Become an MTD champion
Regardless of what form HMRC’s Making Tax Digital (MTD) scheme takes, some firms are already planning ahead to mitigate the impact on their clients, staff and firm.
To prepare clients for the eventual changes, Paul Bulpitt, founder of the Wow Company and Xero’s head of accounting, has appointed one of his tax managers as the firm’s “MTD champion”.
Describing the position during Bristol's Xero roadshow, Bulpitt said the MTD champion had already responded to the consultation documents, and will aim to harness opportunities the digital tax change may present. Some delegates greeted his MTD champion description by outlining how they’ve created a similar role within their firm.
Bulpitt’s firm has started profiling their clients so they know which businesses it may hit worst. It has also categorised clients who are already using direct bank feeds, and captured who they should hook up.
Irrespective of MTD, the WOW Company’s profiling and client risk assessment follows Bulpitt’s pursuit of long-term planning and looking to the future.
His eagerness to prepare clients for the change is not driven by the necessity of the MTD timeline, but through imagining what working in practice will be like in five to ten years. “The move online is inevitable,” he said. “We’re beyond discussing whether the move online is a good or bad thing.”
However, the stark reality exposed by Xero’s State of Accounts survey shows that cloud adoption and technology underpins everything an accountant does, but the tech is not always infused into every practice.
For example, 86% of businesses are currently using cloud technology but accountants are not matching this figure. And worse, 55% of businesses surveyed believe that they won’t need an accountant in 10 years’ time.
Preparing beyond Making Tax Digital
Bulpitt, though, has embraced the supposed threat of automation, AI and new technology. Beyond MTD and its intricacies explored in the consultation documents’ small print, he sees automation and tech as an aide to practice growth. Bulpitt explained how the expansion of technology (such as automation and AI) is “fundamentally a good thing” because it expands his firm’s capability.
“Imagine being able to deliver real-time information to your client’s watch, imagine if a chatbot could answer simple queries for you, or imagine being able to book a meeting through a virtual assistant,” he said.
Throughout the session, he kept returning to how technology will assist the insight and the value accountants provide. “Our personal relationships are our competitive advantage,” said Bulpitt.
A panel of Xero and cloud accounting enthusiasts joined Bulpitt later on in the session to reveal what their firms are doing to embrace the changing technological landscape.
Stacey Morrison, who heads the Old Mill Group’s cloud accounting exploration, focused on educating staff members about cloud. “People are still resistant to change, so you have to be supportive of that. Without a legitimate reason, they will resist change. Be open with staff about why it will make their jobs easier,” she recommended.
Morrison also implemented mandatory cloud accounting training for clients. “If rubbish is put in, rubbish will come out,” she added. Bulpitt echoed this in what he is doing with his clients and staff. He advised to educate clients and look to plug any digital skill gaps sooner rather than later.
This also feeds into his hiring policy. If a firm anticipates that they will need staff due to the changes, Bulpitt recommends hiring in advance, so you can bed them into the firm before any digital changes take hold.
Sharon Pocock added that her cloud accounting enthusiasm developed by “being curious about what’s around you”. She recommended that firms who have not yet flirted with cloud accounting to see what other firms are doing.
Concluding the session, Paul Miller delivered a succinct wake-up call to anyone resisting the sweeping tech changes: “The train has already left the station. Get on board, or get off.”
Have you or your firm started preparing for MTD? Has someone within the firm taken on the role as an MTD ambassador? Have you begun educating clients about the changes?