WESTERN SYDNEY
Family Business
With David Pring
Welcome Challenges of Indigenous businesses
Welcome to KPMG Family Business feature articles. If you would like to discuss these articles or how KPMG can help with your business please feel free to contact me on 9455 9996 or davidpring@kpmg.com.au
Start by getting on top of your finances GLEN BRENNAN HILE the buzz words of 2020 like agile, pivot and adaptability are used as COVID-19 descriptors, the truth is that those words could be used to describe Indigenous Australians for the last 60,000 years. Now more than ever Indigenous organisations need these traits because if COVID has revealed anything, it is that “everyone has a plan until they get punched in the mouth” to quote Mike Tyson. Running Indigenous organisations is challenging at the best of times. Managing community expectations while acquitting funding and complying with rules and regulations presents a minefield of risks for Indigenous boards and executives. With the pandemic far from over and continuing to impact organisations in Australia and around the world, Indigenous organisations who are part of the mainstream economy are not immune. When I reflect on the last six months, there has been one recurring theme that has challenged Indigenous organisations more than most. It was that Boards and Executives of Indigenous organisations found that they were unable to access accurate and timely financial information to make informed decisions. Because of this, there has been a heightened level of anxiety among Indigenous Board and Executives about their organisation’s financial health. This anxiety wasn’t purely because they thought they were in financial trouble, rather they just didn’t know how they were travelling with their finances. As one Indigenous executive said, they felt they were ‘flying blind’. To further compound the visibility issue, even when some Boards and Executives got their organisations financial information it was more of a ‘data dump of numbers’ which required decryption. Indigenous organisations with multiple funding sources need clarity, not just of their organisation’s overall performance, but also individual programs. As another worried Indigenous executive bemoaned ‘the devil is always in the detail’.
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If COVID-19 has taught us anything, it’s that the old ways of doing business may not be the best way in the future. Leaders have been forced to review how they do business and the performance of core functions. So, it should come as no surprise that the finance areas of Indigenous organisations have come under closer scrutiny. Fed up with flying blind, data dumps and sleepless nights, worrying that they had missed something important, Indigenous Boards and Executives have embraced the new normal and looked to outsource their bookkeeping, payroll and finance function. Therefore, here are my top four tips of what Indigenous organisations need to look for when outsourcing. • A dedicated finance officer – Just because you outsource doesn’t
mean you don’t have someone to talk to. The truth is its always handy to have a dedicated person who will answer your queries. • Reconciling receipts and invoices – It is painful at the best of time, however, make sure there is a simple way to digitise receipts and invoices and send them through to a single source for processing. • Bank transactions – You should be able to avoid printing bank statements. Ensure bank transactions feed straight through to your accounting software. • Single touch payroll – You need an integrated system that will report to the ATO as well as keeping
a good record of your payroll and super stream. I realise it might sound counter intuitive to many Indigenous organisations to outsource their finance function. I understand that organisations have long standing relationships with bookkeepers and accountants. However, from my experience it will provide you with more visibility and greater control over your finances. No more flying blind and sleepless nights and more time to deliver your important work. At the end of the day, that is what matters the most… First published by Glen Brennan, Partner, KPMG Indigenous Services, KPMG Australia on KPMG Newsroom on 13 November 2020.
WESTERN SYDNEY BUSINESS ACCESS DECEMBER 2020
