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Planning ahead for the digital challenge
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Planning ahead for the digital challenge

Start preparing now for the digital challenge

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8th Dec 2016
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Accountants are falling into two camps when it comes to preparing their firms and clients for the transition to cloud accounting and digital tax.

That is one of the findings to emerge from a survey of 271 accountants undertaken in November by AccountingWEB in association with Intuit QuickBooks.

The preparing for the digital challenge survey set out to benchmark the current state of the profession as it faces a period of unprecedented change in the way accounting records are compiled, in client behaviour and expectations and how tax information is provided to the government through its proposed Making Tax Digital (MTD) regime.

The timetable and final details for MTD may still be up in the air, but with draft legislation due in January, it is now clear that the government is set on making digital record-keeping mandatory in the UK.

Yet the AccountingWEB/QuickBooks survey found that just 16% of survey respondents support 25% or more of their clients in the cloud. The other 83%+ face a major challenge migrating small business clients to tools that will comply with HMRC’s record-keeping and reporting requirements.

“It really does take time to transition clients. It’s something you need to plan well ahead,” warned AC Mole & Co partner and QuickBooks ProAdvisor Lexy Shore in a video discussion about the results.

Regular AccountingWEB contributor and small practitioner Rebecca Benneyworth agreed that practitioners faced a “really turbulent couple of years” pushing their clients towards digital record-keeping. But there were benefits to making the transition. “That puts you alongside clients, being there and available to answer simple questions,” she said.

In each of the fields surveyed - cloud adoption, business advice and marketing activity - smaller subsets were moving faster than their peers. These leadership groups ranged from the 16% catering for more than half their clients in the cloud, to the 20% offering clients a full package of advisory services, and 15%-25% pushing ahead with content-driven digital marketing initiatives.

These firms are fully aware of the changes happening around tax and technology, and are putting in the effort now to ensure they stay relevant to their clients’ needs and expectations, the AccountingWEB/QuickBooks survey found.

The video panel participants all took this kind of proactive stance, in contrast to the 17% of accountants who said they intended to put off changing their accounting processes until the last possible moment.

In response, Rebecca Benneyworth offered some cautionary advice: “I wouldn’t want to have the clock running and HMRC expecting quarterly updates at the point when you’re just showing clients what online accounting is all about. It’s much, much easier to make that transition on a gradual basis.”

Find out what else the panellists have to say in our 20min video:

Download the Preparing for the digital challenge report for more detail on the survey responses.

Replies (2)

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By feelingthestrain
09th Dec 2016 00:40

"It’s much, much easier to make that transition on a gradual basis."

Let's hope that message gets through to HMRC then Rebecca because April 2018 does not give that luxury.

All HMRC need to do is turn this on it's head and go with largest businesses first, then medium, then VAT registered and then, if it is all going brilliantly, the smallest.

That eases everyone in and gets the systems working. It then gives us all time to ease our clients in, the most organised first, then the potentially could get organised and then the clients who are a danger to themselves.

Surely somebody in HMRC has stopped to question whether doing things in the order they originally proposed makes no sense whatsoever?

When many of us have clients completely incompetent of even keeping the most basic of records then the danger is that our clients present us with a catastrophic mess every quarter, or when doing the annual final submission, which needs complete reprocessing.

The quarterly submission will be a meaningless farce for a large % of small businesses doing things themselves with the tidy up happening post-year end (unless they decide to go it alone in which case good luck HMRC).

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By North East Accountant
10th Dec 2016 12:52

Only trouble turning it on head is HMRC haven't figured out how to do MTD with companies yet.

All those troublesome little things like accounting standards compared to nice and easy cash basis.

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