This week we’re looking at the full time employment model, which is the model most people are probably used to. You know, the one where you grow up, maybe go to uni (or take on a cadetship while you study), then graduate and get a job. And that job is a full time gig. 40 hours a week plus or minus.
For smaller accounting firms, and just as applicable to bigger accounting firms, we see a disconnect between the SMSF work available and the SMSF resources available. Generally we find that SMSF staff are dedicated to preparing and completing SMSF work, just based on this being a specialty area.
And in this specialty area, let’s say the SMSF resource hired can complete 100 SMSF’s per year, or 120 per year. If the SMSF’s in the firm are below this, and I expect the average across Australian firms is more like 30 SMSF’s per accounting firm, then you either have 0 resources available, and have to arrange for another Australian firm to complete the work at wholesale rates of say $1,200, or you outsource the work overseas to a company like Odyssey for around $350 per fund.
If you do happen to have a full time resource for the 30 funds, then happy days, and the funds are done, but you are left with surplus SMSF capacity. So you either try and do SMSF’s for other firms, not at your retail $2,200 rate, but at the wholesale accounting firm to accounting firm $1,200 rate, otherwise you think of creative ways to reduce the wage (working part time), or assign other activities like BAS or bookkeeping. These are usually lower recovery hours.
In fact the above scenario affects every firm. And ever firm will attempt to have surplus resources to deal with demand. So if they have 430 funds, they’ll hire 5 staff. And either the fifth staff doesn’t work too hard, or the whole department of 5 staff won’t work too hard, which affects firm culture.
If you’ve seen many of the “user” models available, then you’d expect someone is going to come up with something clever to efficiently soak up the huge amount of surplus compliance resources in the Australian accounting world. And if you want to get ahead of the curve, then you should start to experience and experiment with “ad-hoc” on demand business models.
Odyssey provides ad-hoc Australian accounting and tax outsourced services to over 500 Australian accounting firms. Talk to us today if you’d like to see how the “ad-hoc” on demand business model might help your firm.