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Build your tech stack to make MTD work for you

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In the second instalment of our ‘Taking control of Making Tax Digital (MTD)’ series in association with Dext, we’ll explore how you can make your digital transition work for you and your clients.  

26th Nov 2021
Product Domain Expert Dext
In association with
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Over the next few months, we’ll be publishing five articles aimed at giving practitioners the confidence and skills to ensure that their practice and clients are ready for the opportunities and challenges that MTD presents.

Embracing the digital practice

As we mentioned in our previous article on establishing your digital vision, the implementation of MTD ITSA is, from a technological point of view, fairly straightforward. Firms just need to add the tools to maintain digital records, linked data and online submissions. The difference between firms that seize the MTD opportunity and those for whom new obligations will be a pain in the neck is the ability to integrate those changes into a workflow that adds value for your business and your clients.

Making the most of MTD isn’t a matter of how you deliver the final calculations to HMRC – though that is the bar for compliance. To make MTD work for you, you need to consider every step leading up to that final data submission and rethink how you can improve it from a digital point of view. 

Here we'll explore how you can refresh your existing processes and tech stack to deliver maximum convenience for your customers.

Mapping processes and workflows

The very first task is to quantify the essential processes involved in the task of preparing and processing your clients’ taxes.  

While this may seem obvious, the workflows involved in providing a tax service go beyond just the sourcing, preparing and submission of tax data. The key advantage of modern digital accounting tools is their ability to share data in real-time, which means that the wider you can cast your net, the more you can use efficiencies generated in one part of your business to enable another. 

For example, if you capture all of your clients' relevant financial details digitally at the point of onboarding, this can make the business of preparing and sending them invoices for your services dramatically easier.

A non-exhaustive list of processes to consider includes:

  • Client onboarding 
  • Training and education regarding relevant processes and obligations
  • Capturing sales, expense and bank data
  • Reviewing provided information for quality, completeness and correctness
  • Tax return preparation and submission
  • Customer billing and pricing review

Review issues and bottlenecks

When considering the performance of your existing processes, there is a range of perspectives you can consider:

  • Is this fulfilling its purpose: For example, when onboarding clients, are they moving through the necessary stages at an acceptable speed and providing all the information you need to effectively meet their needs.
     
  • Is it doing so in a way that adds value: Once you have confirmed that the process is achieving its basic purpose, you can consider how well it is doing. Staying with our onboarding example, do your clients find the process easy, or simple? Do your team find themselves chasing clients for additional information? Even if the process is achieving its goal, it may be doing so at a high manual cost.
     
  • Is this process aligned with other processes: On occasion, something that works well in isolation may cause problems when considered in its wider context. For example, having new clients bring in their initial information in paper format may be a way to source all necessary details in one meeting, but it then requires manual keying into your customer data system, which then prevents your team from delivering value sooner.
     
  • Is this process aligned with your vision: As we discussed in our previous article, every interaction you have with your customers should be aligned to delivering the value that defines your firm’s purpose. If your goal is to deliver financial visibility and confidence for your customers, are your processes keeping that promise?

Finding solutions

If you find issues or room for improvement in your processes, you can then move on to fixing them. In the context of MTD ITSA, the new regulation becomes a yardstick by which to measure potential solutions. 

For example, as digital records become mandated, this can offer opportunities to create efficiencies and improve your processes for your practice and your clients. By using a digital bookkeeping app such as Dext Prepare, you can simplify the client experience at multiple points of the customer journey:

  • Onboarding: Downloading and training on the new application as a way to instantly show how your service will help clients be more efficient.
     
  • Capturing data: Using a single tool to capture all relevant information, such as Dext Prepare for expense data and Dext Commerce to automatically fetch your clients’ sales data from multiple e-commerce and point-of-sale platforms. Using the right tools for your clients simplifies their bookkeeping and eliminates manual tasks, such as downloading repeat electronic invoices. 
     
  • Reviewing information for quality: Using Dext Precision to automate data analysis, avoiding costly issues further down the line and reducing the need for human input.

This then leads to a streamlined tax return submission based on reliable data, with minimal effort for your team and your clients. By mapping out your processes in depth, and then optimising or even rebuilding them from the ground up you can create a complete end-to-end experience that adds value at every stage for your team, your clients and your practice. 

The technology-based journey you create then becomes your new tech stack - an end-to-end journey that goes beyond compliance to fully digital practice.

Take control of your future

At Dext, we’re helping thousands of firms create future-ready processes that benefit clients, owners and the bottom line. No matter where you are on the journey towards compliance, time-saving technology, support and advice are always available from our expert team. 

Get in touch with Dext today to find out how you can take control of your future.

Read the other articles in the 'Taking control of Making Tax Digital' content series.

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By Hugo Fair
26th Nov 2021 20:34

Tech Stack? More like Tax Stuck.

And "Take control of your future"! It may be true that this is a way of achieving partial compliance (although I remain to be convinced of the balance between cost, quality & efficiency), but the net result is diametrically opposed to taking control - being based on wholesale abnegation of all areas that are quality controlled by a professional accountant.

BTW, if the best example of quantifying "the essential processes involved in the task of preparing and processing your clients’ taxes" is 'Client onboarding' ... then I suggest a little time spent in an office with those who prepare/process clients' taxes should be a pre-requisite to a more informed next article.

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