Technology and GST among biggest changes of Kothes’ 70 years

When Roy Kothe opened an accounting office in Carp Street Bega in 1947 he had two staff members, Jean Cleary and Gwen Bucket, and in their first year the firm prepared around 180 tax returns by hand.
Fast forward 70 years and it’s a whole new world for Kothes Accounting Group, which now has seven offices, seven directors and 50 staff in an industry dominated by cloud technology and complex government reporting.

When John Hukins started working with the firm in 1976 only primitive computers existed and they completed most of their work manually using calculators as backup.

Kevin Philistin started at Kothes in 1987, when capital gains tax was in its infancy. In his 30 years with the firm he’s seen several office relocations in Merimbula and Bega as well as expansions into other areas including Eden, Bombala, Cooma, Jindabyne and Bermagui.

Kevin says technology has completely changed the way Kothes and its clients do business.

“Historically we had peak seasons and no staff could take holidays for the first six months of the financial year because that was just so busy for us, and it was a bit quieter for a few months from January until it ramped up again. Now with changes in ATO reporting and tax laws, and technology speeding up response times, we are busy all year round.”

Gary Pearce, who worked as an auditor with the Australian Tax Office before joining Kothes in 1989, notes that back then they completed tax returns with a pencil on pre-printed forms. They then gave these forms to their secretarial staff to type up for clients to sign. “We then lodged these tax returns in paper format in bulk by post or we hand-delivered them by car to the ATO in Canberra on deadline days,” he recalls.

Making appointments and receiving messages was similarly time consuming. Secretarial staff wrote down carbon copy messages and appointments then hand delivered them to directors every morning, at the same time updating individual appointment diaries by hand.

Simon Byrne started working for Kothes in 1992 and says technology and introducing the GST have created major changes for the accounting industry. New taxes and legislation have also resulted in major changes.

Gone are the days of being a jack of all trades and a master of none.

“Whilst governments genuinely attempt to reduce red tape for small business the reality is it has never been more complex to run a small to medium size business with the introduction of new taxes and legislation over the years. Although businesses are benefiting from the efficiency gains produced from cloud accounting, we have had to make big changes within our business to be able to best meet their needs.

“We have gone down the path of having specialised divisions within the firm – Tax, Audit, Self-Managed Super Funds and Financial Planning – as a way of ensuring we are able to keep on top of these rapid changes in technology and government and tax legislation.”

Gary Skelton started working at Kothes in 1993 and says at that time, the majority of work they completed for their clients was preparing tax returns. He says the role of an accountant has changed significantly since then. “Kothes now does a whole lot more for our clients whose expectations have expanded to include other services such as investment, superannuation, retirement planning and aged care advice. Also stockbroking, insurances, estate planning, Centrelink assistance and a whole lot more,” Gary says.

When Fiona Dunham started working with Kothes 20 years ago, the four staff in her office shared two computers. To complete financials they hand wrote numbers onto paper spreadsheets, added totals on a calculator, entered the totals into a computer then printed off reports for further analysis and work.

Financial results were not available until months after the end of the financial year and everything was stored on paper.

Now every staff member has at least one computer, if not a computer, tablet and mobile phone. Data is directly downloaded to the client’s accounting package from the bank in real time. “Results are available immediately. There is no more waiting until after the end of the financial year to see how a business is doing. Everything is stored electronically and available without the need for a paper file, whether we are in the office or visiting a client. This has allowed faster and more responsive analysis of results – allowing clients to take advantage of opportunities or head off issues earlier.”

Peter Mann has copies of some of the firm’s original tax returns dated August 26, 1948. The 1940s directions on how to complete your tax return fits into two A3 pages, compared with today’s guide which is hundreds of pages long.

A 1940s copy of directions to assist in preparing your tax return.

Peter started working with Kothes 12 years ago and says these old returns are a reminder of just how much technology has changed tax and accounting. “Technology has made some of the simpler transactions quicker but the requirement for small business to be responsible to collect taxes and report more business-related information to government agencies can make compliance more complicated and costly to administer.”

I still get a few receipts in shoe boxes but more and more information is coming in digital format and via cloud technology.