but allowing yourself to remain open to redirecting and assessing your needs on any day is key in finding balance.”

Your overall health should be your main concern. If you’ve been struggling with anxiety or depression and think therapy would benefit you, fit those sessions into your schedule, even if you have to leave work early or ditch your evening spin class. If you’re battling a chronic illness, don’t be afraid to call in on rough days. You’ll only prevent yourself from getting better, possibly causing you to take more days off in the future.

“Prioritizing your health first and foremost will make you a better employee and person,” said Monahan. “You will miss less work, and when you are there, you will be happier and more productive.”

According to Tischler, this can be as simple as daily meditation and exercise with respect to your occupation.

If you hate what you do, you aren’t going to be happy, plain and simple. You don’t need to love every aspect of your job, but it needs to be exciting enough that you don’t dread getting out of bed every single morning.

Monahan recommended choosing a job that you’re so passionate about you’d do it for free.

“If your job is draining you and you are finding it difficult to do the things you love outside of work, something is wrong,” she said. “You may be working in a toxic environment, for a toxic person, or doing a job that you truly don’t love. If this is the case, it is time to find a new job.”

We live in a connected world that never sleeps. Cutting ties with the outside world from time to time allows us to recover from weekly stress and gives us space for other thoughts and ideas emerge, said Jackie Stone, CMO of personal cloud storage company MiMedia.

“When you are always on, you don’t allow other things to surface that might be more important,” she added. “I meditate each morning for 10 minutes, which provides me with a great start to my day.”

Sometimes, truly unplugging means taking a vacation and shutting work completely off for a while.

“A vacation could be a 15-minute walk around the block without looking at your phone, or a vacation could be two or three weeks traveling with family/friends,” Stone said. “It’s important to take a step back to physically and mentally recharge. If you are surrounded by good people at work, a vacation should be easy to take.”

Monahan added that, when she used to travel with her boss for work, she’d look over to find him reading a novel while she would be doing something work-related.

“I didn’t understand at the time that he was giving himself a break and decompressing while I was leading myself to a potential burnout,” she said. Now, Monahan practices the same tactics. Taking that time to unwind is critical to success and will help you feel more energized when you’re on the clock.

While your job is important, it shouldn’t be your entire life. You were an individual before taking this position, and you should prioritize the activities or hobbies that made you happy.

“Whether you take a walk in the park, get a massage or [take] a hot bath, it’s important to always set aside an hour a week to do something for yourself,” said Mark Feldman, vice president of marketing at Stynt.

Additionally, you should focus on surrounding yourself with loved ones rather than making excuses to be alone all week. Just because work keeps you busy doesn’t mean that you should neglect personal relationships.

“Realize that no one at your company is going to love you or appreciate you the way your loved ones do,” said Monahan. “Also [remember] that everyone is replaceable at work, and no matter how important you think your job is, the company will not miss a beat tomorrow if you are gone.”

Don’t take your loved ones for granted just because you know they’ll always be there for you. If anything, that’s more of a reason to make more time for them.

Additional reporting by Shannon Gausepohl and Nicole Fallon. Some source interviews were conducted for a previous version of this article.