Funding during the crisis

In an interview with Alexander Thiem from the foerderquelle.de and Daniel Terwersche from the law firm strategists.

The BAFA was inundated with accreditation enquiries and grant applications. Many unscrupulous opportunists tried to capitalise on the aid at short notice. The BAFA has now halted the coronavirus aid schemes. But aren’t there other sources of funding that might be suitable for consultants and clients? What options are available, and what is currently recommended? Paul Liese discusses this with law firm strategist Daniel Terwersche and funding consultant Alexander Thiem from foerderquelle.de.

 

Paul Liese: A very warm welcome to hsp TV! Today I’m joined by my two guests, Alexander Thiem and Daniel Terwersche. We’ll be discussing funding and the fact that, as of Tuesday, it has finally been clarified whether the BAFA’s Corona Crisis Programme still exists or not. It’s been discontinued. That doesn’t mean we’re all going to bury our heads in the sand now; instead, we’re moving forward with further opportunities made possible by the BAFA. That’s what I’d like to discuss today with Alexander and Daniel. Hello, you two! Would you like to introduce yourselves briefly for those who don’t know you yet?

Daniel Terwersche: Yes, of course. My name is Daniel Terwersche. I am the founder and managing director of Kanzleistratege GmbH. We help tax advisers to take the next steps towards digitalisation and innovation. We’re currently a team of 14 people and are doing all this via online coaching. This enables us to inspire relatively large communities – that is, many tax advisers – to join us on this journey, above all by helping them embrace change with positive energy, without fear and with a great deal of enthusiasm.

Paul Liese: Thank you very much. Alex?

Alexander Thiem: My name is Alexander Thiem. I work in the field of grant consultancy. I help companies to process grant applications, implement grant schemes and prepare documentation.

Paul Liese: Right, for all of you watching us now: you have the opportunity to ask your questions directly in the live chat. The chat is open, and we’ll be addressing the questions as this recording progresses. I’ll start by asking you the first question, Alex. We have quite a few law firms that, drawing on your expertise and using our software, have initiated the accreditation process with the BAFA. Now that these coronavirus-related funding programmes have been suspended, what will happen to these accreditation applications?

Alexander Thiem: First of all: the accreditation process has not been halted. The consultant is accredited. It’s just taking longer than it did two or three months ago, before the COVID-19 funding scheme attracted such a huge rush of applications. But the accreditation process itself has not been suspended. This means that applications are still being processed, and you will continue to have access to the BAFA consultancy funding scheme once accreditation has been granted.

Paul Liese: And just to make it clear once again: I don’t need to be on the list to be able to submit grant applications on behalf of my client, do I?

Alexander Thiem: That is correct. The directive stipulates that you do not need to be on the list to be able to submit applications. It is sufficient simply to state at the outset: „I am submitting an application on behalf of the client.“ Then, when the funding application is being processed, the BAFA must check whether authorisation has been granted. It is advisable to obtain authorisation beforehand, as this ensures the process proceeds step by step. However, depending on time constraints, it is also possible to submit applications on behalf of a client without authorisation.

Paul Liese: Let’s move straight on to the next question. I’m a consultant and have submitted a few applications to the BAFA, which have not yet been answered by the BAFA with a letter of intent to my client. What would you recommend to these law firms? How should they deal with this situation?

Alexander Thiem: Well, as far as the Covid-19 funding is concerned, and given that no provisional approval has yet been granted, the suspension of the Covid-19 funding will now likely mean that the application will be rejected – in other words, no provisional approval will be granted. In that case, I would tend to switch to the other scheme, provided the circumstances are right – namely, the scheme for businesses in difficulty or for established businesses. There are other categories that are also possible.

Paul Liese: Exactly. We’ll take a look at those in a moment. So does that mean I should just wait and see if I actually receive the rejection, or should I take the initiative and resubmit the applications, but via the BAFA’s other programme? What do you recommend?

Alexander Thiem: I would tend to favour the proactive approach. It would be better to say: „We approach the client; that way, we have the chance to shape the situation and say, “We have a company in difficulty. We can turn this into a 90 %. And we still have alternatives that we’re actively pursuing, rather than just letting the situation unfold and waiting to see what happens’.”.

Paul Liese: Law firms or consultants whose clients have been issued with a letter of intent – that’s the sort of document the client receives – can still carry out their project or provide their consultancy services, can’t they?

Alexander Thiem: Yes, if funding has been promised, it should also be paid out. I am not aware of any reason why this should not be the case. After all, a promise of funding means that the budget has been set aside in the pot.

Paul Liese: Right. So, we have a programme with three different strands. There’s the programme for start-ups, the one for established businesses, and the one for businesses in difficulty. What distinguishes these three programmes?

Alexander Thiem: Start-ups and established companies are mainly distinguished on the basis of their age. Start-ups are defined as being no more than two years old from the date of incorporation, whilst established companies are all those that are no longer within this two-year period – that is, from the third year following incorporation onwards. Companies in difficulty can be either start-ups or established companies. However, there are further criteria, such as the requirement that 50 % of the share capital must have been used up, and one or two other points to bear in mind for limited companies and partnerships. But essentially, these three categories exist alongside the Covid-19 support scheme.

Paul Liese: So, the way it stands, if I were to take over the company in difficulty, for example, the share capital would be used up, but I’d also have to have a discussion with the control centre, wouldn’t I?

Alexander Thiem: That’s correct. The application process differs slightly from that for the Covid-19 funding scheme. For start-ups and businesses in difficulty, we have the regional partner consultation before the actual application. You can see that in the application form as well. There’s a field that says „Information meeting took place on …“, where a date must be entered, and that implies, of course, that it took place in the past. This means that the client must ensure that the information meeting has taken place before submitting the application.

Paul Liese: So does that also mean for users of our software that, if I want to apply for the 90 % grant and use this programme, I can only submit the application once I have had a discussion with the regional partner, the coordination centre?

Alexander Thiem: Correct.

Paul Liese: How does it work? Do I choose the nearest regional partner from my control centre, send them an email, or give them a call? What exactly do I need to do to have this conversation? And what does this conversation involve?

Alexander Thiem: In principle, we have assigned regional partners to the respective control centres, but it is also possible to choose a regional partner regardless of which control centre they are affiliated with. This means that you can also choose a regional partner from a control centre other than the one you specified in your application for business development funding, such as the BBG control centre. Contact with the regional partner is usually made by telephone or email. This involves outlining the reason for the consultation – typically the extract from the commercial register or the business registration – and suggesting a date and time for the meeting with the regional partner.

Paul Liese: And does this conversation take place over the phone? Online? In person?

Alexander Thiem: Given the current coronavirus situation, I would strongly suspect that many regional partners will now be doing this over the phone. As there are hundreds of regional partners and they are all listed, I cannot speak for all of them as to how they are handling this. However, doing it over the phone is definitely sufficient.

Paul Liese: Right. And what does the client receive following this meeting?

Alexander Thiem: This is the most important document to come out of this meeting: the confirmation of the specialist consultation. This confirmation is important because it must subsequently be submitted for documentation purposes. And at the very latest, if you’ve stated in the application that „the regional partner meeting took place on …“, even though it hasn’t actually happened yet, this will become apparent in the documentation.

Paul Liese: And do I then have to provide this document to the BAFA later on?

Alexander Thiem: Yes, during the upload, exactly.

Paul Liese: Right. Does this apply only to companies in difficulty, or does it also apply to start-ups that have been on the market for no longer than two years?

Alexander Thiem: These are precisely the two categories that require an information meeting with the regional partner before the application is submitted. For existing businesses, it is optional.

Regarding the prospect of

Paul Liese: That means that if I want to act quickly on behalf of my client without any further hurdles, I select existing companies and am then eligible for the 50 % grant in the old federal states and 80 % in the new federal states, if I’ve understood correctly. How quickly will I then receive the preliminary approval?

Alexander Thiem: Normally, this takes one to four working days. I spoke to the control centre on the phone earlier today – that was the ZDH. And they said that they’re currently well on schedule, that applications are being processed as normal, and that the coronavirus-related hold has nothing to do with the other categories we’ve just discussed – start-ups, companies in difficulty and established businesses.

Paul Liese: Right, that means the following – I’d like to bring Daniel in on this: If I’m working as a law firm – I’m a consultant – and I’ve submitted applications on behalf of my clients who want to use my consultancy services, and I’m no longer able to claim the €4,000.00 for Covid-19 because I haven’t received a letter of commitment either. What would you now recommend law firms do?

Daniel Terwersche: Well, the first thing I’d recommend is to take a deep breath and assess for yourself what situation you’re currently in. Because I’ve noticed a sense of panic or a rush to act in some cases, perhaps because you may have promised or assured the client that they could very easily submit an application – one that requires no effort on their part and where the advice is provided automatically – and that they wouldn’t even receive a proper invoice or have to transfer any money. It may well be that this impression is now widespread amongst many clients. We do have tax advisers who have submitted 30 or 40 applications – you know this even better than I do, given the software solution. There’s been a very strong focus on this over the last few weeks. But I think we all agree that we weren’t all completely taken by surprise the day before yesterday when something suddenly happened – there had already been some warning signs. And sometimes something like this can also be an opportunity. Because we’ve now realised that many consultants have been looking into the topic of grant management through software-based solutions such as Opti.Tax or ka ching and have taken the matter on board. And as for what I’d do now, here’s a little anecdote: we’re currently offering the training course to become an innovation consultant. We held the first session with the first cohort on Tuesday – due to the high demand, we’re now running two cohorts, and the second one started today. On Tuesday, the BAFA announced at 12:00 that this funding was no longer available, and the first session with the class was at 14:00. And the first thing I said to them was: „Lads and lasses, first things first: the very reason you’re all here no longer exists. The Covid-19 funding was cancelled just an hour ago. It’s no longer available. There are now these and those options.“ And the great thing about the reactions from everyone who was there was that they said: „I’m not just here to pocket the €4,000.00; I’m here because I want to pass on the funding for consultancy services – and, above all, for innovation consultancy.“„ I was really impressed by the whole situation because they said: “Well, that’s just the way it is. These are external circumstances. Unfortunately, we can’t influence them.„ Even those who’d put a lot of energy into automating the processes so that even a small practice owner could see the effort involved in relation to the outcome. That’s now been done. And now is simply the time to say: “Right, we need to take a quick step back. We need to take a moment to get our thoughts in order and build a line of argument for the client. The approach we wanted to take isn’t working like this. But I still have some very good alternative ways of going about it.„ And that’s why I see this as entirely positive. You could even say that all the charlatans and those who simply wanted to pocket the money now face these two additional barriers – having to seek advice over the phone, and the client having to invest the money first, only to be reimbursed later. This, in turn, builds a great deal of trust in the funding agency. It enables the advisers to offer truly sound and sustainable funding advice. It’s now very much a strategic matter. This BAFA funding scheme has been in place for several years. And whilst we can’t, of course, say how many more years it will remain in place, a great many people – including a great many advisers – have now come to terms with the need to make use of sound, sustainable funding advice, step by step. Many used to say: “That’s far too much effort for me. I’m not going to go through all that just for one or two applications. There must be another way.’ But now we can all do it. The three of us make a brilliant team in many respects: on the one hand, we have the expertise on the subject, access to funding and the relevant authorities; then there are the software-based solutions; and finally, there are a great many tax advisers who are now sharing information. They’re asking which funding applications you’ve already submitted and what you’ve already done. And so, what was normally impossible for small firms is suddenly possible. The door was open, but it’s now closed a little again. However, we now have other ways to move forward. A 90% grant – and there’s still the initial consultation and the follow-up consultation, which can also be repeated – is a brilliant solution for the client too. Communication has, of course, been adapted slightly, but it’s essentially a brilliant path we’re currently following. Not that I’m just here to applaud it. Naturally, we didn’t exactly cheer when the funding was suddenly withdrawn either.

Paul Liese: I’ve got two questions here in the chat. The first question is for you, Alex: „When is a sole trader in difficulty? After all, there can’t be any equity capital depleted in this case.“ I’d like to add to that question: Does the business have to be in difficulty already, or is it sufficient for the adviser to assess and justify that the business will get into difficulty unless it takes action now and, if necessary, seeks the adviser’s advice?

Alexander Thiem: It is likely that the business will only run into difficulties at a later stage. It is not necessarily the case that, by definition, it will run into difficulties in one, three or four months’ time. However, if the consultancy ensures that the business’s viability is restored, then everything is still in order for the consultancy grant. Even if it does not currently meet the criterion that these 50 % of equity capital have been exhausted. It is slightly different for partnerships, that is true. This is also explicitly mentioned again by the BAFA. Here, the term ‘own funds’ is used. And ‘own funds’ are not defined quite as clearly in the guidance note as ‘share capital’. Own funds comprise everything the business has at its disposal, which it could convert into cash or which is simply held in its bank account. I would include that in the calculation.

Paul Liese: We’ve got a second question here regarding other funding opportunities. We’ll get round to that in a moment. I’d like to wrap up the topic of BAFA funding opportunities. I can carry out an initial consultation and a follow-up consultation. How does that work, Alex? What’s the typical process for advising a client on two different issues and thus securing two grants?

Alexander Thiem: Typically, it all starts with an information session. Then we receive the confirmation. The confirmation is valid for three months, during which time the application must be submitted. Then we have the initial consultation – that is, for companies in difficulty; in the application, this is referred to as ‘business continuity advice’. We provide the consultancy, finalise the process and submit the documentation. And now the situation is that we’ve carried out the consultancy and addressed many aspects, but several aspects haven’t yet been covered in sufficient depth. That’s what the follow-up consultation is for – to pick out precisely these aspects again, provide advice on them, and thereby make full use of the two instalments of €3,000.00 for the consultancy fees.

Paul Liese: And once the company has overcome its difficulties, would I be able to claim the funding as a normal, established business? Or not?

Alexander Thiem: Of course, that’s possible too. You could start by submitting an application as an established business, then realise during the consultation that it is actually a business in difficulty, and then amend the consultation report to classify it as a business in difficulty, thereby qualifying for 90 %.

Paul Liese: We have now received another supplementary question on the subject of sole traders: „Are private funds considered equity capital?“

Alexander Thiem: So, regarding partnerships in general and sole traders in particular, I would ask that we organise a separate meeting on this topic, as the control centres are also proving rather reluctant to provide information. The application must state the amount of the loss and the level of operating capital or equity capital, i.e. own funds. And this must be done to the best of one’s knowledge and belief. I would refer you once again to the information sheet. It contains some helpful details on how the calculation is arrived at.

Paul Liese: If we relate this once again to the coronavirus situation, I might have the results as at 31 December 2019, and now, sitting here in May or early June, I find myself in a situation where the figures that were still fine back in December are no longer acceptable. All I can really do is point out that they were still good last year and that we had our own funds available, but that these have now been used up, and that is why I am a business in difficulty and need support.

Alexander Thiem: Exactly, the current figures are more important than last year’s. Here, greater emphasis is placed on the timeliness of the figures. The BWA can also serve this purpose.

Paul Liese: Right. And that’s also something you’d then discuss with the control centre’s regional liaison officer.

Alexander Thiem: Please do not rely on the regional contacts to verify this. It is more the consultant’s responsibility to draw up these figures or financial projections and to demonstrate to the BAFA that the company is, or will be, in difficulty.

Eligibility

Paul Liese: That’s an interesting point. In terms of consultancy services, what is actually still eligible for funding under the BAFA programmes?

Alexander Thiem: Essentially, everything that was already eligible for funding under the coronavirus support scheme.

Paul Liese: So, if I now tell my client that I will still be providing liquidity advice, follow-up support or whatever else I need to ensure that my business can survive over the coming months following emergency aid payments and the like, then that is also eligible for funding as a consultancy service.

Alexander Thiem: So, as far as consultancy services are concerned, there have been no restrictions on what would be eligible for funding.

Paul Liese: That’s a very important point. The same topics as before remain eligible for funding through the BAFA programmes, and ultimately it’s the consultancy report that counts. I’ll switch over to the software briefly and share my screen. What exactly does this mean in terms of the process? In the project management section, I currently have two projects here. One project is „in preparation“, the other is „in progress“. We’ll focus on the one „in preparation“ for now. If you’ve submitted applications to the BAFA via Opti.Tax that were intended for Covid-19 support, and all the projects are currently listed as ‘in preparation’, this means we’re waiting for the UBF number, which we’ll need to submit all the information to the BAFA later on. To change this now, it is important that the latest version of our software is installed. This is version 20.14, and in a few hours’ time version 20.15 will also be available, which we will then make available online. You will then be able to right-click on the project, change the status and reset it to ‘Preparation for BAFA funding application’. A prompt will then appear asking whether you really want to make this change, which you confirm by clicking ‘OK’. When you reopen the project, in the bottom-left corner under ‘Consultancy Funding’, you’ll have the option to select ‘No’ under ‘Corona’ in the additional company details – this is very important – which will make a further field available. In this field, you must now enter what we have just discussed. This is either general consultancy or specialist consultancy. And under ‘Type of business’, I can specify whether I wish to submit the application for an established business, a start-up or a business in difficulty. And once I’ve completed these four steps, I can apply for BAFA funding in the top-left corner; the form will then open – it’s already pre-filled – and I can submit the application. Alex, what’s the difference between general and specialised consultancy?

Alexander Thiem: General consultancy covers a very broad range of topics. Our information sheet on „Types and Topics of Consultancy“ lists economic, financial, personnel and organisational issues. These are further sub-headings explaining exactly what is meant by each. However, even this list is not exhaustive. More important than these topics themselves is the concept of ‘conceptual consultancy’, which must also be reflected in the consultancy report. Here, we will draw on the framework of weaknesses/causes of weaknesses/recommended measures, which must also be adhered to in the case of specialist consultancy. A specialised consultancy is aimed at specific groups of people or specific topics, such as securing a skilled workforce or environmental protection, as well as others listed in this information sheet on ‘Types and Topics of Consultancy’ under the section on specialised consultancy.

Paul Liese: Once the application has been submitted and the provisional approval has been granted, the project can be opened. The UBF number is then requested. In the latest release, we have a new button – the „Quality Control“ button. This button does the following: the consultancy report that you, as a user, have written using the software is submitted to us as a PDF document. Alex and we review this and then provide feedback on what could be improved. In this way, we aim to offer a little more reassurance regarding applications that may now need to be resubmitted, and for practice owners who may be feeling somewhat uncertain. We’d like to offer support here by reviewing the consultancy reports and providing feedback on what might need to be added, so as to bring greater certainty to the process within the law firm or company. Then there’s another new feature I’d like to show you: Here, under the ‘Project’ section, we have the option to implement recommendations for action. The topic of recommendations for action is precisely what you, Alex, were just referring to when you spoke of the ‘conceptual’ aspect. Why are these recommendations for action so important?

Alexander Thiem: The BAFA can only decide, on the basis of the consultancy report, whether or not the grant will subsequently be approved. Of course, the other documents are also necessary, but the consultancy report is the most important element within the consultancy funding scheme and within the documentation. Recommendations for action are the most crucial part of the conceptual consultancy framework, because it is only through these recommendations that it is ensured that the client can achieve long-term improvements as a result of the consultancy.

Paul Liese: Right. We received a question in the YouTube chat a little while ago on the subject of process documentation, funding and perhaps other programmes, such as go-digital and others. Perhaps we could break the question down: I draw up procedural documentation, then, whilst carrying out an assessment of the current state of the processes and circumstances within the client’s company, I identify what needs improving, I then draw up the recommendations for action, which are included in my consultancy report, and that brings the process full circle, meaning that the preparation of the procedural documentation would, in principle, be eligible for funding. Or is that not the case?

Alexander Thiem: Basically, yes.

Paul Liese: Right, that’s one point. The other question we were asked there is: there are other support schemes that might also be worth recommending, which could be used to help clients in their current situation. Is there anything you’d like to recommend?

Alexander Thiem: It depends on the subject area. In my view, the consultancy funding scheme as such, provided by the BAFA at a rate of 90 % – if it’s purely about consultancy – would be the go-to solution. If the focus is more on digitalisation and the client isn’t facing immediate difficulties – but perhaps still has some breathing space and would like to invest a little more in the digitalisation of processes because they’ve realised that an analogue-only approach won’t work – then perhaps ‘Go-Digital’ would be the way to go. But that’s difficult to say at the moment.

Paul Liese: Then there’s one more point that you, Daniel, touched on earlier. What happens next? I think the tricky part is that, as a consultant, once I’ve convinced my client that I want to support them and help them develop new concepts, provide liquidity advice and the like, to then go to them and say, „I’m sorry, but the €4,000.00 grant is off the table,“ and to now present the current situation in a positive light. We’d already discussed this yesterday. Tomorrow we’ll be sending a newsletter to all our clients, which will include a sample letter worded appropriately to explain the situation whilst still emphasising the positive aspect: that support is still available, that grants are still possible, and that only the framework conditions have changed slightly. From your point of view, what specific advice would you give the consultant right now on what to do next, for example in conjunction with a letter like this and so on?

Daniel Terwersche: I’d recommend waiting for the letter first. Our clients will, of course, receive this letter as well. We can then discuss it again during our live calls to see how it fits in and what happens next. This topic naturally comes up in all our sales calls as well – how to anticipate objections or excuses. I’d wait for the cover letter to arrive first. As we’ve discussed, it contains some good ideas. Then I’d seek a further discussion with the client to explain to them, in a well-founded, step-by-step manner, what the current situation is and how things stand. And certainly also explain once again that this came about due to a great many external factors – the fact is that many advisers take this personally, viewing it as a kind of failure, even though no reputable tax adviser had any influence over it – and that there were so many fraudulent claims and the system was inundated with applications that were not at all justified, and that there is now a sound process in place that only reputable people can follow. And then briefly outline, step by step, how the process works, so that the client doesn’t get the impression that this is just another fad or the latest craze sweeping through town, but that this was already standard practice even before the pandemic and can now be utilised in the same way.

Receiving funding twice

Paul Liese: Alex, the question just came up in the chat about how double funding works for a client. Let me summarise it in my own words. I have a client for whom I’m submitting the funding application, I carry out the initial consultation, which then relates to the €3,000.00 for established businesses, for example; I receive €1,500.00 of this as a grant – or rather, the client receives it, as the process has changed slightly, and during the initial consultation, I identify that there are further issues and key areas within the client’s business that need to be addressed, discussed and optimised; then, after submitting the first set of documents to claim the grant, I submit the application for the follow-up consultation. Is that correct?

Alexander Thiem: Yes, we really do need to distinguish between start-ups, established businesses and companies in difficulty, because these are three separate categories. And in the case of a company in difficulty or one that is likely to face difficulties, we have this initial and follow-up consultation – as detailed in the ‘Payment/Proof of Payment’ guidance note, which explains what ‘business security’ entails – which we now refer to as an ‘initial consultation’ as this better reflects its nature. The follow-up consultation then generally builds on the initial consultation. So, if there is a significant time gap between these two phases, you must be able to justify it.

Paul Liese: So this only applies to the ‘Companies in Difficulty’ scheme. Not the ‘Existing Companies’ scheme.

Alexander Thiem: You can still carry on with the Existing Businesses scheme as normal. Even if the client is no longer in the phase where the business is considered to be in difficulty – that is, once the application has been submitted and the consultancy has been completed – you can still make full use of the consultancy services available under the Existing Businesses scheme.

Paul Liese: That means I can use each topic (existing companies, companies in difficulty) once per company.

Alexander Thiem: Existing businesses can be used twice; once for general advice and once for specialist advice, with a consultancy fee of €3,000.00 on each occasion, which is either subsidised or recognised. For start-ups, the fee is 4,000.00 € on two occasions, again for general and specific topics. And for companies in difficulty, 3,000.00 € for the initial consultation and then 3,000.00 € for the follow-up consultation.

Paul Liese: So I do have a sufficient amount of work to help my client.

Alexander Thiem: Correct.

Paul Liese: Right. Is there anything else either of you would like to share with our viewers?

Daniel Terwersche: For my part, I’d like to ask Alex another question. This phrase „expected to face difficulties“ is, after all, such a vague term that one then has to explain. I’d like to illustrate this with an example. If, for example, someone runs a trades business which, of course, still has plenty of work at the moment because those contracts were already in place before the pandemic – after all, people don’t suddenly stop building or renovating their homes – then, on the one hand, they cannot yet demonstrate a loss of share capital, but, of course, they now have real fears about what the future holds and how the orders will pan out. Our economy is a bit like a flywheel. The effects tend to creep in gradually over time, particularly with long-term contracts like these. How robust and sustainable do the figures need to be in order to demonstrate that the business is likely to face difficulties? Can I submit the applications I would normally have made for the coronavirus scheme in this way for businesses in difficulty for the time being?

Alexander Thiem: I’d say, to a certain extent. It must be immediately foreseeable – that is, within the next six months – because the consultancy itself is only permitted to last six months. Within this period, the projected figures in the consultancy report should plausibly demonstrate that the company is likely to run into difficulties.

Daniel Terwersche: Right, but I can back that up with projected figures.

Alexander Thiem: Yes, exactly. That’s the intention behind the target figures.

Daniel Terwersche: Even if everything does eventually get back on track, there’ll be no proof of this, and the BAFA won’t then say: „Hold on a moment, please redo the 2020 business assessment retrospectively.“

Alexander Thiem: Well, if the consultancy has been subsidised and the company doesn’t end up in difficulty within three months as predicted, then everyone is happy. The BAFA is happy about that too. The grant remains unaffected. It would be a problem if someone were to say that they’d be bankrupt in three months’ time anyway, but would still like to receive the €2,700.00 as a grant. That wouldn’t be allowed.

Daniel Terwersche: So if I’m a restaurant owner and I’ve been closed for four months and things are looking really bleak, it’s certainly difficult.

Alexander Thiem: Even if things look really bleak, that’s not a problem. The only thing a consultant mustn’t say in the consultancy report is that the company is going down the drain anyway. Instead, it should be more along the lines of: „We need to make recommendations for action, we need to advise, and we must still try to bring about an improvement.“

Daniel Terwersche: I’d just like to add a brief comment on that, because whilst we’re not so much involved in financial planning and cash flow management – though our clients and tax advisers certainly are – our main focus, where we also coach tax advisers, is in the area of innovation and digital consultancy. There are, of course, some great opportunities there via the BAFA funding schemes, such as ‘go-digital’, although the accreditation process for this takes a bit longer. It shouldn’t be the companies that absolutely need this to survive, but rather those that want to reposition themselves strategically and explore new business areas and innovative approaches. For them, ‘go-digital’ is extremely interesting. There are also tax practice firms that are accredited under this scheme. Apart from that, there are also region-specific funding schemes that are very interesting, particularly when it comes to digitalisation and innovation. Here, too, I can only encourage every tax adviser to look into this field. If not now, then when? Right now, clients need not only security but also a positive outlook. And this is precisely the time for change. For example, we’ve integrated an entire process into the hsp solution that includes a complete 5P innovation mix. This means that even advisors who might otherwise have been hesitant to offer advice on innovation are encouraged by the breadth of expertise to do just that. That’s a call to action, isn’t it, Paul?

Paul Liese: Yes.

Daniel Terwersche: Yes, thank you very much from me.

Funding as a strategic element

Paul Liese: Thank you, Daniel. Alex, do you have anything else to say to the viewers?

Alexander Thiem: No, I don’t think so. Everything has already been said. It’s just that funding is particularly important in times of crisis. The coronavirus pandemic has now shown that funding should be viewed as a strategic tool, not just used as a short-term measure. After all, the next crisis following the coronavirus is bound to happen at some point.

Paul Liese: Yes. I can’t help but smile. I’ve just been told by the director that I absolutely must have a drink to present our new webcam edition. Because if I drink now, you’ll be able to see the product name at the bottom of the mug.

Daniel Terwersche: We really ought to borrow your marketing department for a while.

Paul Liese: We’ve just received another question: „Do tax advisers need to provide evidence of a proportion of their turnover generated from consultancy services for the go-digital programme?“ Alex, could you say a few words about how to become accredited with go-digital?

Alexander Thiem: Yes. You must have generated a net turnover of at least €55,000.00 in the last year in order to be eligible for authorisation by go-digtial in the first place.

Paul Liese: €55,000.00 net consultancy turnover?

Alexander Thiem: Total turnover.

Paul Liese: So, whether I’ve been preparing annual accounts or doing bookkeeping, does that all count towards it?

Alexander Thiem: Euronorm, the project sponsor for go-digital which decides on authorisation, does not distinguish in great detail as to how the turnover was generated. What is important, however, is the actual technical expertise and the ability to provide references.

Paul Liese: How do I demonstrate this if I haven’t yet carried out any projects in this field?

Alexander Thiem: Not at all. You have to secure projects. Unfortunately, it’s not possible without references.

Paul Liese: In other words, the first projects I undertake, I do for myself; I then write a project report together with the client with whom I carried out the project, which I subsequently submit as evidence – naming the client – when applying for the programme.

Alexander Thiem: The references, or the templates for them, are already included in the authorisation application. It’s been made very user-friendly. You simply click on a plus sign and the next template for the references appears. You then enter the client’s details there. And then you need to describe, in terms of content, what was done and what the outcome was. And this must then be linked to the actual requirements for the expertise relating to the module for which you are seeking authorisation. Digital business processes, I presume.

Paul Liese: So if I were to have two consultancy projects funded by the BAFA now, could I already use them as references for go-digital?

Alexander Thiem: No, that’s not possible. When it comes to go-digital, it’s important to distinguish once again between BAFA and go-digital. BAFA is only interested in consultancy; they do not wish to fund implementation as well. go-digital, on the other hand, requires both consultancy and implementation, including in the reference projects – at least three of them.

Paul Liese: But that would mean that I would have a completed project if I had a client who hadn’t yet digitised their operations, and if, during the consultancy, I established that digitisation would improve their company’s performance, and I then implemented a document management system for them as a result of the recommended course of action.

Alexander Thiem: So, basically: BAFA is very keen to have the project funded.

Paul Liese: That’s right, but that may well be the conclusion I reached in the consultancy report.

Alexander Thiem: The fact that the DMS is to be introduced is not a problem. But the most appealing solution would be for the DMS to be implemented by a proper IT service provider or another company. Because if we were to implement it ourselves, we’d end up relying on BAFA again for consultancy and implementation. But BAFA really only wants the consultancy.

Paul Liese: I’ve heard from you that it takes a long time if I want to register with go-digital or get accredited. Is that right?

Alexander Thiem: Easily three months, yes. It depends on which case officer you’re assigned to. It also helps to check in after eight to ten weeks to see what stage the application has reached. It’s essential to keep an eye on when the authorisation application is received, as you’ll get a confirmation email then. The authorisation process is more closely monitored than with the BAFA. With the BAFA, it’s a hands-off procedure. You can log in every now and then to check the status, but you don’t receive any proactive updates. With go-digital, it’s different.

Paul Liese: Another question has just come in via the chat: „I’ve heard that accreditation for go-digital has been suspended. Is that true?“

Alexander Thiem: Not that I’m aware of.

Paul Liese: I think that was the case at times last year, and that’s what was communicated. But as far as I’m aware, it hasn’t stopped.

Daniel Terwersche: Well, I had a look into that again yesterday. We’re getting accredited, after all, because we want to incorporate this into our coaching. It would be new to me as well. As far as I’m aware, that wasn’t the case until yesterday.

Paul Liese: Right. We’ve got another question here in the chat: „Would the digitisation of bookkeeping and/or procedural documentation qualify as projects for accreditation?“ In other words, for accreditation under the go-digital scheme.

Alexander Thiem: When it comes to digitising accounting, it is again important to recognise that this project requires consultancy and implementation support. And regarding ‘go-digital’: because of this funding cap of €3,000.00, we also have projects that have not necessarily lasted just four, eight or ten hours, but have in fact taken at least several days.

Digitalisation as the key

Paul Liese: Well, the digitisation of the accounts – including implementation, the procurement of scanners, software and the like – would be a project for go-digital. Drawing up the procedural documentation, on the other hand, probably wouldn’t, as that’s just consultancy, not implementation.

Alexander Thiem: I wouldn’t necessarily call that ‘process documentation’ just yet. We need to pay attention to the terms that the European standard actually specifies. And that is precisely the digitalisation of internal business processes. Process documentation can form part of the consultancy – analytical consultancy and, building on that, the advisory phase; that would constitute a well-rounded ‘Go Digital’ project. In this context, I’d say: process documentation involves a sequential analysis of the processes, followed by defining recommendations for action, measures, competitors and so on – in other words, which systems can be used – and then implementing them. That would make for a well-rounded approach. That would be brilliant.

Paul Liese: Right, apart from that, you and we will of course be happy to answer any detailed questions afterwards.

Daniel Terwersche: I’d like to take a moment to put in a quick plug for Alex. On foerderquelle.de, there’s also a complete ‘go-digital’ accreditation process with videos available in the shop for, I believe, €299.00. We’ve used it ourselves. Anyone who invests in this will get detailed information on exactly how everything works. And if you really want to take a strategic approach in this area, it’s certainly money well spent, as it helps you understand the finer details even better.

Alexander Thiem: Otherwise, I am of course available personally to answer any such enquiries.

Paul Liese: That’s great. Well then, thank you very much for your time. As I said, the three of us – Daniel, Alex and I – are available to answer any further questions. Just drop us a quick message or give us a call, and we’ll be happy to answer them. As I mentioned, the newsletter will be sent out tomorrow to all our customers and everyone who works with us. We’ll include a few more pointers and the cover letter we mentioned. And, as I said, Release 20.15 will be going live; please make sure you install it so you can resubmit applications for the other programmes to the BAFA. On that note: stay positive! Every situation presents an opportunity. With that in mind, let’s get on with it and not let ourselves be held back by what others may have ruined.