The upcoming year promises to be busy for UK accountants. We have to prepare for new policies such as Brexit, Making Tax Digital, and complying with General Data Protection Regulation (GDPR) obligations. In addition, accountants have to worry about how new technologies will impact their work and help businesses survive in what appears to be a weakening economy. This is a challenging environment, but it is precisely in these moments when great accountants can distinguish themselves from the pack and turn challenges into opportunities.
In order to do that, we have to know what the biggest challenges are. Here are but a few examples, as well as some advice on how accountants can adapt and thrive.
UK accountants for now may be some of the biggest winners of Brexit, as even now we deal with clients worried about how the process will affect their businesses. But at the same time, accountants have to closely watch the Brexit negotiations and understand what has and will not change.
A good example of what will not change is GDPR. The UK is still currently a part of the EU and that means complying with GDPR when it comes into effect this May. And even when the UK leaves, Parliament will likely have passed legislation making it national law.
GDPR is only one example of how while the UK will obviously change laws upon Brexit, much of what we keep will still be derived from the EU. Brexit will be a major change for this country, but much of our job consists of telling clients that Brexit does not mean the end of the world or a new British utopia. While it is important to scout out the differences, things will not change that much.
- Advancing Technology
Accountants over the past year have had already had to adapt to new technologies such as the cloud and the rise of Big Data, but other emerging technologies will also dramatically change the profession as well. The two things which accountants must understand quickly are blockchain and machine learning.
Blockchain is generally associated with cryptocurrencies like Bitcoin, but even Bitcoin skeptics acknowledge the value of blockchain for all sorts of application, including ELO Boost. Blockchain, as Computer World notes, is “a public electronic ledger - similar to a relational database - that can be openly shared among disparate users and that creates an unchangeable record of their transactions.” Because it is openly shared, blockchain ledgers eliminate the need for third-party authenticators such as say, accountants.
Other technologies also threaten to put accountants out of business. Machine learning can automate data entry and deal with much of the mundane drudgery which is part of our profession, and improved accounting software makes it easier for laymen to conduct basic accounting.
Accountants will still have an important role to play thanks to our expertise, but we will have to be more creative and look at offering financial advice. And even if you struggle to turn on your computer, you have to keep track of ongoing technological trends. The alternative is falling behind and becoming obsolete.
- Making Tax Digital
The government’s efforts to get businesses to adapt to Making Tax Digital (MTD) may have been slowed and delayed last year, but it is not going away. And whatever the costs in the short term, moving to a cloud accounting system will make it easier for business to track their taxes and cash flow without having to go dig through a pile of records once a year.
The Government explicitly states that business with a turnover above the VAT threshold (which is probably most of your clients) have until April 2019 to start keeping digital records, but no client can switch from paper to digital in a day. That is why it is all the more crucial to start hounding your clients now to make sure they actually start the transition process. The sooner they start, the more time they have to switch to a method which is better for them anyways.
- The British Economy
As noted above, prognostications for the UK economy in 2018 are not good. Reuters reported last week that a survey found that businesses are worried due to Brexit as well as concerns over inflation and productivity.
It is during these tough times when an accountant can make the biggest impact. Examine your client’s business and industry and look for opportunities such as developing technology or industry moves, and do not hesitate to offer your advice. Accountants have to be advisors in addition to number crunchers, looking for ways to help your clients’ business grow and expand.
This year promises to harbor major changes for accountants in terms of how their clients and they themselves will be affected. The most important weapon an accountant has now is not technology or the ability to calculate, but the ability to gather and process information. Stay ahead of trends, and always be prepared to offer your clients advice so they are not reacting to the latest crisis.