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Cost
Firms should think about the cost of implementation.
Creating a remarkable brandDeveloping unique added value services/productsProducing amazing marketing collateral e.g. bespoke websiteAdding unique content (blog posts, Webinars and videos)
Firms that are not able to do this will be stuck with compliance. That seems to be moving to lower cost providers (online and to home workers).
My take is that firms need to get their head around having a full-time team member committed to this.
Bob Harper
The More Network and Crunchers
Great stuff
I was able to attend the conference, and for my money it was one of the best I've been able to attend.
As always, the really great stuff came from learning about what other firms had tried and found out.
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Load of flannel and buzzword bullshit from the 'visionaries' as usual
We have to "specialise" at the same time a couple of paras later "add services"
Well which is it then?
We all have to be "different", by all having a different "strap line" which is an oxymoron and just laughable quite frankly. Its the sort of thing that poor quality firms have or people with full time development managers with too much time on their hands. It makes no difference to the customer. Just dead weight dragging the business down with needless overhead.
At the core of this there is some truth, things change and people change, and you have to change with it, but that has always been true. That is no "paradigm shift" (I wonder if the speaker even knows what this means, or just spouts the buzz word?) it is just gradual evolution.
It is only an abrupt change if you have been sitting with your head in the box for the past 20 years or you work with people who have been.
This sort if corporate tripe reminds me what I "opted out" of big business 10-15 years ago.
To me the firms that will die are the ones that fall for this tosh as they wont be doing what they should be doing - banging out the tax returns and keeping the clients happy without the overhead of corporate navel gazing.
Definition
@YouReallyShouldn't - I think it would be a good idea to define "modern firm".
I take this as having employees as well as being profitable and sustainable.
Home workers do not need to change much if at all. Perhaps just use new technology because their client's want to and carry on form filling.
Bob Harper
The More Network and Crunchers
Way to go ireallyshould...
It speaks volumes that they have to use words like "paradigm shift" rather than "change" to make readers think that there is anything new here in what's splurged.
The only thing that tends to be new are the ears listening, ie the inexperienced newbies who search around for guidance only to be taken in (like previous generations) by hysteria & hype.
It's a bit like religion I suppose, there are probably some sound and valuable bits to it all but it's spoiled by the all the over embellished robes, rituals, symbolism & naff wine.
At least with JW's it only takes 5 seconds to say no thanks & close the door.
Words
@Paul - I think the choice of words are important...for example, when you look into it there is a big difference fixed price and fixed fee. Like there is a big difference between the efficient and effective business models for accountant.
I agree with Ron Baker that the profession is facing radical change, not just change/improvements with Cloud technology.
I personally think we are at a technological tipping point and we are just about to see simple work disappear or move low cost with:
Big corporates such as www.crunch.co.ukHome worker lifestyle accountants
Firms who want to be profitable and sustainable need to start changing the business model sooner rather than later.
Bob Harper
The More Network and Crunchers
@Bob
Don't wish to be rude but I closed the door, I really have heard the same stuff every 5 years for over 30 years, just with different words, and have a cup of tea that needs my attention.
Hearing it before don't make it wrong
@Paul - hearing it before doesn't make it wrong.
I think the Internet and now Cloud computing are game changers because it allows new and better competition. It also allows home worker accountants to take market share.
This means firms need to raise their game and implement a more structured marketing strategy.
Enjoy your tea...that took 50 plus years to take off and seem pretty normal now.
Bob Harper
The More Network and Crunchers
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The underlying act of preparing tax returns and advising clients is completely unchanged. If anything its harder now than 10 years ago as the rules are more complex, but our consultant friends who dont appreciate how tax works, don't understand this.
The most dramatic change I would say occurred about 20-30 years ago when we went from handwritten or typed returns to doing them "on the computer". And that is still only the admin side, not the advice side. The key issue at this point was that for a generation accountants "didnt do letters", armies of secretaries did those. When I started work 20 years ago that was nearly dead in the water, and everyone below partner level typed their own letters. This was quite a new concept then, now it is normal.
The tools for the job are changing slightly bit by bit, year on year but its not really that dramatic. Actual time and cost savings are not that great, they are pretty marginal.
Eg post vs PDF there really is very little in it both create their own problems whilst our consultant friends will tell us if we are still sending tax returns out on the post we are dead in the water dinosaurs. It just ain't so.
Accounts
@YouReallyShouldn't - my focus (and I think the above post) is businesses and accounts based compliance.
56% of businesses in the UK are not VAT registered and do not employ anyone. They can now complete their own tax using cash accounting. In my opinion, cash accounting for these clients should NOT be optional.
Bob Harper
The More Network and Crunchers
.
And your point about cash accounting is what? Displaying yet again that you don't understand anything about accounting and why "cash for all" would be a disaster for many micro businesses and lead to increased compliance costs?
Sound to me like someone has a small limited company well under the economic barrier and is not making enough cash to pay for his accountant to produce the figures. After all in your mind compliance work is so easy it should all be free.
but no-one is asking you for your opinion
@YouReallyShouldn't - my focus (and I think the above post) is businesses and accounts based compliance.
56% of businesses in the UK are not VAT registered and do not employ anyone. They can now complete their own tax using cash accounting. In my opinion, cash accounting for these clients should NOT be optional.
Bob Harper
The More Network and Crunchers
.. and there will be many irate small businessmen that would be after your blood if it did happen
PS - how do you think lenders would view cash accounts for all? they certainly do not give you a fair view of profits earned
so probably more compliance costs to meet lending criteria, and that's not even considering the potential tax disadvantages
cautiously yes
Sending Tax Returns electronically is OK if they are encripted - far too many accountants just send them by e-mail which is illegal. As is sending accounts!
Beware!
Cash Accounting
@YouReallyShouldn't - my point is that if cash accounting was mandatory it would reduce/eliminate the need for accountants to be involved in micro businesses reporting to HMRC.
I fail to see what cash accounting would be a disaster or how it would increase compliance costs. Money In less Money out with a few simple adjustments is all that is required.
Bob Harper
The More Network and Crunchers
not that simple
@YouReallyShouldn't - my point is that if cash accounting was mandatory it would reduce/eliminate the need for accountants to be involved in micro businesses reporting to HMRC.
I fail to see what cash accounting would be a disaster or how it would increase compliance costs. Money In less Money out with a few simple adjustments is all that is required.
Bob Harper
The More Network and Crunchers
read the legislation before you open mouth, ...you show your ignorance Bob
loads of disadvantages that could end up with a businessman paying more tax , ......
so where's your value added ?.. do you advise all of your small businesses to go for this ?,( eg what about those with large borrowings )
because if so... some will invariably pay more tax as a result
they should'nt allow salesmen to post on an accountants forum .. its dangerous.. someone might actually believe what they say is true, and suffer as a result
I'm fed up of trying to educate you Bob...
isn't that what rental income
is yet 000's seek an accountant to deal with their affairs. I suspect most households own a bucket and sponge....how many though decide to use a car wash....
Rental
@YouReallyShouldn't - I am sure there will always be compliance work...just less and it will probably go to homeworkers and low cost online providers.
Firms of accountants will struggle to make the margins unless they add value.
Bob Harper
The More Network and Crunchers
and so it was...
Remember a dear client of many years standing who has since sadly passed on, remarking that I was of course a 'boutique accountant' At the time I smiled his comment off... but over the years have come to reflect and agree with his assessment.
We all have a niche; from my own small one man band semi-retired practice to the mighty (and oft sued?) PwC. Strangely in the small provincial business park where my office is located, there are three to four other firms of accountants - yet their clients don't come knocking on my door and fortunately... I don't appear to have lost to many clients to them! Simply put at this level we all attract/repel a certain client profile, ymmv,
the modern accountancy firm
Changing technology is an ongoing factor, nothing new in itself. Accountants prosper according to how they lay their stall. It all depends on what type of client they aim for. Working solo from home is not bad earnings and it is their choice to operate that way. However, operating a bee-hive firm profitably requires a particular strategy. Corporate clients know independents are better priced and provide personal attention but they will still go to firms in international groups; it is instinctive. Ironically, stand-alone accountants find it difficult to pay subscription for membership of an international alliance although they preach Ad Nauseam to their clients that it is about the margin and not the static cost. It is the attitude in the end that counts, pardon the pun! Jaffer Manek, Affilica International
@peterlashmar
Whilst I don't do it, this is the first I've heard that sending unencrypted tax returns & accounts to clients is illegal, can you point us at the law please?
clients need protecting
Whilst I don't do it, this is the first I've heard that sending unencrypted tax returns & accounts to clients is illegal, can you point us at the law please?
as is your practice .. I always encrypt .. but I don't see unencrypted email as being any different from posting via royal mail , .....which can just as easily be intercepted
I just encrypt as a belt and braces (and knowing the clients can often get themselves in a pickle sometimes, so it is really to protect them from themselves)
Its all been documented before.
Modern firms specialise
'According to Frederiksen, modern, profitable firms typically specialise in a particular industry or product.
In addition, it knows its purpose or 'Why' and doesn't try to be all things to all people.'
When I was studying I read In Search of Excellence they called it 'Stick to the Knitting'.
The thing is ...
... we don't all want to be super efficient, super rich and super successful - we want to be happy.
Not all doctors are specialist consultants, we need a mixed bag of specialists, and of general practitioners.
It gets rather tedious constantly being told what you should be doing.
I suggest certain people should go on ITV player and watch last nights "Tonight" program
https://www.itv.com/itvplayer/tonight/series-16/episode-32-is-britain-happy-tonight
In particular as the worlds happiest man states at 22:35
"The key to happiness is altrism and compassion, benevolence - there is no such thing as a successful selfish happiness. Me me me all day long makes you feel miserable, it makes everyone miserable around you , it is a lose lose situation."
Correct
@Wilcoskip - good for you.
The problem is that 99% of accountants haven't joined the dots because they are looking in the wrong direction. They are focussed on time and jobs rather than value and people.
@OldGey - the truth is that accountants can be happy providing an average service, and many do...does that make it right?
If you have a health issue that impacted your life would you want average health care? A GP or a specialist?
Accountants are in a position and have the potential to improve their client's lives by using their knowledge. Not to save a few quid of tax but by helping them create a better business. And, by doing this they helps themselves and the local, national and global community.
It's a lot to ask of accountants but who else is going to take the lead?
Bob Harper
@ Harper
I find your comment grossly insulting and displaying crass levels of ignorance.
To continue the analogy, there are many accountants whoe provide a very good service to their clients, in terms of service levels, results and timeliness information (many of these consider what you call "added value" to be what they are paid for anyway) and deal at an above average level when dealing with the coughs and colds of the business world. They also, like competent GP's, although not necessarily having the skills to deal with "a health issue that impacted their client's life" they are more than able to spot the symptoms and refer the client to an appropriate specialist.
There are also a majority of clients for contributors to this forum who have no value to add above what can be obtained from a simple first aid kit. Thre is a big place for that in the market.
I don't disagree that there are many clients who could have value added by the right accountant, I just wonder why you don't accept there are many that can't.
So Harper, keep harping, because the more you do the more stupid you make yourself look.
@Grey
You choose to be offended, if you want.
I am sure there are many accountants who provide a "very good service" and it would be interesting to define what that means.
For the record, I think that means things like:
Accounts completed in 45 days after the year endEmail the same dayPhone calls within four hoursQuarterly tax forecastingMonthly seminars on key business topicsIntroducing the latest technology to clients
Our experience is that this is just not happening. And, the research by other companies supports this. For example, Xero reports that 50%+ of businesses still use a spreadhseet to do their bookkeeping!
No excuse for not having added value...client's deserve better.
Harper
More and Crunchers
Xero is Zero
You choose to be offended, if you want.
I am sure there are many accountants who provide a "very good service" and it would be interesting to define what that means.
For the record, I think that means things like:
Accounts completed in 45 days after the year endEmail the same dayPhone calls within four hoursQuarterly tax forecastingMonthly seminars on key business topicsIntroducing the latest technology to clients
Our experience is that this is just not happening. And, the research by other companies supports this. For example, Xero reports that 50%+ of businesses still use a spreadhseet to do their bookkeeping!
No excuse for not having added value...client's deserve better.
Harper
More and Crunchers
Bob .. its a rudimentary book-keeping system that has many flaws ( I could right a bible) and looks as if it was written by a 14 year old who had heard about book-keeping somewhere, but hadn't really done any
actually spread-sheets are fine for a lot of small businesses , easy to manipulate , no monthly fee and no third party controlling your data and software, so no chance of rogue employees of cloud sellers messing you up or losing data if you dont pay
and Bob.. apart from the point 5. (sales gimmick monthly seminars) , most practitioners do the rest and a lot more (like advice on trading disclosures , which are law, punishable by fines .. and which you continue to ignore on your www)
Bob, that list is hillarious, and demonstrates yet again you don't have a clue about what is happening in small accounting practices in the UK. What happens in the strange world in your head does not reflect the reality.
Nor do you have a clue about what the clients want, or what they will pay for, or why they will come back.
@OGA, only reason I post to ensure Bob is exposed for what he is.
Reality
@YouReallyShouldn't - reality is what you make it.
We start calling business owners next week so I'll be able to report back what they say about accountants.
I'll keep everyone posted but my guess is that most (80% or more) will say:
They don't really hear from their accountant until it's time to do accountsThey do not get tax forecastsThey have not been offered the latest technologyThey do no get invited to free eventsThey are not offered advice on personal or business money management
Bob Harper
The More Network and Crunchers
Bob is condescending and defamatory
@YouReallyShouldn't - reality is what you make it.
We start calling business owners next week so I'll be able to report back what they say about accountants.
I'll keep everyone posted but my guess is that most (80% or more) will say:
They don't really hear from their accountant until it's time to do accountsThey do not get tax forecastsThey have not been offered the latest technologyThey do no get invited to free eventsThey are not offered advice on personal or business money management
Bob Harper
The More Network and Crunchers
Go away Bob , we always offer this to clients .... and no one believes you
(and of course when you ring people up they will tell you any old crap just to get rid of you,..... I certainly would )
Ps - get your trading disclosures right on our website before someone shops you
now that's value added
.
Sounds pretty desperate if you are cold calling with a 'survey' with a predetermined outcome to promote your franchise.
If you ask most people if they would like a newer car, a bigger house, better health, less time at work, higher wages, less tax to pay, more holidays of course they will say "yes".
Doesn't mean a thing.
I hope you are doing this yourself so I can have an image of your being told where to go every 30 seconds this week.
I like to put cold callers on hold myself to waste their time.
TPS
@YouReallyShouldn't - just register for TPS...the telemarketers will thank you for it....it will save some of their time and energy http://www.tpsonline.org.uk/tps/index.html
Bob Harper
More and Crunchers
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Yes Bob, as ever well ahead of you. Been there, done that.
Do just assume everyone else knows nothing when you post? It might explain a lot.
Assume nothing
@YouReallyShouldn't - I don't assume anything.
Bob Harper
More and Crunchers
Same experience as I really shouldn't
And an awful lot of them still want them tax returns "banged out ".But ( we are still finding) by a suitably qualified local Accountant who they can come in and visit as email mostly confuses things and there are still quite a lot of things that are best resolved by meeting up and thrashing out. And that includes the generation that grew up with computers. They still don't really want to do anything to do with tax themselves. And many of them have not got the time to do much on Accounts. But by ly the law of averages some of 2020 predictions may come right in the next 10 years. After all as has rightly been said here they were saying l this 20 plus years ago. I know I sat in that class.
and that is before we start on the new HMRC penalty regime
Which i think is a game changer that will frighten a lot of self employed off doing tax well beyond all of our planning horizons ! 30 per cent penalty for getting the Work in progress adjustment slightly skweiff for example. It's a bit of a fright out there in self employed land of you don't know for certain you areddoing it 100 percent right..
frederiksen is dumb
" you do'nt see starbucks selling coke" ?
of course not
it's not because "it's not who they are or who they believe in"
its because its a coffee shop trying to make a profit and they cant compete with coca cola
more sales tripe
Bob Harper is to accountancy ...
... as Bob Downe is to music, but not as funny :o)
https://www.youtube.com/watch?v=rl2og4Er9Nw