Are accountants facing a doomsday scenario?

Are accountants facing a doomsday scenario?

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Practice gurus, who have their own agenda, they tell us of the about inevitable doomsday scenario for accountants - Compliance services will no longer be needed. Unless of course your buy their advice and change direction. 

My experience is different to what I hear from practice gurus. I do not have my head in the sand, as some practice gurus say. I know more than them because I am in the business and not advising people how to avoid the doomsday scenario. 

You have compliance accountants as SJD, Crunch and SJD who are expanding. Do they have their heads in the sand? 

The direction I want to remain is that sausage machine practice. Unless, market forces make me, I do not intend to change direction. I want to be that TaxAssist, Crunch or SJD. My key reason is it fits in with the way I want to work. That is delegate most of the routine work and for me concentrate on building the business. If I were to go into advisory services, my time will be spent on doing doing and doing, It would NOT be on business building activities. 

Of course, the competition is now fierce on compliance services work. They is also the downward pressure on fees. I still think there is still a significant market for compliance services. There always will be. 

It is the practice gurus who have their heads in the sand and not me. 

My apologies for the blog like post. Here is my question - Do you buy what the practice gurus say? Do you think your sausage machine practice will be dead in a few years? If so what are you doing about it? If not, why not. 

Do I have my head in the sand?

Replies (28)

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By happy
21st May 2015 10:46

I like sand :)

Always liked sand.

I've been in this game way too long - as long as I get another 10 years out of it I actually dont care. May even jack it all in before then if I come across something much more exciting.

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Replying to Cheshire:
paddle steamer
By DJKL
21st May 2015 10:51

Well

happy wrote:

Always liked sand.

I've been in this game way too long - as long as I get another 10 years out of it I actually dont care. May even jack it all in before then if I come across something much more exciting.

Well, that ought not to be that difficult.I always wanted to be a ..........................................

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By Tim Vane
21st May 2015 10:52

Come on FT. Practice gurus have always spouted nonsense that sounds like special mystical insight but is really just witch-doctor scare-mongering gibberish. It's what they get paid for, and I suspect that for them it is preferable to a proper job.

There will always be those willing to listen, believing that they are onto something, just as there are always people willing to follow any kind of leadership in any walk of life. It's how cults happen. These people will keep feeding the monster, so the monster will never go away.

I am sure some of the gurus even believe a lot of what they say. Delusion goes both ways. It's often the little bits of truth they accidentally fall over that convinces others they are genuinely onto something.

For all your faults FT you seem to be grounded in the real world. Maybe not the same real world as me, but I don't think you have anything to worry about. I almost suspect you lean a little toward being a cult-leader yourself, and you do love the sound of your own inner voice.

So no, you haven't got your head in the sand, though sometimes you do sound as if you have it up your

Anyway, that's what I think.

 

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RLI
By lionofludesch
21st May 2015 10:55

HMRC

I have to say that I'm surprised by HMRC sometimes.

They keep cutting their own staff, yet seemingly encourage taxpayers to file their own very complicated returns.  They'd be much better off insisting on returns being filed by qualified accountants who would at least do some basic checks that the accounts were right and didn't include that dodgy tax allowable business journey to the Seychelles with the wife and kids in tow.

Unfortunately, the Government is populated by idiots whose only interest is to get elected next time.

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By User deleted
21st May 2015 10:58

Practice gurus - the ones sighted everywhere every time the audit exemption limit is raised upward?

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By Roland195
21st May 2015 10:58

My own opinion

I also do not place any faith in the ramblings of these self professed experts however my own opinion is that compliance services are certainly changing, if not quite dying.

Tax returns for the self employed and the like will always be required in some form or another however the relaxations of the various reporting regimes & accounting standards will mean that the perceived value is reduced.

I cannot see how any firm that claims not to offer advisory work will survive.

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By mrme89
21st May 2015 11:02

Vendetta

Did a practice guru once touch you in inappropriate places? You seem to slag them off an awful lot.

 

I think Mark Lee writes some interesting stuff, but a lot of it is just common sense.

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Replying to Duggimon:
By petersaxton
21st May 2015 12:02

What places are inappropriate?

mrme89 wrote:

Did a practice guru once touch you in inappropriate places? You seem to slag them off an awful lot.

I think Mark Lee writes some interesting stuff, but a lot of it is just common sense.

I thought inappropriateness depends on the context not the place.

Mark Less isn't like the other practice gurus. He talks common sense most of the time as you have quite rightly pointed out. He has the advantage of experience and a lot of thinking over most practice gurus although I wish he wouldn't go on about the boring thing.

If more bookkeeping is done online then there may be more possibilities of giving advice as well as compliance but most clients still need an accountant to get the compliance right. There will always be people who think that accounting is easy and submit a lot of nonsense.

My advice to FT is that he should do what he does and can do. He's no need to dramatically change direction because of what some practice guru says.

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Locutus of Borg
By Locutus
21st May 2015 11:04

Those who can, do
Those who can't, teach.

That has always been my opinion on most practice gurus.

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Replying to Cheshire:
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By tom123
23rd May 2015 08:54

and then

Locutus wrote:
Those who can't, teach. That has always been my opinion on most practice gurus.

And those that can't teach, teach teachers..

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By refs8
21st May 2015 12:22

Diasgree

Disagree if anything compliance work is on the increase. The amount admin involved is increasing and it depends on the type of clients you have. I also suppose it depends if you do it properly how I was trained although years ago or cut the corners that it is easy to do these days with technology.

Will be interesting to see where things are in five years time !

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By andy.partridge
21st May 2015 12:30

Relax

Where will my practice be in 10 years?

South of France.

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Replying to ngaccounts:
paddle steamer
By DJKL
21st May 2015 12:34

Of course

andy.partridge wrote:

Where will my practice be in 10 years?

South of France.

Of course may depend on the possible 2017 referendum which could scupper quite a few retirement plans!!!!!!

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Replying to justme:
By ShirleyM
21st May 2015 14:20

Even if we left the EU ...

DJKL wrote:

andy.partridge wrote:

Where will my practice be in 10 years?

South of France.

Of course may depend on the possible 2017 referendum which could scupper quite a few retirement plans!!!!!!

I can't envisage France rejecting any retirees who have their own UK income/pensions ... and intend to spend it all in France. :)

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By pembo
21st May 2015 12:37

So called

deregulation sounds great until you look behind the spin. That pre election bribe garbage Osborne came up with about shelving tax returns being a prime example. Another is FRS105 and the new micro regime. Try getting finance or a credit history on that . Agree with the comment that if anything our compliance input has increased with RTI and auto enrolment being cases in point. Only thing that has dropped off hugely is HMRC interventions that's a shame especially when the client has cover.As for practice gurus from my experience most engage the bulls*** baffles brains principle and this has been a growth industry ever since ICAEW et al decided 20 odd years ago that just being a boring old accountant was just not sexy enough hence we all became "business development specialists". Yeh right.

 

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By User deleted
21st May 2015 12:38

In my experience ...

... I am getting a stream of new businesses.

Yes, they are more tech savvy, and yes compliance workis getting less onerous but there are many that will pay a reasonable fee because they, like you, want their business to work for them, not vice versa. 

They also want someone local who they can drop in on to run something by, they know they could get it cheaper elsewhere, but they place a value on personal service. Those that don't I do not wish as clients. It has always been, and will always be thus.

What these "Guru's" fail to realise is that most businesses, especially the small ones, have more than the one goal of profit maximisation, 

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Replying to Cheshire:
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By jbaccsol
21st May 2015 14:08

and mine

Old Greying Accountant wrote:

... I am getting a stream of new businesses.

Yes, they are more tech savvy, and yes compliance workis getting less onerous but there are many that will pay a reasonable fee because they, like you, want their business to work for them, not vice versa. 

They also want someone local who they can drop in on to run something by, they know they could get it cheaper elsewhere, but they place a value on personal service. Those that don't I do not wish as clients. It has always been, and will always be thus.

What these "Guru's" fail to realise is that most businesses, especially the small ones, have more than the one goal of profit maximisation, 

Bang on and exactly my experience!

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By User deleted
21st May 2015 14:26

Just look at the banks ...

... all the branches ripped out at God only knows what cost (to the account holders) to be replaced by banks of machines.

Our local Natwest is like a drop in centre now, a coffee machine, people milling everywhere, there are two cashiers but no one knows where they should be queuing to wait if they are busy, it is total chaos, and is it what customers want? Generally no!

 

PS. off topic, but is it me, but the spell check seems to be American as it wants me to replace 's' with 'z' and put 'er' not 're' (as in centre above). 

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Replying to lionofludesch:
By petersaxton
21st May 2015 14:26

UK spell checker

Old Greying Accountant wrote:

PS. off topic, but is it me, but the spell check seems to be American as it wants me to replace 's' with 'z' and put 'er' not 're' (as in centre above). 

It is. AccountingWeb don't know how to use a UK spell checker.

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By neileg
21st May 2015 15:00

Life after practice

I got out of practice when I got sick of just doing compliance work. Now I look after 39,000 street lights...

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Glenn Martin
By Glenn Martin
21st May 2015 15:04

times are changing but we are not about to become extinct.

The big 4 will always exist, at the lower end of the food chain there will always be room for 1 man bands who deal with small clients who want a personal touch. Compliance is not dead but as you have seen by the rise of contractor/freelance specialist accountants the market is simply changing this is a growth area fueled by the vast amount of people forced into self employment by the recession. Whereas each town had a few 3 or 4 partner practices which served an area of 20 mile around them, new call centre style operations like SJD that serve the whole country have flourished at the expense of high street firms who probably find it hard to get new work unless they try a lot harder than they did.

Cloud accounting is now billed as the new messiah but to me a client would keep the  same standard of books whether on a desktop system or cloud based, its only our access and flexabilty to the software that has changed. Whilst cloud products are good I would imagine 90% of people still go to work from a fixed setting and work on a desktop set up, as whilst the software may run in the cloud the business still requires a physical location.

I am 43 now and see no reason why I would not work out my days without running short of work, you just need to adapt to the market you are operating in and do not go the way of Woolworths. If the government stamped down on IR35 tomorrow effectively putting all the contractor accountants out of work, would they disappear? No they would re invent and come back as something else. Look at lawyers who do these claims as PPI dies out/comes to an end there will be something else that replaces it.

With regards to OP do you just intend to grow your business for ever or do you have a ceiling you wish to reach at which you will be happy with.

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RLI
By lionofludesch
21st May 2015 15:09

Auto spell checker

I had an email from a client earlier this week in which he confirmed that a piece of information was "defiantly correct".

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By Maslins
21st May 2015 16:46

This comes up from time to time, and I used to be concerned about it...especially as we adopt a "help the client do it" with many things rather than "keep them in the dark whilst doing it ourselves".  However, most of our clients earn well and I'd consider our fee a small cost for the time it saves them in trying to figure out all these things for ourselves.

Pretty much agree with Old Greying blokey...except for the local bit.  Most of our clients we've never met, but they/we are fine with that.

My concern would be that if things do move as predicted, an accountant's job would drift away from ensuring things are submitted accurately, towards one of unpicking a horrid mess when some numpty had been DIYing terribly for years then got investigated.

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By andy.partridge
21st May 2015 17:12

Swings and roundabouts

Have you noticed how the easier things become the more swinging the penalties are?

There will always be a clients that want you to keep them out of trouble and those that have messed up command a premium rate to fix.

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By mikeyban
21st May 2015 22:19

They have said this for the last 30 years...

Death and taxes... There will always be work if you are good and have the requisite people skills.

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Teignmouth
By Paul Scholes
22nd May 2015 08:41

It's mainly up to you FT

Firstly, the personal wishes about what you do are not really part of the discussion, it's the firms work and health that's in question.  You decide not to do anything directly for clients and so, if they demand non-compliance services, all you do is what you did with compliance work, and get someone in to do it for you (leaving you to post more questions on here :)

My experience matches exactly with a move away from compliance to guidance & advisory but that's because I find basic compliance work boring and don't believe it's right not to let clients do what they are willing and able to do for themselves.  

So whilst there's no doubt that taxpayers & businesses are now able to do far more for themselves than they were 10 years ago, I've tended to drive this and not keep them in the dark.

Cloud working and accounting has been a godsend to me in enabling me to shift the number crunching and data recording to my clients, so they now do most of their bookkeeping and payroll, VAT returns and some started doing their own simple SA returns with me giving them the once over.

Whether people like it or not however there is another aspect to this that is not in our control and that's new young business entrants.  Working with CB I've met and spoken to lots of users and, in the majority of cases, the younger ones are more than likely to have a go at doing it all themselves and don't even think of looking for an accountant, consequently over 30% of CB users don't use an accountant but, from my experience, give them sufficient years and, as their business grows they may look to find one, but not to take over the bookkeeping, payroll or personal tax returns but to help with guidance over running their business, managing staff, entering into arrangements with other businesses, investors etc.

In the past year I've taken over two clients from SJD & Crunch and, in both cases, they were doing everything for themselves but couldn't get the 121 guidance they needed for what I see as the valuable stuff. 

I too don't listen to who you describe as Gurus, but there can be solid commonsense hidden in all the hype, where I do differ with them however is that it's an all or nothing thing.  Over the past 5 years, the majority of my business clients have just wanted me to keep an eye on their books and to rush through the year end stuff, with minimal chats on other stuff during the year, but then there will be a small number who need extra advice and guidance and I not only have time to throw myself into it but the fees make up for the loss of compliance work on lots of other clients.

This is not all going to happen overnight and so there are still loads of clients out there who think what you do is rocket science, but, things do and will change and so anyone starting up their new practice would be wise to take advantage of the changes.

PS:  Good to finally meet you last night

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By User deleted
22nd May 2015 18:02

@ Paul ...

... whilst I agree with much of what you say, the point is, as you high-light, compliance work bores you, which is fine.

Whilst that may be so, you do a disservice to it, and yes, software has made number crunching easier, but compliance is not just about number crunching.

Many clients can and want to do that themselves, and many small businesses will have no problem,but many, in my experience, are totally ignorant of what can or cannot be allowed against profit for tax,and even if so, the benefit in kind implications attached to them.

But still, painting your lounge is easy, but to me it is boring and I would rather pay someone to do it so I can do something more productive or more enjoyable, and I find the majority of entrepreneurs I come across feel the same about book-keeping.

The real problem is as you say the smoke and mirrors and the eye-watering fees being charged by many firms still. It is very feasible to make good money from £80pm plus VAT, for a full compliance and book-keeping package, including software, which is a price a worthwhile business is more than happy to pay, and includes "reasonable" ongoing support (subject to fair use, but everyone is used to that anyway these days) You can find similar for £40pm (one firm seems to be sending out mailiings for this to all new incorporations), but without the personal contact. 

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Teignmouth
By Paul Scholes
23rd May 2015 08:52

Hi OGA

You make a good point but, again, it comes down to the same principle that I make above "what the client is willing and able to do".  Many of my clients knew nothing about bookkeeping and now do it, similarly, they knew even less about the basic allow/disallow rules for expenditure but I do what I do with the numbers and educate/guide them, so that they have a basic grounding.

Your point about PAYE benefits is the best example of this and it's probably the topic I hit the hardest when taking on a new client, I give them information sheets on all the common risk ares and warn them that if they get this wrong, there are personal as well as business consequences.

Gone are the days when a client will have a go at doing their books (like they did the year before) for the whole year where the first time I see them is 6 months after the year end, meaning I have to trawl through everything picking up their [***] ups.  

I regularly log in to their books, but these days rarely do I find anything significant, and even my few spreadsheet clients sent me their sheets 2-3 times a year. Finally they will email or call if they come across something that is out the ordinary, or where they want reassurance over treatment. Some do this once a month, others once a year, my fees enable them to contact me any time about anything and so there is no resistance to contacting me.

I was 18 years old when I started to learn all this stuff, and, having been destined to become an engineer, had no natural accountancy leanings. The basics are not complicated, in fact they are now easier plus there's tloads of guidance a few mouse clicks away, so it's wrong to assess clients as being naturally ignorant, unless of course you operate on a basis that keeps them in the dark.

On this basis there are 2-3 clients where £40pm would probably be a reasonable fee.  The one I took over from SJD last year for example produced 99% perfect accounts on his FreeAgent software and had even calculated and entered a deferred tax charge, all of his knowledge had come from his own research.  

Obviously not all clients are the same and so there will be businesses where the owner is better paying someone else to do all this for them, ie a bookkeeper (in or out house) but the ultimate goal is the same, it's the business owner's responsibility to keep up to date and accurate accounts and even if they don't do the work themselves, they need to have a grounding in the principles as they are instigating transactions.  

I suppose I'm fortunate in turning away clients who don't want to operate like this but, with hindsight, wish I'd started operating like this 30 years ago.

 

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