In-house books open the door to outsourced finance model
The latest AccountingWEB insight data underlines the growing adoption of online bookkeeping and data capture apps to cater for MTD ITSA workloads – but also uncovers a deeper shift in practice working patterns.
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"they hadn’t been prepared for the poor quality data received from clients, and the time their chartered accountants on relatively high salaries were having to spend cleaning the data before getting to the advisory gold at the end of the rainbow."
The problem with that KPMG attempt, and with those proselytising for MTD, is that they always assume that everyone is the 'same' as them (same motivation, same values, same priorities).
Whereas a common personality type (I don't have statistical %ages) of the small business owner - and even more within the self-employed cadre - is determined by a 'leave me alone' starting-point.
For such people there is every chance that they don't share the perception of "advisory gold" ... to them it will seem like an attempt to sell them 'rip-off' services that they never asked for - and often wouldn't accept these even if provided free.
And the "poor quality data" that someone is going to have to spend time "cleaning"? Well that's what they pay someone (as little as possible) to do ... not because they see this as important but because it's part of achieving insulation from the demands of big brother/government.
Surprisingly to promoters of these dream 'solutions', it's not common to encounter "No cash in the bank and £1m worth of debtors" ... not just because that's hardly a typical small business, but also because most owners are not stupid. The one aspect of finance that is innate in them is cashflow management, even if many wouldn't recognise the Mr. Micawber dictum.
What they want (minimum hassle, with resources & costs focussed on the business rather than on legislative compliance) equates to submission of returns with virtually no involvement from them + a few quick hints (often too late in the day) for how to reduce their tax bill.
None of this seems to align with the 'vision' being pushed by HMRC, by software suppliers and by digital 'gurus' ... who are looking down a different end of the telescope (or even an entirely different optical device).
The questions posted by non-accountants here on this site, under Any Answers, will be found to support my above hypothesis (irrespective of whether the OP leaves the thread a 'happy bunny' or a disillusioned carper)!
This is pretty much spot on. The businesses below c£1m of turnover would get benefits from the insights advisory can deliver, but find it difficult to look beyond the cost of it.
Our job as accountants is to keep the clients safe in a compliance sense and not to give that additional value away for free. If we as a collective reduce the leaking of added value we provide the clients as a collective will further understand that's the cost of providing additional value to them...
You are entirely right @Hugo about the prevailing psychology.
But there must come a 'tipping-point', no? A moment of: you can't beat it, so join it.
I have anecdotal evidence only: but every single one of my VAT-regd sole traders, who of course (for the very reasons you say) rolled their eyes at MTD for VAT, now over on the other side of the river see the benefits, and say it works better, saves them time etc. It's costing them more cash, but they feel it's good value.
I think what is so hard about the present position is that it is easy to believe (and many AWeb contributors make it more so) that there may be a further delay in implementation, or even a shelve. HMRC's track-record on this is unhelpful.
If there is to be a delay, then the naysayers are helping.
If there is not to be a delay, then the proselytisers are helping.
And vice-versa.
No cash in the bank and £1m worth of debtors – how can we fix that?
Surely a business with that level of debtors must have trained accountants working for them?
If not then they certainly should do.
After all, management accountants can offer vastly improved insight into the day to day running of the actual business, that could never be gleaned from outsourcing some processing?
(That's my pitch for "my side of the fence")
When KPMG launched that service, I recall responding and saying that it wouldn't last as small business wont pay a premium to have KPMG do their books. Its a completely different market.
I trained with KPMG and didn't do any bookkeeping. Indeed my double entry was appalling when I qualified, and I was one of the better ones.
We have lots of clients using cloud bookkeeping where suitable.
We also have lots who don't, as its not suitable for them due to either preferences or the size of business.
if I drew a graph for client use in my practice with "age" on the left Y axis and "digital use, low to high" on the X, it would run from almost 100% at 18 to 0% at 90.
I could do a similar one for transaction levels.
'if I drew a graph for client use in my practice with "age" on the left Y axis and "digital use, low to high" on the X, it would run from almost 100% at 18 to 0% at 90.'
And an exact opposite line for understanding what information is needed by an accountant to get some sensible accounts