Agribusiness accounting - a growth sector not multiplying fast enough

These days it's not unusual for farm sector accountants like Graeme Obst to be in touch with some of their primary producer clients almost daily, or at least multiple times a month.

Farm business succession, superannuation planning and increasingly complex management and taxation considerations have deepened the rural sector's reliance on bush accountants' guidance and skills.

Family farms and ag services providers are not just getting bigger or investing in more expensive and technical machinery and marketing requirements, they are exposed to more potential taxation potholes and expansion hurdles, too.

Mr Obst, managing partner at southern NSW chartered accounting group, AKW, said while not all farmer clients required high levels of tax or business planning help, generally there was "quite a lot more work involved these days".

"We're certainly busier managing challenges around business succession and working to get the desired viability outcomes for the farm and the different generations involved," he said.

"Navigating your way through capital gains tax requirements and concessions is one area, in particular, requiring a fair bit of time and industry understanding."

He noted how income tax turnover thresholds were effectively getting tighter - remaining unchanged while agricultural commodity prices, costs and land values had jumped.

The federal government's once popular instant asset depreciation write-off arrangements (temporary full expensing) had also suddenly generated a tidal wave of more fundamental budgeting surprises and taxation queries for clients.

What began as tax time relief incentives to get farmers and other businesses investing in new machinery and infrastructure in 2011 must now be reconciled if that same gear was traded in, subsequently often generating unforeseen taxable income.

The changing and more complex financial service expectations at Mr Obst's Wagga Wagga-based firm have reflected a trend among accounting businesses Australia-wide.

A recent report highlighted accountants' expanding advisory roles and new business pressures, including a big need for more qualified staff.

The report, commissioned by National Australia Bank, showed while traditional compliance-related activities such as tax were still a strong core business, other services including business planning and business strategy were now almost equal in importance.

When NAB surveyed accounting firms in 2018, 77 per cent were offering business strategy services - today that figure was up to 85pc.

In regional areas, the report noted accounting firms had seen an agricultural market boom, good seasons and record migration in recent years, which had helped their own businesses, too.

"Two thirds anticipate good business growth (for their practice) in the year ahead," observed NAB regional and agribusiness banking executive for southern NSW and ACT, Naomi Stuart.

"Firms with scale, skill and reputation in our regional centres are doing really well and the outlook is very positive," she said.

However, staffing shortages, continued high inflation and interest rates and the farm sector's El Nino dry weather challenges were increasing stresses for regional accountants.

Finding and retaining accountancy staff were the biggest challenges.

Rural areas had the highest vacancy rates, despite regional communities having enjoyed their biggest population growth in more than a decade when many city workers moved to the bush in the past two years.

Ms Stuart said regional firms were using recruitment agencies and actively pursuing potential employees from big international firms, or starting early to engage with students finishing school.

She also noted many of those who flocked to regional centres during the COVID pandemic to work remotely for city employers were now expected to return to their office more regularly, which may have potential benefits for country firms.

"It will be interesting to see whether regional firms can entice them across," she said.

Mr Obst said while he had seen some evidence of city accountants switching to country jobs, he doubted it was a serious solution to the profession's skills shortage.

In fact, it was still common for younger staff, who had learnt the ropes in regional practices, to move to city firms or overseas, at least for a five years to broaden their experience.

In the meantime, the 95-year-old AKW practice, which employs 55 people spread from Griffith in the west to Tumut in the east, made the most of its contacts with school careers advisors, TAFE colleges and university student networks to promote job openings and traineeships.

Overseas trained accountants looking at regional jobs as part of their visa requirements were also potential recruits, as were people with backgrounds in other jobs such as banking or clerical roles.

"We've always got a vacancy to fill," he said.

"I think it's a great career - especially in the agricultural side of our business."

He enjoyed "doing something that helps build a farming business", particularly spending time on farms understanding what was happening and how producers' goals were progressing.

Most of AKW's work is related to a diverse range of agricultural accounting needs, including financial planning.

While most of its farm sector clients have businesses turning over less than $2 million a year, a significant number have operations spanning multiple properties and other interests which generate far bigger revenues.

"We've worked with quite a few individuals and small partnerships who are now quite big operators with several properties."