There is no doubt that the shift toward digitisation is being felt widely everywhere, including in the accountancy sector. As part of that shift we’ve seen legislative changes being introduced, like GDPR and more recently Making Tax Digital (MTD), which have firmly pushed businesses towards a new way of working. There is plenty of compelling evidence, though, that this new way of working is a better way of working.
Digitisation offers businesses a huge opportunity to boost efficiencies and productivity by automating administrative tasks. Our own insights, carried out by an independent research firm, revealed UK businesses spend 120 days a year working on administrative tasks. To put that into context, that equates to £30.8bn that small and medium-sized businesses have lost collectively due to a lack of productivity associated with unnecessary administration.
From an accounting industry perspective, digital technologies are enabling practices to receive, process and communicate data far more efficiently than before, while enabling them to engage with clients more often, helping to build deeper relations and add more value. MTD in many ways has paved the way for accountants to help clients who have not already done so take the first step towards digitisation and a more productive future.
First step
Getting clients to take that first step though, even among those now required to do so under the new legislation, isn’t always straight forward.
The simple fact is not all clients are the same, and many will have their own views on the digital transformation that’s taking place. There will be some who just don’t want to, whether through a fear of change or a lack of understanding around the benefits of doing so, and some who may have the will but don’t have the skill. What we know works well in overcoming some of those hurdles is a tailored approach, one that is shaped by putting yourself in their shoes. Here are a few tips that might help with that:
Start by segmenting clients out by identifying where they are on the digital journey. That may include looking at current bookkeeping processes, what their capabilities and resources are to make the switch, and their appetite to do so. It will entail drilling down into any pain points and putting those in the context of their business plans.
VAT threshold
Then, if they do fall within the VAT threshold and are now required to submit their returns digitally, making sure you communicate clearly what the process will entail, how you can support that and the digital tools that might be right for them. It’s important you share plenty of digestible information on why making this change is a good thing for their business, and their teams. Once they have got a better understanding of the bigger picture, only then should you start to knuckle down to the practicalities and the onboarding process.
We know introducing change can often feel a bit overwhelming for busy business owners, so making sure they feel they have the support of a trusted advisor is key to easing any concerns. Make sure there is a tailored service plan in place, with the promise of plenty of ongoing advice and training if needed. And as part of that hand-holding, sit down with them and plan out a roadmap that includes a few test-runs before they need to submit their first VAT return digitally ‘for real’.
MTD marks a great opportunity for businesses to reap the productivity benefits of digitising tax and taking an important step to streamlining the way they run their business. It offers-up richer insights to make more informed business decisions and reduce time wasted on unnecessary admin tasks. From an accountants’ perspective, MTD will undoubtedly have an impact on client relationships, but one that comes with new opportunities. At the very least, it’s a chance to get in touch with clients and enhance your trusted advisor status by helping them make the switch to a digital way of working – which is happening, whether they like it or not.
I will be with hosting a ‘Making Tax Digital: Fast Track Clinic’ on the Sage Stand (stand 720) at Accountex on both days between 12pm and 1.45pm. I will be joined by Verna Gellvear from the Customer Stakeholder Readiness Team from HMRC and Chris Downing, Product Director, Accountants, Sage, and we will be sharing further advice on how we can help you with the agent and business sign up journey.