Upskilling your practice for the new normal in accountancy

Firms already on the path to digitalisation will have seen this period of prolonged remote working, and online collaboration, as justification for their continued investment in technology. For those pioneering firms that see technology as an enabler for the growth of their practice, it is very much a key factor in their ability to not only survive, but to thrive in a post-COVID world.

With so much reliance on technology, where does that leave the humble accountant? What now for your team of technical experts who have perhaps delivered services in the same way for many years? Whilst automation is expected to change 50% of accountancy and finance related jobs, the World Economic Forum estimates that it is not expected to eliminate any more than 5% of roles.

Accountants, as any tax professional will attest, are incredibly resilient and adaptive to change. They are poised for growth if they can take the opportunities that will present themselves over the coming years. One way to prepare for this opportunity is to build a practice ripe for technology to work with skilled professionals in your practice.

Upskilling your practice to work hand in hand with the technology to provide an efficient practice that keeps up with the remote working regulations changes, changing client expectations. Beyond building a competitive customer experience, you will need to build a practice that keeps up with the changing expectations of individuals in the workplace, shifting social norms and values, and new types and levels of connectivity and demographics.

Learning from past economic downturns

In the early 1990s many practices understandably put recruitment on hold throughout the recession, with many cancelling graduate recruitment programs. A necessary move for cashflow perhaps, but within a few years this created a sizeable skills gap. There was a distinct shortage of part-qualified and semi-senior candidates coming through the ranks and it is very expensive to have fully qualified staff doing the work of part-qualifieds and semi-seniors.

Firms with a little more agility were able to cherry pick the best candidates during the recession and were primed for growth in the period of economic recovery. The same pattern today. The firms that are able to adapt quickly and repurpose their business for the changing times are able to keep their existing talent and attract the best of the rest.

 

Learning to work with automation

The synergy of accountant and machine can open doors to higher-value work, making practices more efficient, more productive, more interesting, and ultimately more meaningful. Automating routine tasks frees up time for your team to do more of what your client’s value most – providing insight and supporting their business ambitions.

Having the desire to work digitally creates momentum. Prioritise data analysis over data entry and valuable conversations with your clients will follow. Even with automation, the business of accountancy is still all about relationships.

 

Recruiting for change

Change inevitably impacts greatest on your people. Ensuring they have the skills to operate effectively in a new and uncertain landscape is always difficult. The soft skills of yesterday will become the essential skills of tomorrow. Until now you may have been recruiting people with great inter-personal skills, who quickly make people feel at ease in their company, who make great use of body language and can build rapport effortlessly. Are those people able to manage relationships as effectively over a video call as they are in person? If they aren’t, they will certainly need to.

Recruiting people who have a clear aptitude for change, a passion for new technology and the people skills needed to build strong connections with clients will be paramount. In addition to the expertise needed, these tech-loving accountants with the know-how in the profession and a passion for new ideas and innovative tech solutions will be keen drivers in the synergy between man and machine and the growth of advisory services in the business.

Technical proficiency has limited value for those unable to communicate effectively in a language client will understand.

 

Bring in the new or upskill the old

It’s important to understand the skill set that you've got within your practice today. Have you got the right people with the skills to offer advisory services, work remotely with your clients and meet their ever-changing needs?

If not, is there the potential to upskill your existing team or do you need to bring in new talent? Have you got a team of technologists? This could be an opportunity to recruit people with those skills to enrich your offering to clients.

Investing in people, technology and relationships is ultimately not just a strategy for making it out of an economic downturn but a strategy for riding the economic upturn that inevitably follows.

 

Beyond the movement control order: employment & HR issues

Authors: Donovan Cheah (Partner) and Zi-Han Lim (Associate) (Donovan & Ho)

www.dnh.com.my

With the movement control order (MCO) creating many novel workplace issues, many employers are still struggling to adjust to what it means to have “business as usual” during the MCO.

Once the MCO is lifted fully, workplaces will likely not be able to return to normal. The possibility of restrictions to promote social distancing to curb the spread of the COVID-19 virus may become a necessity and thus, compulsory. The HR function will, therefore, play a pivotal role in balancing the welfare of employees, with the need to minimise interruptions to business operations.

As businesses look ahead, here are some employment and HR issues that employers need to consider:

          1. Implementing safety and sanitisation measures

Employers should re-evaluate their current safety measures to prevent the spread of the virus in the workplace. This include:

          • having hand sanitisers at every entrance of the Company’s premises

          • imposing a mandatory sanitisation policy for visitors

          • providing face masks

          • ensuring proper distancing in the seating arrangements for employees

          • putting up notices to remind employees of hygiene standards

          • imposing temperature checks on all visitors and employees prior to entry to the premises

          • imposing a stricter health policy such as prohibiting sick employees from working at the Company’s premises and requiring them to take sick leave, and

          • setting a travel policy to restrict non-essential business travel and to remind employees not to travel to high-risk locations even in their personal time.

          2. Remote working/work from home

The MCO has shown us that for some businesses, working in the comfort of your own house can still be productive. Employers are able to continue this even after the MCO has been lifted, or introduce a rotation policy where different departments can take alternate weeks off to work from home while the remaining ones can work in the office.

          3. Limit face-to-face meetings

The MCO has also demonstrated that many face-to-face meetings are non-essential, and businesses can still communicate with their customers and employees using technology. Employers can, therefore, limit the need for physical meetings by using software, such as Google Hangouts, Zoom, Whatsapp video calls or Facetime. This approach will also complement any work from home policy that is implemented.

          4. Security

If working from home will be considered the “new normal”, employers need to look into whether they have adequate infrastructure for cyber security to support remote working. There is an increased risk of a breach as employees may not be logged into your organisation’s network and may be using their own devices. As there is less need to meet people face-to-face, there will be a corresponding increase in the need for authentication and authorisation whenever employees are dealing with third parties, preventing attacks, such as phishing and malware. This is especially if the employees are dealing with sensitive or confidential information. As such, employers should re-evaluate whether there are any security gaps in their IT infrastructure that need to be addressed, as this is a worthwhile, long-term investment given that the way we work is now changing very rapidly.

          5. Cost-cutting measures

When the MCO is lifted in full and employees are allowed to go back to work, given the current economic climate, companies should still look into practical cost-cutting measures to ensure long-term sustainability of their operations. From an HR perspective, this could include eliminating or suspending non-essential fringe employee benefits, such as corporate gym memberships, company dinners and entertainment or lifestyle/clothing allowances. Discretionary bonuses or incentives can also be limited, reduced or removed.

          6. Reviewing HR guidelines

Given the impact of the COVID-19 outbreak, HR guidelines and policies ought to be reviewed to ensure that they are adequate to support any measures that the Company intends to take and that they are also commensurate with the Company’s current financial standing and the overall economic climate.

As mentioned above, “nice to have” but not essential fringe benefits may have to be looked into especially if they are offered to employees in writing via company policy or in their contract of employment. Crucial policies that may impact the Company’s financial position and salary costs, such as retrenchment benefits, promotions, bonus and increment, must be re-looked at this juncture. Other policies that are worth updating would include IT policies/use of own devices policies, confidentiality policies and remote working/flexible working hours policies.

Preparation is the best defence against turbulent times, and thinking beyond the MCO may be crucial if a company intends to stay afloat.

(Note: For further information about our Asia Pacific Employment Law subscription, contact us at my-sales@wolterskluwer.com (Malaysia) or sg-sales@wolterskluwer.com (Singapore)).

COVID-19: Commendable retrenchment package by Grab Singapore

By Kavitha Kesavan (Content Management Analyst)

Ride-hailing and payments firm Grab announced that it laid off about 360 employees, or 5% of its workforce, to cope with the impact of the COVID-19 outbreak. In a note to employees, CEO and co-founder Anthony Tan said that this is Grab's "last organisation-wide layoff" for 2020. COVID-19 was quoted as the “single biggest crisis to affect Grab”. Over the past few months, Grab has reviewed all costs, cut back on discretionary spending and reduced the salaries for senior management.

CEO and co-founder Anthony Tan sent out a note to employees in the morning of the day of the announcement to explain the reasons for the decision and apologised to staff. Employees were requested to be patient as leaders worked to facilitate the retrenchment exercise with a high degree of sensitivity and with utmost respect for privacy and encouraged employees to support each other. Anthony said employees can contact him directly via email if they had any questions or simply needed a listening ear, and he is glad to receive their feedback and will do his best to provide answers.

The fact that employees were told that they will receive an e-mail by 1pm on the day of the announcement is not a something to be encouraged as watching their inboxes to see if they will receive that e-mail is definitely not easy and causes anxiety. Informing affected employees about retrenchments via e-mail was regarded as insensitive. Employees were informed that they would be able to speak to their Business Managers and HR representatives personally in the days after the announcement.

However, the company offered the following commendable benefits to the affected staff:

• Severance payment of half a month for every six months of completed service.
• Enhanced separation payment, worth about 1.5 months of salary, for assistance during the     COVID-19 crisis and bonus for work done for 2020.
•  Medical insurance coverage until the end of 2020.
•  Maternity and paternity leave encashment for expecting mothers and male staff whose wife is   expecting is eligible for the benefit as of the last date of employment.
• Option to keep their laptops to support job search of employees.
• Access to sessions with a life coach and half a year’s worth of online career development tools which allows employees to continue growing in their personal and professional lives.
• Emotional support via the Grabber Assistance Program, for 3 months.
• Annual cliffs waiver for equity vesting, which allows staff to leave as shareholders
•  Encashment of unused accrued annual leave and unused GrabFlex credits under staffs’ Flexible Spending Account.

Retrenching staff should be the final option. However, if it still needs to be done, the process should be conducted with empathy, care and respect which includes sensitive communication and fair severance packages.

(Note: For further information about our Asia Pacific Employment Law and Singapore Employment Handbook Service subscription, contact us at my-sales@wolterskluwer.com (Malaysia) or sg-sales@wolterskluwer.com (Singapore).

How Wolters Kluwer Tax & Accounting in Asia Pacific is delivering impact beyond COVID-19

By Izzy Silva
Managing Director
Wolters Kluwer APAC

Wolters Kluwer has served professionals in AsiaPacific for over four decades, helping them enhance workflows and make informed decisions. Our expert solutions – a combination of deep domain knowledge with advanced technology and services – deliver better outcomes, analytics, and improved productivity and help solve complex problems for our customers. We are grateful and appreciative of recognition we have received for supporting customers and helping them realise their potential and deliver impact when it matters the most. 

One of the significant benefits of being part of a global organisation, with a 183-year legacy and portfolio representing thousands of customers worldwide (including 93% of the Fortune 500 companies), is having the ability to respond during a crisis. We are also grounded in our values  ̶  focus on the customer, make it better, aim high and deliver, and win as a team  ̶  which has helped us stay focused even during these challenging times.

We walk the talk

COVID-19: a snapshot of how various countries in the Asia-Pacific help companies tackle the pandemic

Authors: Premsheila Khindria (Content Management Analyst) and               Kavitha Kesavan (Content Management Analyst)

On 11 March 2020, the World Health Organization declared COVID-19 as a global pandemic which has led billions of people into lockdown. The governments of various countries are issuing numerous measures to contain the pandemic such as flexibility to work from home and reliefs for employees and businesses suffering due to the lockdown. In this article, we have briefly addressed how each of the 14 countries covered in our Asia Pacific Employment Law subscription has dealt with this situation, including measures to help employees stay employed and guidance to prevent the spread of the virus at the workplace. (Note: For further information about our Asia Pacific Employment Law subscription, contact us at my-sales@wolterskluwer.com (Malaysia) or sg-sales@wolterskluwer.com (Singapore).

Solidarity Budget - what's in it for you?

By Kavitha Kesavan (Content Management Analyst)

 Deputy Prime Minister and Finance Minister, Heng Swee Keat, announced the third round of support measures called “Solidarity Budget” which follows the Unity Budget announced on 18 February 2020 and the Resilience Budget of 26 March 2020 to help tide businesses, workers and households through the COVID-19 outbreak. Singapore will implement heightened safe-distancing measures from 7 April to 4 May 2020. An additional S$5.1b will be mobilised to see Singaporeans and businesses through this period. The following are the highlights of the speech.

Enhanced Jobs Support Scheme (JSS)

         • The Government will raise its wage subsidy for all firms to 75% of gross monthly wages, for the first S$4,600 of wages paid in April 2020, for each employee. Regardless of how much they earn, the maximum subsidy to the firms will be 75% of S$4,600 per person, which is S$3,450. In the Resilience Budget, the wage subsidy offered ranged from 25% to 75% for a few sectors (75% wage support for aviation and tourism sectors; 50% for the food services sector, and 25% for all other sectors).

         • First JSS payout will be brought forward from May 2020 to April 2020.

Self-Employed Person (SEP) Income Relief Scheme (SIRS)

         • About 100,000 SEPs will benefit from SIRS.

         • Extend SIRS to automatically include self-employed persons who also earn a small income from employment work. Self-employed persons are a very diverse group. Some are own-account workers, like taxi drivers, who engage in a trade or business but do not employ any paid workers. Others are sole proprietors, who own small businesses that have employees and a network of business relations.

         • Raise the annual value of property threshold from S$13,000 to up to S$21,000. This will include those who live in some condominiums and other private properties.

         • Eligible SEPs will receive three quarterly cash payouts of S$3,000 each in May, July and October 2020.

         • Other criteria remain unchanged.

Further measures to ease labour costs

         • Waiver of monthly Foreign Worker Levy (FWL) due in April 2020 to help firms with cash flow.

       • FWL rebate of S$750 in April 2020 from levies paid in 2020, for each Work Permit or S Pass holder.

Laws to ensure property owners pass on property tax rebate to tenants

         • A Bill will be introduced to let businesses and individuals defer certain contractual obligations such as paying rent, repaying loans or completing work for a period. The Bill will also ensure that property owners pass on the property tax rebate in full to tenants.

Rental waiver

          •  One-month rental waiver for office, commercial and agriculture tenants of government agencies

         • Stall owners in NEA hawker centres will continue to enjoy three months of rental waivers, while commercial tenants will continue to receive two months of rental waivers.

More finance support for enterprises

         • The Government’s risk share raised from 80% to 90% for EFS Trade Loan, EFS-SME Working Capital Loan and Temporary Bridging Loan Programme and applies to loans initiated from 8 April 2020 till 31 March 2021.

Cash payments for Singaporeans

         • All Singaporeans aged 21 and above will receive a one-off payout of S$600 in April 2020

         •  S$300 from enhanced Care and Support — Cash payout will be made in April 2020

         • Additional and enhanced cash amounts for all Singaporeans aged 21 and above in 2020 as per the following.

Assessable Income for YA2019	Additional + Enhanced Cash Payments	Total Cash Payment	Payment in April 2020	Payment in June 2020
Not more than $28k	$300 + $900	$1,200	$600	$600
Above $28k to $100k	$300 + $600	$900	$600	$300
>$100k  or owns more than 1 property	$300 + $300	$600	$600	−

           • The S$100 Passion Card Top-up in cash for Singaporeans aged 50 and above this year has also been brought forward to June.  
 • The S$300 payout for each parent with at least one child aged 20 and below had been brought forward to June. 

         (Note: For further information about our Asia Pacific Employment Law and Singapore Employment Handbook Service subscription, contact us at contact us at sg-sales@wolterskluwer.com (Singapore)).

Tax Relief Proposals for SMEs

This article is written by S. Saravana Kumar and Yap wen Hui and was originally published in the Malay Mail. Reproduced with permission.

The movement control order (MCO) has affected all of us, from individual and businesses. However, as majority of the business establishments in Malaysia are small and medium enterprises (SMEs), they are the worst hit sector in Malaysia. Although the SMEs welcome the extension of time for tax filings and payments, they are seeking for more assistance from the Government such as some special tax relief. Some additional tax relief measures that the Government can consider are:-

• A lower corporate tax rate or a tax rebate of RM 250,000 in the year of assessment (“YA”) 2020 for SMEs that do not retrench its employees. The tax rebate can be modified depending on the SMEs turnover size and number of employees.

• Double deduction on all financing costs such as interest, guarantee fees, arranger fee etc on the financing obtained by SMEs in 2020 provided the financing is used wholly as working capital for the SMEs’ business and there is no retrenchment of employees.

• Double deduction on expenses incurred to purchase equipment to facilitate the work from home concept during the MCO period. This can include the expenses to purchase laptops and subscribing to online communication applications.

• Double deduction on office, factory, warehouse and workers’ hostel rental expenses for at least 6 months beginning March 2020 or alternatively, a special tax rebate for landlords who waive rental during the same period.

• Accelerated capital allowance and industrial building allowance for SMEs that incur capital expenditure to acquire additional equipment and building in the YA 2020.

• Ease the conditions for SMEs to claim the allowance for increased export. 

• Tax credit arising from overpayment of taxes in the past can be used as a tax credit for future tax obligations including for the YA 2020.

• Waiver or reduction in withholding tax and service tax on payments made to non-residents for online business promotion initiatives. This will help to reduce the cost of doing business as some SMEs are bearing the withholding tax and service tax on behalf of the non-residents.
• (Waiver of sales tax for taxable products manufactured from March 2020 to year-end.
• A longer and flexible instalment scheme for all kinds of tax payments, including income tax and customs duties.
• Suspension of civil suit proceedings for non-payment of tax until 15 October 2020 to enable taxpayers to focus on rebuilding their business rather than litigating in court especially for the first 6 months.
• Suspension of tax audits and tax investigations for 6 months until end September 2020 to enable SMEs to focus on their business. Criminal investigation for tax and custom offences can continue.
• Stamp duty waiver for financing documents executed between 1 March to 31 December 2020.
• Temporary waiver of service tax on SMEs involved in the service sector such as hospitality, food and beverage and consultancy with an annual income of RM 2.5 million or less in 2020.
• Temporary suspension of sales tax on products manufactured in Malaysia in 2020.

These proposals may help SMEs to weather the present challenges and express the Government’s empathy on the challenges faced by the SMEs.

* S. Saravana Kumar is a tax lawyer and partner with Rosli Dahlan Saravana Partnership (RDS). He was recently named as one of the top 100 lawyers in Malaysia by the Asia Business Law Journal.

* Yap Wen Hui is a legal and tax trainee with RDS. A barrister by training, she read law at the University of Warwick.

Covid-19 and Malaysia's Economic Stimulus Package

Malaysia has confirmed a total of 22 cases as of 25 February 2020 and so far 20 patients have recovered. In order to treat Covid-19 suspected and positive cases, The Ministry of Health had expedite Covid-19 screening at 48 hospitals and announced 26 referral hospitals. The Government started taking stricter control measures after discovering the 14th case which occurred through a human-to-human transmission. 

The most affected sectors in Malaysia are the Travel and Tourism and associated sectors such as accommodation (Hotels) as they have been getting a lot of cancellations from tourists ever since the outbreak. Bank Negara Malaysia announced that the Covid-19 outbreak will affect Malaysia's economic growth in Q1 2020. 

Analyst and industry players hopes that the Government will introduce a stimulus package to stimulate Malaysia's economy and lighten any adverse repercussions from the Covid-19 outbreak. A stimulus package is soon to be announced and the followings are some of the proposed measures by experts: 

 * EPF contribution rate reduction for affected sectors. 

 * Incentives and Tax rebates for affected sectors. 

 * Discounts for affected sectors. 

 * Stimulus package for the services and manufacturing sector to boost economic growth. 

 * Reduction in borrowing cost.

Let's hope for some exciting measures to be announced in the upcoming stimulus package. 

Lochana Nanthacumar

Content Management Analyst

Wolters Kluwer Malaysia