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IRIS CEO talks tech, customer service and MTD

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3rd Oct 2016
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Since becoming chief executive at IRIS nine months ago Kevin Dady has seen the UK vote to leave the EU, a change in government, the ramping up of the government’s Making Tax Digital project and a swathe of new software tools launched with the aim of disrupting his company’s place at the top of the practice tech tree.

At the company’s recent IRIS World event Dady spoke exclusively to AccountingWEB about how the company is responding to these myriad challenges, his plans for the future and where he sees IRIS fitting in with the world of the future accountant.

IRIS in the market

Traditionally serving the mid-market compliance heartland, Dady was bullish about where he saw the company’s future, and what it could offer customers in the new world of practice technology.

“We’re not trying to move away from our compliance heritage,” he said, “we need to make sure we’re still ahead of the game to be relied on for up-to-date compliance software.

“However”, he continued, “at the same time we can enhance this with different offerings that give our accountants the ability to create added value. We’re not trying to do our customer’s jobs for them, but we’re giving them an opportunity to diversify.”

New acquisitions

Dady used his IRIS World keynote to make good on the promises of diversified offerings with a raft of announcements, including the acquisition of forecasting software tool Gearshift, as well as a KashFlow partnership with fintech lender iwoca.

Perhaps the most eye-catching for seasoned IRIS watchers was the Gearshift move. The forecasting tool will integrate into fellow IRIS acquiree KashFlow to provide IRIS accountants with reporting and forecasting capabilities, enabling them to deliver high-value advisory services to their clients.

“We thought [Gearshift] would be a natural adjacency to KashFlow”, said Dady. “You can see the natural flow from cloud bookkeeping to forecasting, and therefore understanding what that means to an SME. We need to provide complimentary products in the cloud that will give our accountants unique traction not only to retain current clients, but attract new ones as well.”

Customer experience

Speaking about his experience at IRIS so far, Dady was candid about where he saw the company needed to improve.

“Customer service can be a great differentiator, and while there are things we do really well, there’s room for improvement”, he said. “It’s fair to say there’s been some underinvestment in terms of parts of our back-office systems, and our interaction with clients has at times not been as good as it should be”.

Dady put this down to the firm’s rapid growth and recent acquisitions, and to rectify this he announced an £8m investment in IRIS back-office customer service tools. While there is currently a lot of work going on behind the scenes, according to Dady customers should start to notice the fruits of those labours from February.

Making Tax Digital

IRIS has made no secret of the fact that it has been working closely with HMRC to help the Revenue understand the software challenges that accompany their digital revolution.

“It’s clear from the research we’ve done with our accountants that they embrace digital change, but in my view they’re cautious and worried about the pace of it”, said Dady.

“You could regard MTD as a threat; personally I think it’s a chance to up your game in terms of creating added value for your customers. But the only way we do this is to find solutions and technology to help you.

“I don’t think our role in this is to help our customers cope. It’s about helping enhance their offerings to customers. During the last 20 years we’ve helped our customers every step of the way, and we’ve got an education exercise to put in place to understand what they need with this.”

The post-MTD practice

In terms of what the practice landscape will look like after the government’s digital strategy has been implemented, Dady believes it provides a golden opportunity for practices to look at how small businesses are going to cope by helping them to grow their business.

“I’m guessing the majority of these businesses don’t have a huge amount of access to business partners, and I would suggest the accountant is well-placed to know a lot of the facts: they know what their financial performance is like, and with tools such as Gearshift they know what their performance is likely to be, so they can also see how digital tools can change that business’s performance.

“It’s about catering to a changing market. If my son, who’s 19, becomes a businessman, he’ll definitely expect to able to do it all on his smartphone, and therefore he’ll expect to be able to contact his accountant immediately and say ‘this is what I’m planning to do with my business, what’s the effect going to be?’

“Practices that understand that”, concluded Dady, “will be able to build on it and thrive beyond MTD.”

Replies (24)

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By RobertD
03rd Oct 2016 14:19

Well Iris hasn't rung me to ask if I "embrace digital change" nor any of the practices I know who use their software. Why let facts stand in the way.. after all what have Iris and Kashflow got to gain by it. The Iris assistants I've spoken to churn out the same lines as HMRC; accounts will have more time for higher value work. Again it is painfully clear that Whitehall, HMRC and the associations don't know what the impact of MTD will have and quite frankly the software companies don't care.

Thanks (9)
Replying to RobertD:
By Tim Vane
03rd Oct 2016 14:40

Of course the software companies care. They have a vested interest in pushing the MTD digital agenda as it means more sales for them. Let's not kid ourselves - the article confirms that IRIS are working closely with HMRC and Dady's remarks suggest that far from being disinterested they are encouraging HMRC to up the pace. How much of this whole agenda is actually being driven by the software houses is unclear, but there have been large scale meetings between HMRC and software houses going on for some time.

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Replying to Tim Vane:
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By RobertD
03rd Oct 2016 16:06

Tim Vane wrote:

Of course the software companies care. They have a vested interest in pushing the MTD digital agenda as it means more sales for them. Let's not kid ourselves - the article confirms that IRIS are working closely with HMRC and Dady's remarks suggest that far from being disinterested they are encouraging HMRC to up the pace. How much of this whole agenda is actually being driven by the software houses is unclear, but there have been large scale meetings between HMRC and software houses going on for some time.

I said that software companies don't care about the impact of MTD on businesses not they don't care about promoting MTD.

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Tornado
By Tornado
03rd Oct 2016 16:30

There is an air of concern in this interview that IRIS have been poor with customer service and a hint of desperation that if things do not improve, IRIS could be in a difficult situation. I think this is fair assessment of the situation for IRIS and is to be expected seeing how fiercely competitive the Digital Software Market will become if MTD goes ahead as proposed (it will not).

Unless every entrepreneur, landlord and company takes the time to qualify as Accountants, Bookkeepers and Tax Advisors, the fact is that even if there is wagonloads of MTD compliant software on the market, there still needs to be considerable skill required to use it, so, as Kevin hints, I can see that the role of the Accountant/Bookkeeper will be enhanced in the MTD age.

Even those who currently Do Tax themselves are going to find it difficult to use specific apps, which are more complex than the incomplete records they currently use (probably on paper) to complete their Self Assessment Tax Returns. More of these people are going to either turn to Accountants or Software suppliers for support, and I am doubtful if the latter will have the resources, especially for the 'Free' apps.

What I am not too sure about is the need for added software.
In my experience, every programmer wants to add features to their software because they can, but my priority is for good, cost effective software that is well supported and just WORKS when you need it to.

So as Accountants and Bookkeepers are now moving into seriously influential positions, who are people going to turn to for advice on the right software to choose?

As I have commented elsewhere in AW, developers and vendors will need to turn their attention away from wooing the Government to seriously wooing Accountants. No more derisory discounts for recommending software, Oh No, seriously good commissions and incentives will be the norm and those that offer the best commissions will get the most sales.

This is not my own approach, however, as the client always comes first and will be recommended the best software for them, but where there is not much to choose between packages, the bigger commission would probably sway it for me.

Tell me I am wrong.

It is clear that MTD has been pushed by vested interests to the point where it is obvious to most, but if the Government insist on progressing with their MTD plans then it seems to me that we all just need to go with flow and make as much out of it as we can (as long as our clients get the best service they can from us of course)

Whilst I personally would like the whole MTD project to be shelved or drastically slowed down, and find the whole way that it has evolved quite distasteful and incompetent, resistance would be futile if MTD proceeds, so going with the flow and making the most of it seems to be the only logical alternative.

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Tom Herbert
By Tom Herbert
03rd Oct 2016 16:55

Thanks all, some insightful comments as always.

We're doing our best to provide coverage of MTD from a range of different angles and sources: accountants, business owners, HMRC and software vendors.

Most of the people I've spoken with and the polls I've seen have agreed with the direction of travel in terms of digital tax, just not the timetable or mandation aspect of the MTD programme. IRIS themselves even came out last week and called the pace of change 'aggressive'.

Sticking roughly to the themes of the article, and at the risk of being labelled an industry patsy, I'll pose the following question (working on the assumption that MTD will be happening in some shape or form):

Given that government IT projects haven't always unqualified successes, and with budgets squeezed in an age of self-imposed austerity, is it not better to be working with the software industry to put together something that might actually work?

There's always the danger that the 'free products' touted in the consultations would put smaller businesses at a disadvantage, but I guess it's a balancing act between something that works and something that doesn't.

Thanks (1)
Replying to TomHerbert:
Tornado
By Tornado
03rd Oct 2016 18:20

"is it not better to be working with the software industry to put together something that might actually work?"

This just about sums it up. If the Government had included Accountants, Bookkeepers and other people working in the front line in the beginning, as well as software developers and 'consultants', we probably would have been looking at a much more practical approach to MTD. As it is, the Government have decided to deliberately make it difficult for Accountants to get involved with the project at an executive level, or just about anything to do with it.

I would also add that I hold the Government entirely responsible for the impending fiasco of MTD and accept that the Software Developers are only trying to run profitable businesses, which is what we are all trying to do anyway. It would have been better if someone involved in the MTD project had just mentioned that the key people to the success of the project were missing from the MTD team.

I think the last laugh will be on the Government, however, as in their attempts to sideline Accountants (and other professionals) all they will do is give Accountants significantly more power than ever before.

If the Government are going to dictate the way that accounts are to be kept, then who needs dozens of different accounts and tax programs anyway. All that is required is one piece of software, supplied by the Government free to anyone, with full support. This is surely the most logical next step. If that scares software developers a bit then I suggest you start to protect your interests and take immediate steps to actively discourage the MTD project otherwise you will be in deeper poo than us.

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By RobertD
03rd Oct 2016 19:23

Off on a slight tangent, this piece by Judith Knott. Some nice clear thinking.

https://judithknott.wordpress.com/2016/10/02/why-how-and-when-some-funda...

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Replying to RobertD:
Tornado
By Tornado
03rd Oct 2016 20:31

An excellent summary of the current situation from someone who has worked at the heart of Government, but still seems somewhat bemused by the MTD project.

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Replying to RobertD:
FT
By FirstTab
04th Oct 2016 09:51

Thanks for the link RobertD.

Thanks (2)
Tornado
By Tornado
03rd Oct 2016 20:28

“It’s about catering to a changing market. If my son, who’s 19, becomes a businessman, he’ll definitely expect to able to do it all on his smartphone,"

I would be careful about what you might wish for your son. If he spends long periods of time on his smartphone the chances are that by the time he is 30, he will be hunchbacked, have poor eyesight, perhaps have depression and possibly a serious addiction to his phone.

There are strict legal guidelines about the use of computers and monitors and I cannot see that forcing people to use phones to carry out significant amounts of data entry can be legal. A smartphone is entirely the wrong machine to prescribe as a practical instrument to run anything other than a small business and the Government need to take into account the more than possible serious damage to the health of the nation that their harebrained ideas might inflict on people.

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Replying to Tornado:
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By Ben Lauritson
04th Oct 2016 18:01

This was a point that stood out to me also; not regarding the health aspect but the expectation of being able to do everything on a smartphone.

As a so-called millennial (whatever that actually means) myself I think that while smartphones do have their uses, there does seem to be an over-emphasis on them to the extent that applications which are far better suited to laptops or desktops are being crammed into smartphone "apps" just for the sake of having a smartphone presence. It seems driven by fashion rather than by necessity.

While I do not know this individual's son, if he does expect that he can run his entire business from a smartphone then I might respectfully suggest that his expectations need revising. Smartphones are not the be-all and end-all that those with vested interests might desire them to be. They have their limitations and I can do a hell of a lot more, a lot more efficiently on a PC than I could ever do on a smartphone. Oh and don't get me started on the aesthetic degeneration as so many software designers decided to forsake pleasing pseudo-3D visuals in favour of the so-called "flat design", often with ugly grey colours to boot.

Or perhaps I'm just an old man before my time? "Wasn't like this back in MY day" etc.

Thanks (4)
Replying to Ben Lauritson:
Tornado
By Tornado
07th Oct 2016 13:43

I think the Tablet is already becoming redundant. I come to this conclusion as clients were often carrying them around when they came to see me but not any more. Hardly surprising really as who wants to lug around a tablet with them all the time.

I do see a trend to larger screen smartphones, but it remains to be seen if this fashion will change as well.

When I bought my first cell phone in 1989 (£1,000) I also got the hands free set for the car. It took only a short period of time for this to be removed as it became pretty obvious that you cannot deal with anything remotely complex by way of a telephone conversation whilst driving at 70 mph down a motorway. I have never used hands free since then (despite bluetooth fitted as standard in my car) for the same reason.

I find it quite bizarre that the Government are pushing people to do more with mobile phones through MTD whilst cracking down on their use in cars and suggesting a more restrained use for health reasons.

Also, will MTD be compatible with tomorrow's technology? If I had kept my first cellphone, it would be worth over £2.000 today .... but it would not work on today's cell phone network.

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By RobertD
04th Oct 2016 07:33

"There will also be exemptions for people with religious beliefs that are incompatible with using electronic communications"

Anyone know what religion could hold such beliefs?

Myself and my entire client base may have an epiphany and convert!

Thanks (1)
Replying to RobertD:
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By David Gordon FCCA
07th Oct 2016 13:06

Amish?
2)
As a traditional jewish person I will not use Facebook or Twitter or similar because I regard them as mainly used to be rude or derogatory about others, debasing ourselves, gossip and or inuendo.
and- inherently insecure.

There is however, for adult males, a painful initiation ceremony!

Be well.

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By Myshkin
06th Oct 2016 10:48

I don't have any clients not already with computerised software that could just purchase Iris and employ a trained person to use it without incurring considerable on-going cost (or indeed employing my firm to keep their records for them).

Whole concept is idiotic.

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By Peter-S
06th Oct 2016 11:16

The trouble with all the software providers spin and HMRC spin is it gives the impression that having digital accounts will make your business potentially better and free up time - questionable anyway but if all your competitors also have more time its back to square one. But of course this is BS anyway. Any digital accounting system is not going to give a taxi driver, window cleaner, ground worker, gardener, hairdresser etc etc any boost in their business. As we all keep saying its an additional burden. If they wanted accounts on computer they could do it already. If they wanted to know their tax bill in May they could bring their records to us then not the following January. If they want some profit forecasts they can already ask us for help now.
What benefit is filing regularly to the retiree with a couple of properties - he already knows his income - its the same nearly every month.
How in my business where I segregate payroll, fee invoices, petty cash, overheads etc so that my staff do not know everything is there a benefit of having to change to a system that probably means I need to duplicate bookkeeping work to put it all in some accounting program four times a year an advantage rather than just add up totals for vat purposes and year end accounts.
Sure some clients can embrace digital more easily than others and if its a practical proposition for them I'll go with it but there's so many one man bands out there that are being dragged in to MTD for no good reason and forcing computerised accounting, in whatever form, on to them will not make their life any easier or their profit declaration any more accurate.

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By youngloch
06th Oct 2016 12:34

Have any of you tried the smartphone apps yet? We use Quickbooks Online as our preferred cloud package and the computer based one is really good now but the Smartphone one is so basic it is practically useless. The Ipad one is not much better.

They're great for looking at the reports but for inputting, no thank you.

Considering we are 18 months away from implementation then unless there is a deliberate hold back on some fantastic new software then it's just not going to be fit for purpose in the way that HMRC are marketing things

Taking a photo of a bill will take even a seasoned pro at least a minute or so once they've reviewed analysis etc

Then it's a case of how was it paid, reconcile the accounts, do the bottom line figures look remotely sensible.....

My gut feeling is that with our non-elite clients who are working 60 hour weeks just to survive that the most we can hope for is that we can get them to generate their sales invoices using software and then leave the rest to us.

Sure, a millennial just starting up is likely to be keen to try to keep track of things themselves using an App/Software but the day will come when they realise that their time is best served out working, driving their business on rather than sitting down at the end of the day updating their accounts. They then have a choice, employ an assistant, bookkeeper or pass the task to their accountant.

Then imagine the client's delight at looking at their app giving them reports with real, accurate, meaningful data which they can rely on.

They can rely on it because they use an accountant to do it!

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By 0098087
06th Oct 2016 12:57

Love to know how clients are going to pay for all this. With Brexit causing turmoil and it looks like everyone will be poorer they are living in a dream world. I'm fuming about this I really am.

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By 0098087
06th Oct 2016 12:57

Love to know how clients are going to pay for all this. With Brexit causing turmoil and it looks like everyone will be poorer they are living in a dream world. I'm fuming about this I really am.

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By 0098087
06th Oct 2016 12:57

Love to know how clients are going to pay for all this. With Brexit causing turmoil and it looks like everyone will be poorer they are living in a dream world. I'm fuming about this I really am.

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Replying to 0098087:
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By North East Accountant
07th Oct 2016 08:21

0098087 wrote:

Love to know how clients are going to pay for all this. With Brexit causing turmoil and it looks like everyone will be poorer they are living in a dream world. I'm fuming about this I really am.

Totally agree.

Take a little sole trader looking at say Xero, £22pm + VAT and say Receipt Bank $33pm =Approx£52pm=£624 per annum just for his software.

This is massive cost increase just to give him the ability to keep his records, crackers!

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By smithaccounts
07th Oct 2016 13:03

As a small practice with a customer base of small to middle sized clients I cannot see any advantages to the changes proposed.

I am not against change that is carefully thought out and discussed and you can see the benefits. But MTD seems to have nothing going for it.

To me a logical step would be to make all self employed year ends the 5th April to coincide with the tax year. All tax returns to be filed electronically by 31st January and tax paid quarterly.

I am sure this would not cause any disruption to accountants, their clients and HMRC and be a logical first step towards a digital age.

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By Tim Robinson
07th Oct 2016 13:34

I had hoped to read something of the timescale that Iris has for updating their software so that it will work with HMRC's API. I am hoping that these will be available next year but the silence from the software houses is deafening.

Tim

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By RobertD
10th Oct 2016 09:11

Question Kevin Dady. I have to manually start the SQL server Agent for Iris Practice before I use it. I'm told my your staff that that's life. Perhaps you should be solving fundamental flaws in your existing software that I pay £4,500 p.a for before embarking on this new rubbish. Incidentally, I will be reducing my licence when MTD strikes.... so be careful what you wish for.

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