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: What's on your wall?
Tacky pastel prints? Motivational posters? Not for our West Country general practitioner - it's rock and roll all the way!
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29 November - Visiting a local music exhibition the other day I had the priviledge of meeting Dr Jim Marshall, creator of the world-famous Marshall guitar amplifiers. He was signing books and posters, so I just had to join the queue and say hello.
My office now has the addition of a Marshall poster featuring Slash (of Guns n Roses fame) and an original Jim Marshall signature. I was surprised to find that the new decoration seems to have met with almost unanimous approval in the office, so maybe we'll see about continuing the theme into client meeting areas and reception.
The new poster nicely complements my 'motivational' poster from www.despair.com, a photo of the leaning tower of Pisa with the slogan "Mediocrity - it takes a lot less time and most people won't notice the difference until it's too late." Not that we endorse that sentiment in our professional work, of course, but it does make me smile every time I see it.
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27 November - Feeling smug today, managed to polish off a couple of tricky partnership accounts, which keeps our Tax Return total dropping nicely. However, despite our resolution to review WIP and send out bills every Friday I see that many people haven't completed November timesheets and Friday has come and gone - and I haven't looked at bills yet!
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22 November - Just for the record, we have now filed over 50 per cent of this year's tax returns. The big debate is how high we can push our target for filing before Christmas. My tax team reckon 65 per cent is manageable. I'd like to see us make 75 per cent to make January 2007 more pleasant than January 2006!
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20 November - Just spotted an email from our tax software supplier which includes a note about batch submission of returns. Is this a conspiracy with HMRC to persuade us to file out of hours, or just pragmatism?
Either way I just like the reassuring email acknowledgement that comes back straight away when you file a return online. They're not exactly self-explanatory messages, so the prospect of storing up a batch of returns to be automatically filed overnight, only to arrive next morning to sift through a load of 'rejected' emails and fix the problems, fills me with dread! Frankly, if that's the only way to make this system work I'd rather go back and file paper returns!!
(But yes, OK, I will try this batch filing routine this month just in case I'm driven to use it in January. I'll let you know how I get on.)
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16 November - I see HMRC is repeating its usual request for us to file tax returns early (bit late for that isn't it?) - or "outside peak times". What does that mean? Do they expect us to work evenings and weekends just because their vastly expensive IT systems can't cope?
And I see they reckon filing by Internet instead of on paper saves them £5 per return - where's our share of that? The online filing incentives for PAYE have enabled a lot of my small businesses to invest in IT, but there doesn't seem to be any recognition by the Government of the huge investment our profession has made in IT systems to file Self Assessment returns online. There's certainly little scope for getting more fees out of clients to cover this.
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15 November - Interesting to see that Digita are making a similar point on using software to protect against negligence claims, although of course they are talking about tax software.
I still think the likelihood of small firms making a mistake is greater with company accounts presentation and disclosures - it's just that no-one really cares! What does that say about the profession?!
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13 November - We like new technology down here. I still find it hard to believe those survey results, but they certainly make me feel better about trying to position the firm as more IT-aware than our competitors.
The key to using IT effectively in practice is to always ask two questions -
1. Does this hardware/software save us time/money?
2. Does it improve our client service?
Frankly, if you currently make very little use of IT in your practice, you can answer yes to virtually any IT investment! The trick for the rest of us is to distinguish between IT expenditure that still scores a yes to both questions, and the rest which includes the fancy gadgets and software that fails to deliver any benefit (Office 2007 or Windows Vista anyone?)
Number One IT investment for any practice must be final accounts software. After all, it's core to what we do as ACCOUNTants. The annual accounts are often the only tangible result the client sees. Good accounts software will enable you to produce them quicker and more presentably.
And if you prepare company accounts I would suggest you are virtually criminally negligent if you don't use final accounts software to make sure the presentation and contents of your accounts are up to scratch. There's some real rubbish filed at Companies House. The ICAEW has threatened to discipline firms who file substandard accounts (hint: remove your firm’s name from all unaudited accounts filed at Companies House! And the detailed management profit and loss account), but I suspect they can only scratch the surface of this mess.
On the other hand, other firm’s low technical standards can be helpful to others. I reckon half the small company accounts I get from Companies House when approaching prospective clients include full P&L details. One set I downloaded recently even included WIP and debtors lead schedules at the back! Just as well as the firm has failed to reply to my request for professional clearance and linking information.
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10 November - More good news. By 31 October we had filed 40 per cent of this year's Tax Returns, compared with only 20 per cent this time last year. This is particularly good news as this year's "40 per cent" is a lot more than last year's, so we have put on a whole load more tax clients this year.
I think what this means in simple terms is that we'll have just as many to file in January unless we pull all the stops out now!!
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6 November – Great news – most accountants are apparently switched off over technology! In fact it’s something I have read a number of times on this site. So the good news for those of that DO use the latest technology is that we still have a huge business market to pitch for.
This survey would explain why we often win new work just because we have a decent website and use email. My only complaint is that websites like this one are encouraging accountants at large to encroach on the territory that we lucky IT-literate minority have capitalised on successfully so far!
Still, I reckon we’ve got a head start on most of them. By computerising all our technical processes – time and fees, accounts prep, final accounts and tax returns – we are gradually de-skilling a lot of the basic work, which cuts our costs at the bottom end and enables us to devote more time to the more valued (hence more expensive) advisory services that we can sell to clients. You just can’t do this without significant investment in new technology.
The next step could well be to partner an outsourcing firm overseas that uses the same software systems and really cut our operating costs. Not sure if the partners are up for it yet, but I reckon we’ll have to consider it in future. As the poster in my office says:
“A firm that will go to the ends of the earth for its people
Will find it can hire them for 10% of the cost of Americans” – or British workers!
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3 November – Interesting article on wireless Internet on this site. Maybe it’s just me, but is this really a serious technology yet? Yes, I know it’s the future, but I’m not sure the future has properly arrived yet. For starters, the battery life of these portable devices is awful. And if you’re used to high speed broadband on your office PC – yes, we even have it down here in the South West of England – then a 3G card just doesn’t cut it. Don’t get me wrong, I love new technology. I’ve had a mobile phone since they were the size (and weight) of a car battery, and I’ve been using a PDA since the first Palm Pilot arrived on these shores. But mobile Internet? It’s just not happening yet!
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Last month our West Country general practitioner shared some practical tips on better billing - see October's diary for more details.