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Bookkeepers hold the answer to Making Tax Digital

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While there are many accountants dreading the Making Tax Digital start date, bookkeepers see the introduction of HMRC’s digital transformation project as an opportunity. 

11th Nov 2021
Co-founder and coach 6 Figure Bookkeeper
Columnist
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Bookkeepers and accountants aren’t on the same page

Let’s take MTD ITSA as an example. Many accountants see it as something else they have to deal with after Covid, furlough and MTD for VAT. If you’re an accountant you might be feeling relieved that this extra project has been delayed for a bit longer, but if you speak to a bookkeeper, you’ll find they are deeply disappointed about the delay. 

An opportunity

Bookkeepers see MTD as their opportunity to finally highlight the importance to their clients of taking their bookkeeping seriously. They see MTD as an opportunity for more regular bookkeeping by the masses, calling for their talents in accurate and timely record keeping which we all know is the foundation for the advisory services everyone is telling us all to provide.

And we think this could just be so much easier if only accountants and bookkeepers would work more closely together. 

How bookkeepers and accountants can work together

To ease the pressure on accountants in getting their clients ready for MTD, we see two ways bookkeepers could lend their support. You might not immediately think of bookkeepers as leading on this role, but working with bookkeepers every day, we know that they are seen by their clients as the day-to-day finance department - even if the client also has an accountant. 

If there’s anyone who can instil a new system or a new way of working, who will be there to answer the queries, and be sure that every feature of a software product is being used to its full potential, it’s going to be the approachable and more available bookkeeper.

And then there’s the bookkeeping

A bookkeeper can, of course, actually do the bookkeeping as well. Many bookkeepers ensure their clients are up to date weekly, leading to better, more timely record keeping. This is key, because once the basics are done properly, you are naturally in more frequent contact with clients, safe in the knowledge that you’re not going to be faced with 500 unreconciled items if they ask a question. 

Contact creates trust, and gives the opportunity to understand client’s businesses better. And this is where we bring in advisory services which help clients start to make decisions using their finances that annual compliance just can’t help them with. 

Bookkeeping is key

MTD isn’t going to be the last thing that’s the new thing. And bookkeeping is the key. It’s key to MTD, compliance and advisory. And there’s an army of people - bookkeepers - who are doing bookkeeping really incredibly well. 

Accountants, you can bring a bookkeeping department into your business, or you can work with bookkeepers. Either way, you’re supporting your clients, you’re opening new doors, but you’re not stressed because you’re not doing the bookkeeping. 

Focusing on bookkeeping will also improve your workflows, improving your business for you, but also improving your business from your client’s point of view. Maybe it’s time to rethink the bookkeeper/accountant relationship because together we can be a powerful team.

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Jo Wood will be speaking at AccountingWEB Live Expo in Coventry on 1-2 December. 

Replies (18)

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By GHarr497688
11th Nov 2021 22:12

I will be the first to answer this rubbish.
All my working life I have seen so much rubbish produced by so called "book-keepers". Many I have seen have either walked out , demanded high pay if any good or simply produced worse garbage than a clients would do. The information book-keepers produce is from clients records so the same problem exists. The time needed very rarely equates with the pay offered and is on par with care workers. MTD ITSA will work simply because HMRC will force it will and the fact that Accounts are wrong , tax paid wrong will be hidden with HMRC propaganda so they can all pay themselves a bonus on the back it's success. What a joke.

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Stepurhan
By stepurhan
12th Nov 2021 06:02

Did AccountingWeb really just pay someone to write an article saying that their day job is "key".?

Don't get me wrong, a good bookkeeper is worth their weight in gold. However, there are a lot of mediocre bookkeepers out there. Increased demand from MTD is not going to improve this situation. The good bookkeepers will fill up their time and stop taking on customers. This means it is far more likely that mediocre or poor bookkeepers will be doing the majority of the extra work under MTD.

This article paints all bookkeepers as wonder workers that will solve everyone's MTD problems. This may be true for the author and her business, but it is not even close to the truth for bookkeepers as a whole.

As an aside, there is a lot of subtle denigration of accountants in this article. Bookkeeepers are "approachable and more available". They "bring in advisory services" because accountants only look at "annual compliance" apparently. Interesting approach for someone that claims to want to work together with us.

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By LookerOn
12th Nov 2021 09:52

More book-keeping is going to mean an increased cost for sole traders who hardly want to pay the accountancy fees they have today. This MTD is going to tempt many of these small guys into submitting their own accounts which is probably going to lead to a lot less tax income for the state.

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By Jackie in Wiltshire
12th Nov 2021 09:56

“Bookkeepers see MTD as their opportunity to finally highlight the importance to their clients of taking their bookkeeping seriously. They see MTD as an opportunity for more regular bookkeeping by the masses, calling for their talents in accurate and timely record keeping which we all know is the foundation for the advisory services everyone is telling us all to provide.”

Well this bookkeeper doesn’t agree with any of that. I spend most of my time looking after my Ltds, with payroll/CIS/VAT/Accounts etc. I fit in my SA/SEmp clients around those Ltds, so they are spread throughout the year. None of my clients do their own bookkeeping – that is what they pay me to do. None of my clients have the interest, or the time, or the capabilities, or the understanding, to do their own bookkeeping.

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By Winnie Wiggleroom
12th Nov 2021 10:32

"Bookkeepers and accountants aren’t on the same page"

Sorry I stopped there!

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By Duggimon
12th Nov 2021 10:36

"but if you speak to a bookkeeper, you’ll find they are deeply disappointed about the delay. "

Why? Anyone who benefits from it can sign up early, the system is available, it's just not mandatory.

If the services on offer (both from bookkeepers and MTD) are so wonderfully beneficial to all businesses regardless of size, type, number of transactions and complexity, then why do you need a government scheme to force people to use them?

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Replying to Duggimon:
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By Paul Crowley
12th Nov 2021 13:03

"but if you speak to a bookkeeper, you’ll find they are deeply disappointed about the delay. "

SAYS IT ALL
Op wants compulsion for a service nobody wants, if they do not already use the service
There is a serious shortage of capable bookkeepers
That is now. When MTD comes in there just will not be any spare good bookkeepers to fill the void
MTD needs to be spread so that bookkeepers with a decent level of experience can be created
That is of course unless OP considers that the skills are all learned in a couple of weeks

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By eppingaccountant
12th Nov 2021 10:46

Jo Wood, if I may politely say, you have not put balanced thought into your article. As others have stated, you seem to give bookkeepers a glowing review and the rest of your article is just too simplistic and does not touch on the real issues and problems that crop up day to day. However, I am disappointed that somebody referred to your article as "rubbish" because it's not.

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By kdbr
12th Nov 2021 11:01

I can just see the sales pitch for the army of taxi drivers and window cleaners around the country; and hear the response...

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Replying to kdbr:
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By Paul Crowley
12th Nov 2021 13:06

I was thinking joint landlords with just 2 or 3 properties
Or the gardener with £6K income and one rented property

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Morph
By kevinringer
12th Nov 2021 13:12

Jo, who is going to pay the bookkeepers?

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Sarah Douglas - HouseTree Business Ltd
By sarah douglas
12th Nov 2021 13:21

Hi Joe

Really interesting take. Whist Tax Returns are not the core of our business. I agree where you are coming from with qualified bookkeepers like ICB who are very well prepared. Our core business is preparing management accounts for business. We work jointly with many accountants so that the client gets the benefit of both skills management accounts and tax planning. Across the UK there are many good accountants and bookkeepers that work extremely well together.

It was great to see you at the Luca awards at The Londerer and many congratulations on your large practice of the year award.

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By LookerOn
12th Nov 2021 16:02

I can see, judging by some of the replies, that book-keepers who are working with bigger companies are not really going to have a problem with MTD since these companies are probably already using some form of software for their record keeping. Also accountants who are not in public practice are not going to be affected much by MTD.
Its accountants and book-keepers in practice dealing with members of the public, esp. sole traders, who are going to be faced with an uphill battle. I think its a pity that MTD can't be introduced in steps. Digital record keeping first. Multiple annual filings after that. Hitting small scale sole traders with turnovers averaging under £30K with 5 filings a year is probably going to lead to large scale non-compliance in the first instance followed by inaccurate filings in the second (estimations sent in by people doing it themselves)....

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Replying to LookerOn:
Morph
By kevinringer
12th Nov 2021 16:30

Companies aren't impacted by MTD ITSA at all. It's only unincorporated businesses, which by and large are small and micro businesses: Jo the plumber, Derek the dog walker, Harry the hairdresser, Leah the 1-property landlord and Sid the subcontractor whose only paperwork is his annual tax certificate.

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Replying to kevinringer:
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By eppingaccountant
12th Nov 2021 22:22

Not "Pete the plumber" to keep up the alliteration?

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Replying to eppingaccountant:
Morph
By kevinringer
13th Nov 2021 17:11

No, he's the painter.

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By cblizzard19
16th Nov 2021 18:09

As the owner of a Bookkeeping practise we already work with all our self employed clients each week / month, exactly the same as we do for our limited clients. Their business is no less worthy of our time because they are not limited. We try to teach them the importance of good accounting habits, timings, regular bookkeeping etc to prepare them for the time where they may decide to go limited.

The responses to this post are really disappointing that bookkeepers have such a bad reputation still with accountants. Yes there are some dodgy bookkeepers out there but trust me I have had the displeasure of tidying up from some very dodgy accountants also! This hasn't made me discredit accountants as a collective but just realise there are bad apples in every industry, at every level. I do hope one day accountants will open their eyes to the value we bookkeepers bring and stop with all the judgment we recieve. It's tiring. In my eyes we are one industry all with the same end goal, to support our clients!

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Replying to cblizzard19:
Morph
By kevinringer
16th Nov 2021 21:51

For those accountants who either don't want the hassle, or don't want to take on the staff or whatever, working with a bookkeeper may be a solution. The bookkeeper will then have the grief of getting the records in order. Of course that'll cost more, but it should lighten the accountant's workload. It would only work for clients of a certain size, so the accountant will still be left with the tiny clients. I work with a local bookkeeper. She can do the data input far cheaper than I can and I can rely on her to balance and reconcile.

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