Life is tough on the front line of accountancy. For more than five years, our intrepid correspondent has been bringing us news and views from a typical West Country practice.
Practitioner's Diary: Tidy desk means ... more work!
Our West Country general practitioner lifts up a pile of papers - and wishes he hadn't.
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31 October - In meetings or out with clients all day. Got back late to find my desk has disappeared under files awaiting review, letters to be signed and a stack of phone messages. So just two days left to achieve my goal of a clear desk - and I'm on a CPD course tomorrow morning!
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30 October - Discovered today that at the bottom of a pile of files and papers right in front of me on my desk is a letter and bill I was half way through sending out in September - ouch! I was wondering why I hadn't received the signed accounts back. GOAL for the week: Clear my desk and associated pending areas/trays and get everything up to date.
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29 October - Well earned day off to recover from the NFL game at Wembley yesterday. Very impressed with the new stadium and the general organisation oft he event - bodes well for the Olympic games in 2012. Frightening to think there were some 87,000 fans at Wembly when our town down here in the SW has a population of just 25,000!
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24 October - Same client, today we received the first of the confirmations requested direct from the banks. We asked them to confirm the amounts of interest paid to our client on all accounts open in the year. Abbey has now replied - with a list that we KNOW only includes accounts still open on 5 April 2007! Utterly useless! With any luck our client will have some correspondence relating to the closed accounts, but without a formal interest statement we can't be sure that we have the correct figure.
Still, we also know now that most of the banks won't be able to report the correct figure to HMR&C either!
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22 October - Returning to a long-running tax enquiry into a wealthy pensioner's Returns, we are in the unusual position of arguing with the Inspector for an INCREASE in her proposed figures! We have already submitted schedules of investment income for the last three years, and the Inspector has been comparing these with the returns from the banks and building societies. We now know that certain banks omit closed accounts from their annual interest certificates and have to be watched like hawks. However, i reckon at least 10% of the data sent direct to the Revenue was also wrong! We have persuaded the Inspector that half a dozen of the accounts on thier list don't even belong to our client, but they have incorrect lower amounts for quite a few accounts where we originallt declared higher amounts!!
I couldn't persuade my assistant that we should accept the Inspector's figures, so we have replied with our own proposed settlement figures - which are more than the Revenue put forward! My assistant is right, of course - having provided statements and declared the higher amounts in the first place we can hardly accept a lower figure. But it does make you wonder. If the offshore bank account details that the Revenue holds are as inaccurate, the consequences for the profession and our clients are unthinkable!
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17 October - Received an unusual letter from Companies House today for one of my clients. It's from the "Appeals and Breaches" dept and says:
"It has been brought to my attention that your website does not comply with the requirements of sections 349 and 351 of the Companies Act 1985."
In other words, the company's name, number and/or registered office is not displayed on the website.
There must be dozens of cases like this out there, I wonder if this was a tip-off or is Companies House actively checking websites? I suspect this won't be the last of these notices - TIP: Time to remind your clients about this in your next newsletter or email to them.
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15 October - Have done some work today tidying up sundry fees and was reminded by something I heard on a 2020 Group course. Chris Frederikson suggested that firms should draw up a menu of fixed fees for what he called "invisibles" - you know, the sort of simple routine taks that barely get itemised on a timesheet but, when taken across the whole clientbase probably add up to quite a lot over a year. The sort of things he was referring to were providing trade and mortgage references, company annual returns, providing a registered office address or company secretary, filling in government statistics returns, etc.
The great thing about a fixed fee list is that any member of your team can quote the fee to the client, and raise the invoice without the fee earner having to remember it later - which usually means that it gets unbilled.
We have already done this for payroll and basic tax returns and the tax team are all very happy to quote for such work when asked, without having to refer it to someone more senior.
The "Invisibles" menu will be published by the end of the week (not to be confused with the "Invisible" menu, which no-one has seen yet)!
P.S. Remember: save the cheerleader, save the world!
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12 October - Having had a little longer to reflect on the PBR I can't complain from a professional point of view - after all, big changes to capital taxes make for big workloads for capital tax planners! IHT has been the main topic of the phone calls and emails I have received so far. Clients with large potential gains eligible for 75% business taper relief will have to be dealt with as soon as possible over the next few weeks.
At least we are well ahead on the SA returns, so there is quiet optimism in the camp that January 2008 will be a much more relaxed affair than previous years.
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10 October - The more I read of this, the less I like it. First impression from listening to Alistair Darling on Radio 5 and reading the press notices last night was that it seemed pretty straightforward. But, having been advising on tax since the 1970s, I should have known it's never that simple!
IHT - this looks like good news for most couples, although anyone who has already got a nil rate band discretionary trust in their will seems to be no better off. Quite generous for widows and widowers, but those with assets in such a trust set up by a deceased spouse might be wishing they hadn't bothered.
CGT - This is the really interesting one. There is a load of work to be done before the end of the tax year. The loss of 75% business asset taper relief gives some urgency to business sales now, and the loss of indexation for companies might make disposal of long-held assets before 1 April 2008 unavoidable. There is going to be a lot of thought on bed and breakfasting/sale and buy-back planning to see if we can milk the best out of the existing allowances before they go. On the other hand, cutting the trustees CGT rate from 40% to 18% might make lifetime transfers into trust - one of the few disposals that still attracts holdover relief - more attractive.
Share indentification - I like this alot! We spend man (and woman) hours sorting out share portfolios and struggling with the stupid matching rules. Day traders especially are a nightmare. from next year it will be much simpler, just one big share pool.
PGS - What? It stands for Planning Gain Supplement (remember Development Land Tax under the last Labour government?) and was expected to come in from 1 April 2009, but the Government has now decided to devolve this to local authorities. Heaven help us, looking at the performance of our local councils they are the last people I would want to see administering this! Either way it's going to make property development more expensive.
They say still waters run deep. The PDR hasn't made many ripples apart from the IHT headline. Don't be fooled!
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8 October - Like many practitioners at this time of the month, I'm poring over the September WIP reports trying to eke out a few more invoices. I know I should bill more venely over the month, but it never seems to happen. Of course, when all the bills are done we'll still have to go back and put all the write offs through the time and fees system, so the job's far from over. I can't help thinking that if we scrapped timesheets and focused on value-based fees all we would need to worry about would be monthly fee income. And I'd probably have a couple of extra productive days every month do do some chargeable work!
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5 October - So what does the practice management system in a timesheet-less firm look like? Presumably, more like a conventional CRM system I suppose. Just imagine what you could do with all the management time freed up by no longer having to fill in and review timesheets, work out recoveries and agonise over time write offs.
I'd be interested to hear from anyone who has taken this step. Do the standard practice management systems from IRIS et al still work for you, or do you need to look outside the profession?
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3 October - I have been reading with interest the exchanges on Rob Lewis's feature on The Billable Hour. He makes a good attempt to defend the undefendable (or should that be indefensible?) but I don't think he convinced many readers.
The trouble is, no-one is selling value pricing practice management systems. We all have such huge investments in time recording and WIP systems, we all agonise for man days each month on under-recoveries and write-offs - basically, that's how we were taught to run a practice and so it's hard to let go and try siomething different.
But if we're honest, few of us actually bill purely on a time basis. How often do you bill more (or less) just because the job took more or less time compared with last year? - not very often (if ever) I would suggest.
The important issue that the value pricing debate should be making us think about is how we value knowledge-based services. Say I research an issue for a client and charge him £1,000 for a report which shows him how to save tax by taking a particular course of action. What do I do tomorrow when client number 2 walks in the door and asks the same question? The hourly billing model suggests I could just give him the answer there and then and charge him either nothing or a nominal fee for my time. The value pricing model says the advice must be worth £1,000 since yesterday's client has established some sort of market value. But on further examination, if client number 2's tax savings are going to be ten times more maybe the advice is worth £10k to him! - we'll never know unless we ask. One thing's for sure - your time recording system won't help.
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Last month our practitioner struggled with post-holiday blues and the unexpected inconvenience of buying better (and cheaper) copier paper - if you missed it, take a look at - September's diary.