Well 2016 has been a year of joy hasn't it.
January (I wonder what normal people do in January?) was punctuated with Bowie's death and then shortly after came the ever growing wave of fear whether it be Brexit or MTD proposals.
I have never had a year where I felt so much unease at what the future held.
Well, the latest wonderous omen is that we are going to be replaced by computers because of technological advances. I read the articles and, again, that fear of unease washes across you and after a year full of bucket loads you wonder if you can take any more.
But then you have to step back and think about the reality of the job that we do.
To put this into context my wife and I run an accountancy practice with around 300 clients and 5 members of staff. Our clients are all small businesses or buy-to-let investors - the normal mix.
Our clients rely on us. If I look back 5, 10, 15, 20 or 27 years (my word that's how long I've being doing this for now......) then I have to think whether there are more signs today that we are "on the way out" than there were before, especially considering the change in technology since I first started when most jobs were hand written on analysis sheets or in red books and the typist literally typed the accounts on a manual typewriter! We even had a "calculator", or adding up machine, that you plugged into the wall and it gave you a printout like a till.
OK I'm feeling old now... but the grounding that raw data analysis gave me underpins everything I do. As I say to the trainees, you cannot properly produce accounts until you could step away from the computer and put that same set of accounts together by hand - ok via Excel.
But the fact is that 27 years later I see the business under more pressure than ever before and that is because our clients are under more pressure than ever before.
The number of responsibilities on our clients is huge:
Self assessment, Corporation Tax, VAT, PAYE (RTI), Auto Enrolment, Company Secretarial, ATED, Benefits in Kind, general need for business and financial advice to remain solvent.... the list goes on
and yet most of our clients are just so busy. They need to work beyond 40 hours a week to make ends meet and they certainly cannot afford to take on their own in-house admin function so they use us.
Nobody drags these people to our door, we don't even advertise and yet year-on-year client numbers grow. So much so in fact that in the last few years I have finally been able to wave goodbye to the non-paying time-wasting clients without thinking for a moment "but we need you!!"
Technology is helping us do our jobs but yet, as I say, we're busier than ever. Tax law is so complicated and deadlines and particularly penalties so vicious that the pressures weigh heavily on us - and we know a lot more about what has to be done than most of our clients!
But computers are going to start doing more things automatically I hear you say, they will give "useful prompts", bank feeds, OCR of invoices blah blah blah
Scary thoughts at first glance but, let's get real here:
We have clients that get on ok at the moment doing things manually and we have other clients who get on ok at the moment doing things on a computer, we have other clients that do nothing - but they all work hard:
Clients who does things manually: The future will automate but the client doesnt understand tax or accounts and is comfortable doing things their way. If they have to automate then they are more likely to ask us to help = more work. Any client that uses an accountant in my opinion is someone who does not want to do it themselves.
Clients who do things on computer already: They come to us for the certainty of knowing we are at the hub overseeing what they do and keeping them on track - for the price they pay to have access to that knowledge then why would they step back away from us?
Clients who do nothing: Well we know they're not going anywhere
Cloud accounting software will be more widespread but, when using Xero the other day (I prefer Quickbooks online personally - but the best is still Excel because it does what I tell it to do!) I stopped to think "if I was a builder then how far could I actually get with my accounts using this?" and the answer was, in my mind, that before too long I would just get lost. There is a lot more to preparing accounts than just scanning in your sales and purchases - debtors, creditors, separating personal and business expenses, knowing what you can claim, VAT implications (flat rate scheme issues!?), RTI, Auto Enrolment. Why on earth, with all that on the to-do list, would a builder want to spend his evenings trying to fathom it out when they don't already
Also bear in mind that the time spent reviewing and correcting a clients efforts on Xero isn't normally a 5 minute task! This week's one - which was a new client anyway - took 50% of the time it would normally do but the spread of work was across higher grade staff so the cost compared to us doing it all was probably around 80%. So automation took away the basic bookkeeper but the next tier up are just as busy and so it goes on.... Our job is to ensure the client's accounts and tax return are submitted correctly - to do that you can't assume the client got it right. If it were an audit then this is high risk - an individual with little knowledge or training entering all the data..... would we employ such an individual to work for us?
I think we are going to find that small is beautiful. If you act for massive firms then yes data entry will reduce and there will be more automation with accountants controlling, monitoring and reviewing more than doing. But if like us you have the mix of small self-employed businesses working every hour they can to keep things going then I only see workload increasing and not reducing.
If Making Tax Digital arrives with quarterly reporting............ well that's going to crank the pressure up even further isn't it because if a client doesn't want, or know how to deal with things once a year then I find it hard to believe they are going to be keen to take over now (and if they did how good is their output going to be?)
My staff, and I still include myself in this as well (must be the manual adding up machine experience), can still write up a bank account, purchases, sales and cross analyse quicker and more accurately than any bank feed or OCR could. Bank feeds need review, OCR's need to be scanned and everything revolves around checking - personally, having tried it, I just want to download a CSV into Excel, sort/manipulate the data quickly, cross-match, analyse and job done.
27 years in and getting busier, self-employed numbers growing, rules getting more complex, we've moved on from red books to online cloud accounting and yet still our workload grows.........
Personally I just want work, and the world around us, to give me back that feeling of being in control because that is at the heart of our wellbeing. At the moment I think it is US who are working like robots and that's the problem. Certainly, if that is the problem then technological advance will help just as it has in the past.
Keep the clients happy, try and find a moment to make yourself happy too, keep stepping forward like we have for many years - baby steps along the way that keep you on your feet until you look back and think "wow we came all the way from there!!!????"
Oh, and final point - How on earth did we ever manage to get VAT returns, accounts, tax returns done back in the 1990's with pen, paper, calculator, ruler and a bottle of tippex. Those were the days!
