This is a spin off from the aricle on Xero announces shift into income tax, CT and accounts production
My own interpretation of that article was that many posters were upset about the payroll or the fixed asset register while there doesn't seem to be any coversation about what is hiding in plain sight i.e. that Xero, QB, Sage will eventually become the accountants and service providers. That's not exactly a huge leap of faith. Athough there may be issues with the software now, these will eventually be fixed and the software and learning alogorithims are getting better, combine that with open banking and what is to stop Xero from hiring a load of accountants are providing year end compliance, tax advisory, aduit work. They already have the data so all they need is a few accounts staff to tidy up the year end.
Some people might say that the relationship between the accountant and the client is so important and the level of trust etc etc. That may have been the case a few years ago when compliance fees were much higher and technology wasn't as advanced but the reality is that relationship is eroding as compliance services are being "commoditised" Just look at the way the industry is evolving, support desks to commuincate with your accountant similary to the way you would communicate with vodafone or O2.
I'm not complaining or trying to stop it and I don't read AW that regularly but surely I'm not the only one who sees Xero, QB, Sage etc as being our competitors at some point in the not to distant future?
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Do they have the data ?
Or do they have some data which includes the proprietor's drawings under "Wages" ?
Well, it depends how they decide to operate but I would suggest that operating as some sort of call centre will be a disaster for software co, client and HMRC. Though I can't say I'm overly bothered about HMRC as I think the general lowering of standards in the profession has been driven by them.
Lion
I suspect you, like myself, probably do not need to worry that much about such progression, we will likely be pursuing our hobbies 24/7 by the time this all bites.
My main worry will be finding an accountant to do my tax return in retirement, by which time I will likely be labelled in the "very difficult client" category.
It must be tricky having an accountant as a client, I know my father's partner was not totally happy with my father as his client once my father had retired as a solicitor- "what about x or have you considered y etc" must be irritating in the extreme.
Lion
I suspect you, like myself, probably do not need to worry that much about such progression, we will likely be pursuing our hobbies 24/7 by the time this all bites.
Yeah - not bothered really.
By the time it kicks in, I'll be gone.
And if you tolerate this then your clients will be next
And if you tolerate this then your clients will be next
Will be next, Will be next, Will be next.
In the same way that Iris, Digita and Sage have been providing accounts and tax compliance software for decades, and bookkeeping for several years, without stepping on accountants' toes, I don't see the above providers, and their kin, bothering, there's still too much reliance on accountants by businesses and taxpayers.
Rather I see businesses and tax payers using software to do their compliance without needing an accountant.
This has been happening in slow steps for decades and even 3-4 years back I saw a survey of small businesses in which over 30% didn't have an accountant.
Had it not been for self interested accountants dragging their heels, many more business owners and tax payers could have already avoided, or reduced their reliance on, accountants.
Many 20/30 year olds will now start in business defaulting to do as much of it all themselves rather than follow their parents' advice "You'll need an accountant"
Many 20/30 year olds will now start in business defaulting to do as much of it all themselves rather than follow their parents' advice "You'll need an accountant"
I foresee a growing market re HMRC enquiries developing- the combination of tax legislation becoming more complex coupled with stuff in the numbers and it balances so it must be correct.
I foresee a growing market re HMRC enquiries developing- the combination of tax legislation becoming more complex coupled with stuff in the numbers and it balances so it must be correct.
Can't see it. The Government thinks they don't need any more HMRC staff. The software will get it right.
Cue John the Plumber video
Many 20/30 year olds will now start in business defaulting to do as much of it all themselves rather than follow their parents' advice "You'll need an accountant"
Sure. Unfortunately, we see all too often on this very forum that the parents' advice should be followed.
Yes, of course there will be those that make a mess of it, but then, from other posts on here, there are many accountants in the same boat.
These days as there are so many free and cheap resources to help a young business get set up there is very often no need for an accountant to get involved straight away or, as happens on here or with some of my clients, they only need to ask an occasional question.
I have clients who ran their own books, payroll and year end stuff perfectly for two to three years before deciding they needed to develop the business and so needed outside help.
This is better illustrated with personal tax returns where there really is no need for an accountant to get involved in a return showing salary, dividends and a couple of charitable donations and the majority of my sub-40 year old clients have always done their own returns.
Had it not been for self interested accountants dragging their heels, many more business owners and tax payers could have already avoided, or reduced their reliance on, accountants.
Is that such a bad thing?
EDIT: I mean the heel dragging accountants keeping us all in work, not the business owners making us redundant.
Ever since the first computerised bookkeeping package emerged, technology has been there to make life easier and if the accounting professional is unwilling or scared to investigate this and advise accordingly s/he is doing the client a disservice.
So, yes, dragging your heels to keep yourself in work artificially, is a bad thing.
When I worked for Clear Books and ran their training and workshop sessions for accountants and users I was amazed at how blatant this was.
There was a user who had run the books on CB from day one but it turned out that the accountant (recommended by his Dad!) refused to look at the books and asked his client to print out the TB and general ledger and post it to him every year, then charged him a fortune for finding errors and passing them back.
Then there was the firm that had always done the bookkeeping and moved everything to Xero but refused to let clients have access and still insisted on their clients posting them photo copies of every sales invoice for them to enter in the books.
Similar story where the clients had to send the accountant paper bank statements to enter manually as he didn't trust bank feeds or CSV downloads and, in fact, the client didn't even know they were possible till they attended a workshop.
I have also read complaints on Xero's community site from accountants saying that their clients were able to see too much, fearing they might be inclined to want to do the work themselves. Ironically, one of CB's strong points is its 70 user permissions, meaning you can tailor the software to a deeper level and it was loved by accountants who didn't want clients to see stuff they were doing and overcharging them for.
There was a user who had run the books on CB from day one but it turned out that the accountant (recommended by his Dad!) refused to look at the books and asked his client to print out the TB and general ledger and post it to him every year, then charged him a fortune for finding errors and passing them back.
Oh - there were errors, then ?
Well, errors will be completely eradicated by MTD, of course.
If a software/bot/system can do a job then eventually it will. From my point of view that means I need to be an accountant that offers things that a computer can't or I will be out of a job.
Things like:-
A smile
Poor taste jokes
Make the coffee
Custard creams
Discussion on how good/awful XXXXXX was in the match last night
My USP with some clients is a bottle of Scotch, a decent malt helps cement the relationship and once you have enough number two on the list is simpler.
The hardest part of 'inheriting' a client is the time it takes, making the first year fee untenable and a big write-off.
Somehow and mysteriously it takes less time to get it right than to get wrong. And all the people who got it wrong are now telling you how to get it right.
I am getting better at handling it.
And it's good to turn the steady stream of the disenchanted into happy(er) people.