MTD: Will spreadsheets be the new carrier bags?
With the usual caveats in place until after the election, Making Tax Digital will require all businesses to keep digital financial records.
This is good news for technology vendors as each now has both the pressure and opportunity to come up with a viable ‘MTD ready’ solution of some sorts; and underlined in spades at Accountex recently is the options out there. Probably with varying quality, and almost certainly with different audiences in mind.
What occurred to me when talking to attendees was that this potentially bewildering array of options could cause some issues.
The assumption seems very much to be that firms will be in the front seat - choosing technology for clients on the data collection side and ensuring integration at some level with internal workflow and practice management.
But there was much debate and consternation about what kind of client-facing applications were going to have to be deployed.
The general message was “whatever we choose could be irrelevant as clients will still end up doing what they want, and new clients may be reluctant to change from how they are currently doing things” - and there’s the rub.
For all the research you might do to help in formulating the best technical response to MTD, in the end unless you are very strict around what kind of technology you will accept and work with, it is very likely that you will end up dealing with a broad array of whatever clients are using.
This time though information might not arrive in boxes and carrier bags, but in spreadsheets. And most likely also via a range of apps too.
With the number of apps readily available on phones increasing - either as standalone, or connected to bookkeeping software, and the barrier to entry very, very low (which is one of the legitimate concerns around what ‘free software’ might be available), as a firm you could be dealing with MTD data coming in through every open window.
One pro-cloud Accountex veteran told me of a client that had decided to migrate from a spreadsheet to one of the available free apps, after previously downloading their firm’s app too and not really getting on with it. He now seemed to be unilaterally using all three, taking the view that as long as information was being captured somewhere then that was the most important thing as their accountant would sort it all out for them anyway.
Users will often decide themselves that something may or may not be working for them and just decide to switch at will, or use a range.
Locking down spreadsheets to an extent can help to keep a degree of order, but it’s still easy for them to become broken or otherwise abused - or more fundamentally just not filled in correctly. Because as Gary Turner recently explained “accounting remains hard for many small businesses”.
Soon the annual shoebox arriving at the office could become the quarterly sending in of a range of spreadsheets and requests to access app data.
So is there much we can do about this? The view from the Accountex floor seemed to be that we have to ask ourselves:
Will your clients make the transition from manual (or no) record keeping to a spreadsheet or app?
If they will, what controls can you put into limiting the amount of missing, or data you will have to repair on a quarterly basis?
What controls will you have to put in place to reduce the amount of data collection sources your clients use? Is this a policy position that you will have to communicate out and police strongly?
What will your approach be to new clients?