Clarity, reassurance, and accuracy: using tech to support clients post-Budget
This week’s Spring Budget raised some eyebrows across the industry. With frozen thresholds, the corporation tax hike set to come in soon, and prices still rising, SMEs are looking to their accountants to make their lives easier.
What does the Spring Budget announcement mean for your clients?
Let’s recap the key points of the speech:
- Corporation tax to go ahead as planned
- Full expensing tax relief to replace super-deduction from 1 April
- Duty on fuel and draught beer frozen for 12 months but alcohol duty to rise with inflation
- Payable credit rate to remain at 14.5% for loss-making R&D-intensive SMEs
- Introduced 12 new Investment Zones to drive business investment
- Energy Bill Relief Scheme will be replaced by Energy Bills Discount Scheme.
Now, how do you explain this to your clients when they knock on your door asking - ‘what does it mean for me?’
Despite the apparent measures to promote growth announced in this week’s Budget, a lot of announcements don’t paint a favourable picture for the majority.
It’s a tough road ahead for SMEs. The corporation tax increase isn’t going anywhere, R&D relief is only marginally more generous for loss-making companies than it was last November, and fiscal drag will mean, generally, more taxes all round.
For those smaller and medium-sized businesses, the corporation tax hike isn’t that much of a problem as it affects mostly companies with a turnover of £250,000 and over.
And, although the full expensing tax relief means that business owners can write off the full value of their investment from taxable profits, they are unlikely to actually make use of it. That’s because SMEs with less than £50,000 turnover probably won’t exceed the Annual Investment Allowance of £1m.
And as far as R&D goes, unless your client’s business is in tech, they’re unlikely to benefit from the announcement. Loss-making companies that are not investing over 40% of their spending will only receive £18.70 per every £100 of investment – less than what’s offered now.
Businesses are also likely to be hit by the new Energy Bill Deduction Scheme as it effectively cuts support compared to what SMEs receive now. EBDS is set to be capped at £5.5 million compared to £18 billion for EBRS.
With all that, it makes sense, then, that businesses need clarity, reassurance and accuracy when it comes to their finances. If you want to make it easy to give them that, it’s time to lean on tech.
With prices still rising, businesses of all shapes and sizes need to prepare for potential future economic strain. Streamlining processes where possible is a huge part of that – as is keeping a close and careful eye on cashflow.
Using tech to automate and schedule invoices and payments, or to monitor spend approvals, can help clients to manage cashflow more proactively. Balances can stay positive for longer, debtor days can be driven down, and visibility of what’s happening and when improves.
In the same way as the Chancellor focused on ‘removing barriers’ in his speech, using tech successfully is about making it easy for clients to face forward and manage things as they go – rather than dealing in last month’s bills and payments.
With thresholds frozen, more businesses are likely to get dragged into the VAT regime, and tracking and claiming eligible expenses (both R&D and otherwise) will be critical for many clients’ tax planning strategies.
Similarly, with the new full expensing system for capital allowances designed to replace the super-deduction, clients must understand that logging spend correctly is critical to accessing the relief they’re entitled to.
By leaning on tech that gets all your software talking to each other, categorises payments correctly, and presents relevant information in a visually accessible way, that process becomes a whole lot easier.
Finally, by relying on integration and automation to manage invoice processing, tracking and categorising, as well as keep an eye on cashflow, you’ll free yourself up from manual busywork – giving you time to focus on helping your clients tackle the bigger questions.
We know how many hours you spend chasing clients for missing invoices or reminding them to pay bills by the end of the quarter – and we know how busy they are, too. You don’t like chasing, and your clients don’t like being chased.
When it comes to new ways of working, simplicity is key to adoption – that’s why, with our Invoice Inbox, your clients can send all their invoices to one email address, no matter what format it’s in.
Automating the whole thing means more efficiency, more accuracy, and less strain on you both.
Focus on facing forwards
We’ve never made a secret of the fact that we want to help you automate accounting for good. By freeing you from financial busywork – and arming you and your clients with clarity and reassurance – we know great things can happen, even if the next few years prove challenging.
How do you think tech could make it easier to support your clients? We’d like to know – get in touch at [email protected] to share your thoughts. We’d love to hear your ideas!
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Aurelia are the automation and software experts for accountants and finance leads. We want to to automate accounting for good and free minds of financial busywork . We reinvent the way businesses run their finances, arming them with clarity and reassurance and making accounting as powerful and effortless as it should be that it almost feels...