Cash accounting spawns new apps
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John Stokdyk sadly passed away in June 2023. He had been with the site since 1999, rising from news editor to editor in chief, global editor and head of insight. As a roving editor, he investigated the profession's use of technology around the world. He devoted his spare time to technology history and an oddball collection of stringed...
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Another threat
Another example of the threat technology is to the small/general practitioner that relies on compliance services.
The modern start-up is more technology friendly and will increasing be comfortable completing their books/tax return on their phone/pad, without the need to pay £200 to £500 to an accountant.
Could the non-VAT registered sole-trader disappear from the accountants client list?
This would leave VAT registered sole-traders and they should probably be incorporated and they have the option to use online providers who charge £59.50 a month e.g. www.crunch.co.uk.
Interesting to see how firms respond. I was with one (small high street firm) yesterday who have developed an added value proposition and are just about to bill £59,000. It's the largest single invoice they have ever raised and it's now for bookkeeping.
One strategy accountants can consider (in response to the challenges) is collaboration. There are a number of networks (and franchises) and the firms in the networks seem to be doing better than firms who try and do it all on their own.
Bob Harper
it must be a good idea ...
Ooh is that £59.50 a month including an app to take photos of receipts on your iphone ... or do you have to pay extra for that ?
Doesn't matter
@Dave - being sarcy or serious? Either way it doesn't matter the point/fact is technology and legislation are changing the game and accountants need to learn new rules.
My recommendation is and always will be to do MORE.
Bob Harper
On line services
all very well
But the one we have just taken a client from had the following issues.
Half the price but:
1 Tax return horribly wrong - clearly did not have a clue.
2. Tax bill over paid tax by £1800 - because of above incompetence.
3. Payment on account followed.
4. Advice failure cost client at least another £1000 p.a
5. carry over information ? or even a reply is non existent.
6. I wonder if they have any P.I. Cover when we send them the bill !
You pay your money you take your pick.....but there is always a cost to a cheap service.
And there will be plenty of work putting things right etc from clients that have had these bad experiences.
Too be honest clients that think accountants are expensive adding up machines get what they pay for, and will always pick the cheapest accountant and we have seen some. including £60 per year for accounts and tax return (you should have seen the muddle) I refused to even bother fixing it was clients own silly fault which cost him big time.
HMRC should provide these apps for free !
Ignore the threat then
@The Black Knight - then you can ignore the threat then.
By the way, I have seen all the above from offline providers so I won't ignore what is happening, others can make up their own mind.
Bob Harper
What Threat ?
@The Black Knight - then you can ignore the threat then.
By the way, I have seen all the above from offline providers so I won't ignore what is happening, others can make up their own mind.
Bob Harper
What will be will be ! Can always make some redundancies.
The two constants are: The rules are always changing and most of the population can't manage the simple stuff.
A new set of rules just adds complication, and our role even from a compliance point of view has remained largely unchanged despite technology which has just added to the cost and complication.
It will still come down to whether clients want to save money or not, on these small jobs we usually save between 3 and 6 times the fee over those that don't know what they are doing. And that's before they get the added value bits for free !
I have given up worrying.
There is nothing in this world that a man can't make a little cheaper and nastier.
@ The Black Knight
"The HMRC should provide these apps for free"
They are free. Rather than the HMRC spending taxpayers' money on developing them, they provided the specs, and asked the software houses to develop to those specs. and provide the software for free - which we have duly done.
Interesting
@The Black Knight - my take is that your attitude leaves the door open for others.
Can I ask, is what you save clients based on things like tax savings from profit extraction and the flat VAT scheme?
Bob Harper
@ Bob - and lots of other bits
I always spot something that the previous accountants have missed or that client did not understand - even when they have read the book themselves.
I have lost count of the number of times clients have misunderstood what is written on the business link website for example.
I some ways I agree with you that the standards are not very high out there, but that just makes it easy for me.
But you can't always get the message across as the ticket price is always the issue, unless the clients have had bad advice and have realised that there is a pricing point where the job will not get done properly and you may as well have asked your Granny or a 4 year old to do the job instead.
The door is always open - I don't really want clients that can't see the value in what I do.
They are just expensive to take on and will leave you when someone quotes them 50p less.
Those that do understand that they save many times the fee (so their accountant does not cost anything) and their business benefits in many other ways too.
If my attitude is wrong and cheap as chips is the future then I have no wish to continue as an accountant - why would you ? Surely plumbing is less hassle and more profitable.
Accruals Concept
Isn't the Accruals Concept a fundamental part of accounting? Or am I missing something here? I completely don't agree with it and see troubles ahead for the sole traders who take it upon themselves to DIY and ditch their accountants. Maybe it's a long term plan by HMRC to catch them unawares!
new apps
Were these Apps, now being marketed, written before the end of the consultation process ?
and a year before the proposed implementation date ?
If so it makes a mockery of the consultation process, and the OTS.
It would seem a decision was made with the software companies then the OTS wrote a report in support of that.
Is this a bit beyond spin ?
The final HMRC spec came out in February - www.hmrc.gov.uk/softwaredevelopers/mobile-apps/mobile-app-external.pdf
They are simple, simple record keeping apps. Keeping an electronic copies of receipts rather than a carrier bag or shoebox of paper ones (or not keeping them at all) is an improvement whether cash accounting happens or not. The target "market" is for people that currently only fill in 3 boxes on the short self employment pages.
Whether you use that electronic shoebox of receipts to produce full GAAP accounts with a balance sheet might be right for one client but not for another - say an eBay trader with a turnover of £1500.
I am sure some accountancy practices will embrace them, others not.
I don't see many businesses will decide whether or not to use an accountant because they can take photos of receipts when they are in B&Q !
You are right
@The Black Knight - your attitude is right and it sounds like you deliver.
Can I ask:
1) What you average fee is?
2) What non tax value you deliver?
My point is that market segments are disappearing for the typical general practitioner. I believe more micro business will represent themselves without a problem because a) the rules will change b) technology will help them.
Other segments are being eroded/taken by people such as www.crunch.co.uk.
I also believe that the tax system will radically change. At the moment it supports the accountancy industry, it needs to support business. Tax take could radically change as more jobs move away from the public sector. Have a look at Hong Kong.
Interesting times ahead.
Bob Harper
Expense tracker review
Expense reports are on of the most time consuming bookkeeping tasks. A startup company of two employees and one director can spend as much as 12 hours a month keying in personal expense claims.
For this reason staff dread the task of submitting monthly expense claims, and are often late presenting expense claims to management.
We road-tested a bunch of mobile apps to see if this tedious task could be improved. We published our findings here:
http://futurebooks.com.sg/blog/comparison-of-ios-expense-trackers/5160