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Reflections of an Agent

ABN Director Peter Thorp reflects on possible solutions to deal with unregistered agents

On a recent visit to a country town, I was informed that there was a very high number of unregistered agents (BAS agents, that is) in the area. I found this disturbing on a number of fronts:

• Those agents who had done the right thing were competing on a playing field that was not level. They had stumped up and ensured they met the educational benchmarks, relevant experience and PI insurance criteria, and obeyed the Code of Professional Conduct. The unregistered agent had simply adopted an hourly rate below the prevailing market price and approached potential clients. Many clients in business are still ignorant as to the requirements of bookkeepers to be registered as BAS agents, and of the fact that the TPB system of registration is there to protect them. They do, however, understand the difference between $25 an hour and $50 an hour.
• Clients are not being properly served by unregistered agents, as the provisions surrounding qualifications, experience and agent behaviour have been subverted.

Why would this be the case? 

I was told the local TAFE were pumping out students with the appropriate qualification but these people had difficulty obtaining employment in order to gain relevant experience and register as a BAS agent, so they simply traded without a registration. Also, the town was a pleasant place to live and was infiltrated with people happy to work part-time as a contract bookkeeper at modest rates. The fact that the BAS agents doing the right thing experience pricing pressure (particularly from unregistered agents) means that it is uneconomic to employ people, which also means it is difficult for aspiring agents to gain relevant experience—a “catch 22” situation.

It seems to me there are only a few solutions to this dilemma:

1. Do nothing: BAS agents doing the right thing will be unhappy and clients will be poorly serviced;
2. Everyone hands in their agent registration: This “tongue in cheek” solution would level the playing field but the client is still poorly serviced and everyone risks losing their house if the TPB prosecutes them, so this option is not really viable;
3. Everyone gets registered: The playing field is levelled, clients are better serviced and because agents can charge properly for their service they can afford to employ industry starters who can then gain relevant experience.

On the assumption that solution 3 is the way to go, how do we ensure everyone gets registered? 

Prosecutions and the reporting of prosecutions will help. The Board are prosecuting unregistered BAS and tax agents but it is not easy for them to find them (especially unregistered BAS agents). Perhaps we as registered agents should be more vigilant and take proactive steps when becoming aware of unregistered agents. Let them know they are doing the wrong thing. If they do not believe you then suggest they contact the TPB for clarification, or send them a copy of this article. Or you could dob them in, as the Board do act on referrals. Yes, I can hear the chorus of “it is un-Australian to dob someone in” but think about it… Unregistered agents are potentially harming their clients (who haven’t had to clean up the mess of an unregistered agent), their peers (like those in the country town I visited), and the industry as a whole. Plus, indirectly, they are even harming themselves. Would you stand idly by if your neighbour’s son—unlicensed and driving an unregistered car—risked the lives of those around him?

Let’s not stand idly by. Let’s resolve to do something about it. If we want clients, prospective clients and accountants to give our industry the respect it deserves then we need to show that we respect it ourselves. What can we do? Let’s start with:

• not turning a blind eye to illegals (help educate them or dob them in);
• keeping standards high;
• maintaining knowledge levels;
• promoting your qualifications, affiliations and memberships;
• using the TPB’s registered agent logo, which is set to be unveiled soon and shows at a glance that you are registered;
• on your websites and promotional material, explain what it means to use a registered agent. After all, you play an integral part in a system that has your clients’ protection at heart.

What are the BAS solutions for those that are not registered or yet to qualify for registration? 

First and foremost, unregistered bookkeepers must shape their business models such that they are not rendering BAS services to their clients. A model that is confined to general bookkeeping without BAS preparation or advice on BAS provisions would be the limit of such a model. In practice, this is difficult to do unless the unregistered agent works closely with a BAS or tax agent, which is the way it should be in order to protect clients and gain appropriate experience.

Alternatively, ABN BAS is there to help those bookkeepers who are unable to structure a suitable arrangement with another BAS or tax agent. The core purpose of ABN BAS is to:

• support aspiring agents as they gain relevant experience prior to gaining their own registration;
• support bookkeepers whose clients have minimal BAS service needs, but who wish to ensure those needs are properly met;
• increase the rate of proper compliance by clients with tax and GST laws.

Let us agents join forces and give our industry the shake-up it needs—shaken, of course, not stirred.

Article written by Peter Thorp

Director of Australian Bookkeepers Network (ABN)

To find out more about ABN visit www.austbook.net

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