PwC and EY rein in consulting services
Interesting(ish) Big Four developments today...
According to the Financial Times, PwC and EY have told MPs that they are going to stop providing "non-essential consulting services" to audit clients by 2020.
Kevin Ellis, chairman of PwC UK, and EY's Steve Varley say audit quality is unlikely to improve as a result. But the move is more an effort to improve public trust in the sector.
"Big Four" firm KPMG last year led the way in this area when it stopped offering a variety of consulting services to audit clients.
Accounting scandals
That, of course, followed a spate high profile accounting scandals, such as Carillion. It's a long list.
Many observers and investors think these big auditing outfits are too close to the companies they are there to monitor.
And that there is an obvious conflict of interest because the firms can earn more fees by offering consultancy services to the same clients.
David Sproul, head of Deloitte, told the FT that his firm had not yet implemented a similar policy although he supported it.
“We don’t think it will directly impact audit quality. It will increase trust in the profession,” he said.
Five steps to put accountants ahead of the MTD curve
With such massive changes, as Making Tax Digital brings, it’s easy to focus on the difficulties that lie ahead.
But, in fact, the reforms offer a brilliant opportunity for accountants to re-evaluate their practice and set it on the path to greater prosperity.
It’s the ideal time to pause, review and reflect on how the practice can be more efficient and effective.
Company's mission
Approaching MTD from this perspective, IRIS has created a five step programme to make a success of complying with the new rules, in line with the company’s mission to make accountants’ lives simpler, more effective and more productive.
IRIS’ digital experts have broken down the essential components of MTD and assembled these into an insightful guide that can be followed through a series of articles, webinars and a whitepaper.
The programme is aimed at placing accountants in pole position to take advantage of MTD.
The steps are:
- Profiling your clients
- Profiling your practice
- Selecting technology
- Enabling the practice
- Ongoing obligations
Once accountants have been through the five steps, they will have laid solid foundations for making a success of MTD compliance.
As alluded to above, at the centre of the five steps, is reassessing and re-evaluating the practice, then re-shaping it to be more effective and profitable.
That’s why steps one and two are about profiling – for clients and the practice. It means accountants gain a deeper understanding of how to streamline their client base and see how they can optimise profits. By undertaking these steps, firms can discover what might be possible for the future.
New system
Carrying out this review may, for example, point towards a new system of charging a premium for clients who are primarily paper-based, because they clearly require the most amount of work. Perhaps some clients would be happy to adopt online bookkeeping if they realised how straight forward it is.
Understanding the client base, accountants can then appreciate how much time and effort is required. They’ll see more clearly what types of clients they have and how many fit into each category.
The programme poses a number of vital questions that accountants must answer themselves.
These include:
- Who is making the first submissions to HMRC in April and how?
- Is the firm planning to use a bookkeeping solution, receipt digitisation, bridging software or a combination?
- Are disparate systems being used to record VAT submissions?
Following the IRIS five step programme will soon make MTD much clearer and less daunting. Discover more here.
AccountsIQ keeps spot in Fast 50 rankings
AccountsIQ, the Cloud based financial management software company, ranked 21 in the 2018 Deloitte Technology Fast 50, a the 50 fastest growing technology companies in Ireland.
Rankings are based on average percentage revenue growth over four years and AccountsIQ have now ranked in the Fast 50 for the fourth consecutive year.
AccountsIQ’s CEO, Tony Connolly, credits the company’s growth to continual focus on product innovation. “We are thrilled that AccountsIQ have ranked for the fourth year running, as one of the fastest growing technology companies in Ireland.
"This tops off a fantastic year for AccountsIQ having recently been awarded the UK's Enterprise Accounting Software of the Year 2018. We have added a lot of new customers, and we are on course to achieve 45 per cent revenue growth in 2018.”
Tony says: “AccountsIQ have a strong commitment to product innovation and also to listening to our customers, getting their collaboration and feedback in making AccountsIQ the great product it is. There has been huge uptake of cloud solutions in the last few years and we are very thankful so many companies are seeing the advantage of cloud and adopting our platform.”
Connolly continues, “We are in such good company in the Fast 50, with dynamic growing companies like Spearline Labs, SilverCloud Health and XSellco who took the top spot this year, all using AccountsIQ. These high-growth tech companies are great examples of the sort of clients adopting AccountsIQ, who need the functionality, sophistication and scalability to handle the rapid growth they are experiencing. AccountsIQ has always enjoyed a unique position in the technology sector as being a great fit for fast-growing businesses, particularly as they expand internationally."
“We plan to capitalise on the trend towards cloud solutions and have significant growth plans for 2019. We are investing in expanding our team in all areas. We feel passionately that delighting customers helps underpin growth and therefore customer success is a key focus of this investment. Our recent accolade of being awarded the UK's Enterprise Accounting Software of the Year 2018, beating big brands like Sage, SAP and Exact, was mainly due to user voting, so customer satisfaction is core to our values and will continue to be a central theme as we grow”.
Details of the final Technology Fast 50 ranking list are available to download here.
Beware the big changes ahead for payslips
Big changes are happening to payslips in 2019 - are you ready for them?
It’s time to look ahead at what 2019 has in store for us. Personally, I’m excited for new episodes of Homes Under The Hammer, the Royal Baby and maybe a weekend away in Scarborough. But amid all this excitement there is another huge event looming on the horizon that is going to change the face of payroll for ever. *cue dramatic music*
Yes folks, from April 2019 if you have paid employees then your world is about to be flipped upside down, never to be the same again. OK that was a bit dramatic (I think it was the music) - but this is a big deal. Basically under the new system employers will have to deliver itemised payslips to every worker on their payroll, not just those classified as “employees”. This means all workers, including zero hour and casual workers, must be issued with written, printed or electronic payslips. YUP! You heard right, AND the employer must either:
- itemise the figures for different types of work worked and for different rates of pay
or
- show the combined number of hours worked for which payment is being made.
I can imagine half of you are white as a sheet at this point. Jeepers, it feels like this year couldn’t get any wooooorse! (*turns off music* - sorry, last time). At first glance, yes, this payroll change can seem daunting. It could be a huge undertaking for a large proportion of businesses if you use HMRC’s Basic PAYE tools or if your payroll does not offer a payslip facility. But if you act ASAP you can ensure that you’re ready by the deadline. No, put your pyjamas back on Greg, I didn’t mean like, right now. It’s more about ensuring that there is a smooth transition. How do you do this? Well you’ve come to the right place!
First of all, make sure you have a meeting with your HR team (even if this just consists of Laura who brings her pet Yorkie to work and gives really good hugs). As long as your employees have the right information regarding these changes and that whoever is responsible for the payroll process knows how to implement them then you’re halfway there. But most importantly, your payroll processes should be revised so that this new information will appear as it should on the payslip itself. This includes:
- earnings before and after any deductions
- the amount of any deductions that might change per pay period such as NI contributions
- an explanation of any fixed amount deductions
- and finally - everyone’s favourite part - the net wages to be paid.
I can imagine the half of you that didn’t turn white as a sheet earlier have now caught up. But don’t worry your pretty little heads - as long as you're using a dedicated payroll software you can rest easy. Payroll software such as BrightPay will have already prepared for these changes and have built in functionality to process these amendments according to each individual payslip.
Guys, I know it seems like a huge pain but at the end of the day this is a huge victory for employees who will be able to understand their pay better and also dispute missed payments with greater ease.
Liberté, égalité, employeé.
The end of HMRC’s basic PAYE tool?
Picture the scene: Your teacher tells you that from now on, at the end of every class, you have to do a really hard maths equation. In fact, you have to do a maths equation for every student in the class. If you don’t do these correctly then she’s going to take your pocket money and tell your parents. To help you do the equations she hands you a pencil. Not even a calculator – a pencil.
Welcome to HMRC Basic PAYE Tools (BPT) and auto-enrolment. If you hadn’t guessed, BPT is the pencil.
If you are an employer then you know about auto-enrolment and your employer obligations. Automatic enrolment has been rolled out over the past couple of years and now the setup process is over for employers. Nothing left to do. We can all go home.. HA! Yeah right! *Cue demonic laugh from the Pension Regulator*.
As an employer you must continue to make payments that are due into the scheme every time you run payroll.
Naturally, employers across the country are still fretting about this. Why? Because The Pension Regulator monitors the contributions that are paid by employers into workplace pensions and they can tell if incorrect payments are being made (or not being made at all) into your staff’s auto-enrolment scheme and they will take action if you fail to comply. It is a continuous obligation that needs to be carried out all the time.
Let’s talk about BPT for a second. It’s essentially a spreadsheet template that you type information into. Sure, you could use it to calculate contributions and the contributions rates for 2018 and onwards. You could also watch paint dry. Both would be equally as long and tedious.
The Pension Regulator do offer a very in-depth set of instructions on their website on how to use this spreadsheet. The problem is, the margin for human error is huge. (Even the Pension Regulator themselves advise employers to use payroll software for their auto-enrolment duties).
This, coupled with the fact that these contributions are constantly being monitored and that you will be fined if there are any problems is enough to make a grown man cry (we all saw you in the storeroom, Craig). You have to be really clever to get all these calculations right every time. But you know what else is clever? Getting a payroll software that basically automates this automatic enrolment process for you. Luckily the clever clogs at BrightPay are here to help.
BrightPay is not just the calculator (yes we’re still using this analogy) it’s a supercomputer, first in its class. It will automatically import your HMRC Basic PAYE Tools data and handle ALL the administrative auto enrolment tasks at no extra cost. It also includes the NEST API, The People’s Pension API, Smart Pension API and the Aviva API which means that the upload of auto-enrolment data is automated. Yes, AUTOMATED.
Another major advantage of BrightPay is that it generates payslips that clearly state pension contributions.
BrightPay basically does all the work for you every time you run payroll. Think of all the things you could do with those saved hours – you could read a book, take up a hobby or do what I do in my spare time and watch 12 consecutive episodes of Judge Judy whileeating pizza. The world is your oyster! Live your best life!
To make things even better BrightPay is just £229 + VAT for a bureau licence with unlimited employers AND employees (Support is included in this price – no you are not dreaming). To top it all off, BrightPay won the Payroll Software of the year award at this year’s Accounting Excellence Awards. For more information head to HERE.
AccountsIQ updates software platform
AccountsIQ, an award-winning supplier of accounting consolidation and business intelligence solutions, has announced a major product update to their software platform, as a result of feedback from their customers and the AccountsIQ community.
AccountsIQ recently won a ranking in Deloitte Technology Ireland’s Fast 50 for the fourth year running, recognising the company’s growth in turnover, and a reflection of the its commitment to innovation.
The General Ledger Journals functions in AccountsIQ have been redesigned to help create efficiencies and improve accuracy in month end processes, and to save the finance function time.
Typically, end of month accounting procedures can be cumbersome, repetitive and lengthy, especially journal adjustments or month end journal routines, often taking up valuable time and resource which could be better used elsewhere, and which might be prone to human error.
Gavin McGahey, AccountsIQ chief technology officer, says: “The new features will create significant time savings at month end. We are really pleased to add these new enhancements, as many have been requested by customers. The first part of this upgrade has been released globally and we’re looking forward to add even more time saving features over the next couple of months.”
Clients and payroll ... the worst game of tennis you’ve ever seen!
By Aoibheann Byrne
In my last blog post, I talked about BrightPay’s new Bureau Feature - Client Payroll Entry - and how much of a game-changer it is. But BrightPay are spoiling you rotten and trying to impress your parents because they not only have one, but two, new bureau, time savings and super awesome features. This second feature goes hand in hand with the Client Payroll Entry feature and is called Payroll Approval. No no, it’s not a BrightPay team member standing over your payroll books and saying “yes, very good”. It’s a way of ensuring the payroll information is 100 per cent accurate before the payroll is finalised. How?
Like payroll entry, the current system for getting payroll information from clients and approving payroll with the client is clunky and clumsy. After the bureau has done all the work they finalise the payroll and send a copy to the client for approval, essentially doing it blind as this is all based on the assumption that all the information provided in order to achieve the final result is correct. HA! So naive! There are almost always mistakes and these mistakes are only picked up by the client once they are sent the finalised payroll for approval.
So now the client has noticed that they forgot to tell you that Ricardo moved back home to Brazil last month and that actually, Tracy has her baby already so they tell you what changes need to be made either by email or over the phone but actually, Pierce was off sick for two days last week because he drank the gone off milk in the staff room fridge but the manager forgot to record it so they ring you again and so on and so on. It’s like the worst game of tennis you’ve ever seen; just back and forth and back and forth until everyone dies.
Even worse is if the client doesn’t pick up on a mistake and approves the payroll you’ve finalised and then only notices the week after and then they’re all up in your grill about it, pointing the finger. You’re pretty sure it’s their fault, because you’re an accountant and therefore perfect and immortal, but how do you prove it? Are you going to go through the years of email exchanges just to prove a point? (I mean, I would. But I am petty and have a lot of time of my hands). The answer is no, you couldn't be bothered. So you grit your teeth and correct the mistakes and go back and forth and back and forth and hope that North Korea finally let off a nuke and put you out of your misery.
Please welcome to the stage the new feature from BrightPay Connect - the Payroll Approval Facility! This feature allows payroll bureau users to securely send a payroll summary before the payroll is finalised. The onus is then on the client (yes the CLIENT) to review and authorise the payroll details through their online employer dashboard. Like payroll entry, this is all done through the BrightPay Connect portal which will eliminate the need for manual correction and endless emails. NOT ONLY THAT but the client is now accountable for ensuring the payroll information is 100 per cent correct before being finalised. Just because you’re an accountant, it doesn’t make you accountable (zing).
Oh and have I mentioned audit trails? Yaaaas girls and boys, audit trails of all payroll requests that have been approved by the client. It includes each step taken by your client and and includes payroll filed, approved and submitted, outstanding requests and files waiting to be approved, completed and even files ready to be downloaded to an employee file. So next time Brenda accuses you of making a mistake you can politely direct her to the audit trail section and then sass on out of there leaving her to eat your dust.
Regardless of accountability though, having clients conduct data checks and approval themselves will result in increased accuracy, reduced need to make edits after payroll has been finalised, resulting in time saved, greater productivity, improved client/bureau relationships and world peace.
Check out BrightPay.
Safety in numbers...accountancy firms lead the way
I work with CEOs, MDs and FDs across many different industries. A client engages my company, to review and transform their sales function and enable growth by implementing a sustainable sales system© that will mitigate risk and maximise profit.
The future and the economy are always top of the agenda and I think this presents a great opportunity for accountancy firms who want to differentiate and grow their business.
News articles are appearing daily about the rapidly changing business world and point to an uncertain future. My experience with business owners and entrepreneurs shows they are looking for structure and substance to enable growth and confidence.
Growth and expansion
Accountancy firms may choose to focus their efforts to work with clients who are looking for growth and expansion because these clients have the most need of business and financial advice.
Business growth and business confidence stimulate work for everyone. Business owners are far more likely to invest in premises, machinery, IP, staff etc if they believe growth is achievable and will give them a competitive advantage in their market.
The challenge for many accountancy firms, is the difficulty in showing a clear differential between themselves and the competition, when they both offer Bookkeeping, HR, Tax and Audit in their stable of products.
Business advisory
Rebranding the firm as a business advisory is not the answer. It’s important that any new products or services you add to your offering don’t detract from your bread and butter products or destabilise your client base.
Your firm may already offer growth advisory services as well as traditional accountancy products. The accountancy profession offers a solid foundation for the addition of specific growth advisory services. Your offering may already include advice on financial decisions, auditing accounts and providing trustworthy information about financial records.
You may also report on taxation, audit, undertake forensic accounting, manage corporate finance including business recovery and insolvency, reviewing accounting systems and processes.
Professional services
Whether your firm is interested in growing your audit business, or introducing additional business growth and financial advisory services, accountants are perfectly positioned to differentiate from other professional service offerings.
Accountancy qualifications, training and experience are great assets, giving your services credibility and integrity. Whichever strategy you employ to achieve your firm’s objectives, you must assist with your clients’ business growth and this will include focusing on areas where they are underperforming.
As ways of doing business grow more sophisticated, firms need to embrace technology and find new ways of interacting with businesses to stay relevant and add more value to their existing clients while attracting new ones. It’s important to understand that winning new clients requires a sales skill-set and mindset, with energy focused on prospecting and winning sales using a sustainable and systematic method.
Technology
However, technology is the future, whether we like it or not. Chasing growth and profit will continue to ensure businesses outsource basic compliance activities to number crunching lower paid/lower value facilities and rely more heavily on financial and business advice.
I’m interested to see that cloud-based accountancy software platform Xero has developed technology that is transforming the way accountants are interacting with their clients. We all know that change requires continual education to ensure real value is delivered.
Xero has developed playbooks to educate their ecosystem of users. The accessible playbooks provide advice and guidance, with each playbook focused on a specific area such as cashflow, retail and professional services. *
Accountants are able to specialise in any industry and firms may have a portfolio of varied clients including public practice, commerce and not-for-profit and public sectors. Whichever industry you or your firm is in, the aim is always to maximise profitability for your clients. Maximising profitability means re-focusing their sales effort and ensuring their sales function is driving the growth they want.
A clear focus on a client’s own revenue and profit aspirations will have an immediate impact on the firm’s success/growth plans. Your advice must be able to achieve the growth they’re looking for with a corresponding increase in their sales and revenue. If you can do this, your accountancy practice will grow along with each client you advise. It makes sense - if they grow, so do you.
Advising is part of an accountant's job - by definition
Accountancy goes viral? A Twitter storm? Well almost. Gary Turner, head of accounting software giant Xero, is calling for the dictionary definition of "accountant" to be amended to reflect the role of your 21st century bean counter.
It's creating quite a stir on social media.
There's an online petition urging the Oxford English Dictionary to take appropriate action that is ticking up towards 500 pretty smartly.
The 'story' has even featured on mainstream business site City AM.
Plus the Association of Chartered Certified Accountants is also backing the campaign for a change.
Financial accounts
OED defines "accountant" as “a person whose job it is to keep or inspect financial accounts”.
Not good enough, says Gary, because such an “archaic” definition omits the function to to advise companies.
Gary wrote to OED's words people: “Today, an accountant doesn’t just crunch the numbers and observe financial operations, but so much more.
"They advise business owners and aid and fuel business objectives such as business growth, improving efficiency, cost and productivity.”
Acca head Claire Bennison says: “Technology is offering accountants greater opportunity to offer provide valuable business insight and advice to their clients.
“Xero’s proposed revision to the dictionary definition of the term accountant to add a small but vital verb – ‘advise’ – is a positive development we fully support as it reflects the changing role of a professionally qualified accountant as a trusted adviser to business.”
Can't wait to see how this plays out!
My journey to a streamlined accounting process
Back in 2003 when I first started out in an accountancy practice, things were pretty much done how they’d always been. Sure, we now had digital systems, but a reliance on paper was still prevalent. And, what drove me crazy in my first role, was that data from two systems couldn’t be passed electronically. It had to be printed out and re-entered.
Other parts of the process also started to grate as I took on more responsibility and was trusted to prepare statutory accounts for clients who had used well-known software to prepare their records.
For instance, the fact that producing a trial balance report and entering it into the account production stage was a print out and data entry affair, even though the products were from the same software provider. Such a waste of time!
Yet to surface
After qualifying, I moved into a business where I could finally look at how to streamline our processes. But, bank feeds had still yet to surface yet so I wasn’t where I wanted to be in creating smoother, simpler accounting processes.
Then came 2011, which saw the days of cloud software providers. I was back working in a practice, and our company went for a hybrid of using QuickBooks Online and Xero.
One provider
When the time came for me to start my own outsourcing business in 2015, I decided to focus solely on accounting software and to work with one provider.
For this I chose Xero because you can use it to integrate client’s core bookkeeping accounts with a huge range of different software to help with reporting, forecasting, time tracking, bills.
While systems continue to innovate and while data entry still exists (albeit in a much less significant capacity) – the difference between what can be achieved in smaller timescales now to when I first started is almost hard to compare.