For the past few years, AccountingWEB and its members have occasionally taken tax and practice software developers to task for their failure to innovate. The last Big Idea - integrated suites - has been around for more than 15 years, and even end-to-end processing from trial balances to final accounts and tax returns is still seen as something of a novelty.
But there is a reason for this apparent inertia. Almost on an annual basis HMRC and its paymasters cook up some new prank to inflict on the profession, from abolishing facsimile returns in 2010? To iXBRL, real time information, auto enrolment and, for the next few years at least, the looming spectre of personal tax accountants.
While wrestling with all these compliance challenges the industry has also faced major changes in the structures that underpin it with the advent of cloud computing. Instead of every user running a mainframe on their desk (as Bill Gates postulated), we are entering the era of utility computing, where experts in far off data centres keep the processing powerstations humming and ordinary users log in via the internet to conduct their day-to-day business.
While accountancy practice tools have resisted the cloud surge, at some point they will succumb, and the likelihood is that it will happen this year. Early adopters such as Taxfiler (& Gbooks) have staked their claim, while desktop cloud providers FreeAgent and Xero are hovering on the fringes with bits and pieces of tax and practice functionality.
But the big race is between the industry giants. Once IRIS and Sage woke up to the cloud threat, they have both put their massive resources behind a managed transition where they can support practices that are keen to move to the cloud, while still catering for those who prefer to maintain their desktop systems and servers. Smaller suppliers such as BTCSoftware are hot on their heels.
It’s an even-money bet whether Sage or IRIS will turn up the first complete cloud suite including bookkeeping, final accounts and tax tools. But pay close attention to what they have to say around Accountex time, or at their early autumn roadshows.
Against that backdrop, AccountingWEB asked some of the leading players in the market for their predictions about the year ahead. Here’s what they had to say.
Acorah Software Products (TaxCalc)
"The exciting thing for us in 2016 is the release of TaxCalc Cloud Connect. It’s our unique take on cloud and will be going to beta in the first quarter of 2016. The service will store client data in the cloud but you’ll be able to access it from your desktop software. As a result, customers will receive our usual rich user interface but since it’s only data being sent to and from the server, it will be fast.
"We will also release an update to TaxCalc Client Hub which manages clients and features task management, mail merge, reporting and you can data mine your database. The update, due later this year, will be driven by customer driven improvements. We want to build upon the suite and keep introducing new modules on the platforms.
"Continual improvement is important to us and we demonstrated that with with Accounts Production at the end of last year. We released a substantial update that not only added new compliance such as FRS 102 for small companies, but also introduced some exciting features like a drilldown function built into the accounts and gave practices more control over charts of accounts and template notes.
"We will go to market with the 2016 update to TaxCalc in March. The HMRC API strategy is going to manifest itself in the software for the purpose of creating tax returns from 6 April. I think there’s going to be something of an arms race to apply HMRC’s APIs in their software, especially future more useful ones and TaxCalc will have the first batch in our software.”
"BTCSoftware’s award-winning practice management software, PM Solution, is now seen as key to the day to day management of an increasing number of small to medium sized practices but we’re not resting on our laurels. In line with our policy of continuous improvement our developers are working on a whole range of refinements and new features – many of which result directly from users’ suggestions.
“2016 will see the progressive roll out of our all new cloud product range which will of course include practice management. This will be available on the same great value pricing structure as our on premise software. But for those practitioners who prefer not to move to the Cloud we will continue to offer the existing on premise solutions.
“We are working closely with HMRC and their plans for digital tax accounts. We see our role is to inform their thinking, represent the interests of our users and ultimately to ensure PM Solution will be the software practitioners can rely on to support them and their clients in this new era.”
Rob Ellis, director, BTC Software
“Digita intends to implement a number of plans aimed at helping to enhance practice management software during 2016. Firstly, we will be releasing more standardised reports containing software specifically targeted at KPIs within a practice. The aim of this advanced reporting is to help accountants meet with any service level agreements they have in place, and help ensure the work they complete is profitable.
“Through enhanced mail merge solutions, accountants will be able to take advantage of the valuable data within their main client database. This will help them create personalised and bespoke letters and emails en masse and ensure that their accountancy practice is at the forefront of their clients' minds when making strategic business decisions.
“Furthermore, within Digita's Advanced Practice Management module, we have a series of reports that can highlight both profit and growth trends within the accountancy firm. Being able to see margins on payroll v consultancy v self assessment returns, for example, will help accountants focus their efforts on the areas that gain the greatest return on investment.
“Finally, there currently is a large emphasis towards accountancy firms being in more regular contact with their clients. But how can practices be sure clients are getting the right amount of attention? Digita Practice Management can create a series of dedicated reports that clearly highlight the frequency of which clients are being contacted and record what has been discussed. This will help with being able to target additional fee earning opportunities and also provide business-owning clients with confidence that their accountant is on their side.”
Ian Cooper, technology architect, Thomson Reuters (Digita)
"Practices are a little uncertain from a tax perspective because of the HMRC changes with the digital tax account, so accountants are going to focus more inwards. They’re going to focus on their own profitability – they’re going to want to understand their own management data. From a practice point of view, they’re going to start to look at the ways they run their practice.
“Is it a case that that they are still using spreadsheets to run their monthly partner meetings? Is there a better way of getting the information rather than waiting a week or two to get all of the consolidated view on to the spreadsheet? Moving to the latest dashboard technology would give them a complete view of the practice in real time.
“Their biggest challenge for the next 12 months is gaining new clients and providing new services to their existing clients. This is all born out of the fear that the digital tax account is coming from HMRC and it’s going to reduce the role of the accountant. They need to evolve themselves beyond the standard role of an accountant as a reporter of compliance to being a planner and adviser to whole business.
“The IRIS Accountancy Suite covers the compliance but also the productivity tools. This includes IRIS Practice management which allows you to run all your jobs; IRIS time allows you to do time sheets for historical time based revenue model; IRIS fees allows to generate fees and send them out; and Data mining which allows campaigns marketing out to customers.”
Steve Cox, director of product management, IRIS
"At PracticeFlow we believe in investing in qualities that endure, which is why in 2016 we will be doubling down on making PracticeFlow faster, more robust, and with even quicker response time to support requests—our promise is that your questions will always be answered by someone who can directly solve your issue.
"Based on feedback from our customers on what would help them most, we will also be adding a number of new features in the near future:
- More detailed Excel reports for upcoming deadlines,
- Templates for tasks, which would allow for quicker onboarding of new clients,
- Integration with the most popular time tracking solutions,
- With much more to come based on our customers' ongoing feedback to us.
"Currently, the customers who are benefiting the most from PracticeFlow tend to be those who are just starting to bring on new staff and are outgrowing a manual or Excel-based method of tracking deadlines and work assignments. We feel that this segment of growing practices has traditionally been neglected by practice management software providers, and so in 2016 we are reaffirming our commitment to growing practices in the UK who are seeking a cost effective solution that will allow them to scale up their business."
Stefan Haflidason, CEO, Practice Flow
“The big thing in the marketplace is that people should be going onto cloud, but you have to appreciate that customers want to do it at different speeds. For people who aren’t ready yet, it’s about educating them how cloud can benefit their customers.
“Anywhere there’s more than one partner or director, you tend to find one partner is forward thinking, but there’s another group that is less keen. We tend to find cloud adoption happens in one or two of partner portfolios. So convincing the other partners is the biggest challenge. Sometimes that comes to a point where those forward thinkers split off on their own.
“Probably the biggest challenge accountants in practice face is not just using the cloud to offer additional added value to exist client base, but how to go out and win new business to get out of the compliance mire.
“Because we sell our products via accountants to their customers, we’re doing everything we can to help accountants go out and win new business - hopefully with intention of using Sage.”
Nick Longden, vice president Sage Accountants UK & Ireland
About John Stokdyk
John Stokdyk is the global editor of AccountingWEB UK and AccountingWEB.com.