Don’t let HMRC run your practice strategyby
It’s important that practice owners set their own strategy rather than let it be dictated by HMRC and regulatory change, argues GoProposal by Sage vice president James Ashford.
“MTD is part of something bigger - you want to build a digitised firm, not just a digital one,” said the GoProposal co-founder at AccountingWEB Live Expo last month during a tech talk devoted to the future of accounting.
The difference between the two approaches was equivalent to a “heads-up display in a modern car that transforms the driving experience, giving speed, safety alerts, and directions versus a simple digitised version of a traditional speedometer”, Ashford explained.
Together with Sage director for accounting and bookkeeping, Chris Downing, and Jordan Smith ACCA, client and practice developer at AG Smith & Co, Ashford explored the challenges accountants and bookkeepers faced when trying to retain control over their practice strategy.
The panel also discussed how to stay profitable across all areas of practice and what accountants were doing to ensure their clients are ready for the transition to MTD ITSA in April 2024.
Set your practice strategy
Bearing in mind the need to determine their own strategy rather than being dictated by external forces, the panel advised practitioners to take a step back and really make a strategic decision about what their firm should offer to clients, and what tech and process would deliver that service efficiently and profitably to the right clients.
However, they cautioned that software was not a magic wand. “You can have all the software, but still find you’re having to work too hard to be successful unless your strategy and processes are right,” said Ashford.
Once you’ve set your practice strategy, the next step is to get all your team on board to implement it. Ashford cautioned: “Everyone in the business needs to make sure their mindset is aligned to the business strategy.” Managers needed to “watch out for the ‘Yes, but…’ responses that were really really ‘No’ in disguise”, he added.
Compliance is not dead
The speakers were clear that in spite of the constant buzz around the need to offer advisory services, compliance as an offering was far from dead. Downing insisted: “The future of accountancy is not JUST advisory. It’s also delivering compliance efficiently, profitably and in a timely manner.”
Jordan Smith agreed: “For all our clients it starts with compliance. Then it’s about identifying services that will help your clients develop their business. This helps them feel that you value their custom and are not just taking their money. Getting this mindset into all your existing clients will help your practice grow.”
Ashford said that MTD and the move to quarterly reporting would prompt a move away from annual fees. “You need to move to monthly billing as you are doing regular work that you need to charge for. You’ll need to have the right systems, processes and mindset in place to manage the transition for all your clients.”
Smith agreed, adding that practices could provide quarterly management accounts at the same time as quarterly updates: “This could be very useful for businesses, as well as a new revenue stream for the practice”.
Smith explained how his firm had been using the new Sage For Accountants platform that was making it easier to see and segment all the firm’s clients. “As well as enabling services such as bookkeeping and compliance, it gives us a database of our clients and lets us capture what tech they use, and how much they want to self-serve,” he said.
Build a great customer experience
Downing said MTD was likely to mean that “every client will need to be service reviewed, repriced and re-engaged”.
Ashford traced the roots of the GoProposal business back to MAP, the accounting practice where he’s a director alongside founder Paul Barnes. When they were looking at how to grow the practice they realised they needed to create the best possible client experience - not just compared to other accounting firms, but compared to the best businesses out there.
“Most accountants over-service and under-charge their clients,” Ashford said. “This creates a lose-lose situation, where clients don’t value what you do, and you don’t charge enough to be able to provide the level of service they actually want to pay for.”
A simple spreadsheet of MAP’s prices and services eventually grew into the GoProposal software solution, which created the foundation for a new sales culture that maximised the value the firm offered to clients.
AG Smith & Co also uses a GoProposal pricing and engagement strategy with all new clients and plans to roll it out to existing clients too. Smith explained: “It’s important to price things sensibly and profitably. If you were previously doing payroll as a loss leader for clients, then the pandemic meant you were doing a lot of extra work for free. Beware of pricing in annual bundles. Make sure each service is priced properly and is valued and needed by your clients,” he said.
Future-proofing your firm
Looking ahead, Ashford side-stepped the term future-proofing. “The main thing is to be adaptable - no one can predict the future. Certainly almost no-one predicted the turmoil of the last few years. But one thing is certain, that you’ll need to adapt to changes and challenges that come your way, whether that’s staffing, competitors, technology or even a global pandemic. You need to make sure your practice is in the strongest position you can be.”
Drawing together the different ideas, Chris Downing summarised: “As well as setting your practice strategy, the challenge will be to change the mindset of your clients. We believe that around 20-30% additional effort might be needed for MTD compliance. Recent Sage research shows that of all those who help support vital small businesses, accountants have been named the number one go-to service. With 9/10 small business owners rating accountants as an important part of their businesses’ operations. So, practices should feel confident in their offering and need to reinforce the value that you bring to your clients.”
Find out more about Sage For Accountants and see how it provides a unified view of your clients, giving you access to data whenever you need it, as well as delivering bookkeeping payroll and compliance free of charge.
You might also be interested in
AccountingWEB’s Head of Branded Content joined the team in July 2021 to work closely with vendors and clients to help deliver engaging, original content for AccountingWEB members. As an experienced digital marketer, Jake understands the value and power of content to drive engagement and results. If you're looking for help creating compelling...