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MTD: Will spreadsheets be the new carrier bags?

26th May 2017
Director Principle Point
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Carrier bags
istock_AnthonyRosenberg

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:

  1. Will your clients make the transition from manual (or no) record keeping to a spreadsheet or app?

  2. 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?

  3. 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?

  4. What will your approach be to new clients?

Replies (25)

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By rboggon.yahoo.co.uk
31st May 2017 16:34

Decades ago I devised a spreadsheet cashbook which also tracks debtors and provides the figures for VAT returns.
95% of my clients use this, the other 5% using commercial s/ware. None are handwritten. This has worked fantastically well for them and me. I just need the interface for MTD! I imagine that the interface will integrate the s/sheet direct, and/or that the figures from s/sheet will be manually placed into the MTD interface. Both these methods will be done by clients themselves as I have a MTD page in the cashbook with all the necessary figures. Who needs commercial s/ware?

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Replying to rboggon.yahoo.co.uk:
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By johnjenkins
01st Jun 2017 10:19

23 years ago I subcontracted to an eccentric (unfortunately he is no longer with us). The first day he showed me his masterpiece being excel spreadsheets from data entry to full accounts, including journals. I have to admit it was nearly as good as VT. However most clients are frightened of paperwork (that's what they pay us to do) so I do not see the smaller business complying. So in answer to the question, No, spreadsheets will not take the place of carrier bags or shoe boxes. I tell my clients shoe boxes are far more stronger and easier to stack.

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Replying to rboggon.yahoo.co.uk:
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By D V Fields
18th Jun 2017 19:37

Agreed, the commercial software needs to be such that you want to change because the benefits outstrip your spreadsheet solution. Cannot see that changing with the main players anytime soon.

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By joolzjbs
01st Jun 2017 10:21

I have 50 small sub contractors and small non limited businesses, not one of them use any software at all, and I pull them together imputing all of the bank statements, purchases, sales and Payroll ( which I produce) I cannot see any change in this if I am honest, whatever way we go forwards, I still think they will be bringing all of their information in the pre requisite carrier bag for me to sort, but on a quarterly basis rather than each year. What does worry me is if the data cannot be imput onto HMRC software, how much the cost would be for me to buy software to use for all of these clients, especially when there will be an increase on what has to be charged for submitting the information on a quarterly basis. I had already taken on someone to help me part time in preparation for MTD, only for this to be put back , so I will be standing the cost for that this next year. On the up side, it will give me chance to try and train my clients on the lead up.

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Replying to joolzjbs:
Karen Lowen
By Karen Lowen
01st Jun 2017 10:50

Hi Joolzjbs,
My company produces software called dod-dle which is designed specifically for the type of client that you mention above.

Having been an accountant in practice for many years, like you, I believe that most of my clients will be resistant to change and I wanted a cloud based programme that they could get to grips with easily and quickly. I can therefore leave them to enter their details and then just check it though at quarter end. This keeps my fee the same to them with only a small cost on their part for the software.

Dod-dle avoids any accountancy 'jargon', has colour coded sections and does quite a bit of hand-holding including having an online chat. From the client's point of view, it produces simple sales invoices and automatically calculates CIS tax, if appropriate.

We have a free accountants hub service where you can add clients and view their accounts. We even pay a healthy commission to the accountant after the second sign-up. For the clients we offer a one month free trial.

Please give us a go and see what you think.

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Replying to Karen Lowen:
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By madhumorjaria
01st Jun 2017 17:23

Can you post a link to your website?

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Replying to madhumorjaria:
Karen Lowen
By Karen Lowen
02nd Jun 2017 15:05

Of course, it's www.dod-dle.co.uk.

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By lordburnside
01st Jun 2017 11:28

Some of my clients seem to be unable to write, some do not have computers nor wish to.

I am probably going to get these (non vat) clients to drop paper work in on a monthly basis and I will put it on a spreadsheet myself. Its a challenge!

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By mydoghasfleas
01st Jun 2017 11:37

I have noticed a fall off in the use of carrier bags by clients since the 5p charge was introduced.

I suspect we will receive a glut of ill considered spreadsheets prepared by clients no matter what we advise, recommend, cajole or provide, which range from a single column that does not add up correctly to colour coded monstrosities, that require Raybans and paracetamol to look at (fuschia and rose, apricot, peach, lime and raspberry are flowers and fruits, not colours for use in Excel) until HMRC forces the use of applications.

Funny enough I have a non-client in his 80's who prepares his tax calculation manually, takes into account different rates of tax, dividends, overseas pensions relief and gift aid relief, sends it to HMRC and then spends several months explaining to them why they are wrong and he is right (He is invariably). He is concerned that MTD will be beyond him.

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Replying to mydoghasfleas:
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By Rick J
01st Jun 2017 17:18

z

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By North East Accountant
01st Jun 2017 11:47

No matter how good the client there will always be massive amounts of tidying up to be done by the accountant.

The more that clients use different software the more headaches we will have sorting out the mess.

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By Lutondata
01st Jun 2017 12:32

Honestly! If HMRC thinks this is going to work they are living in planet Ivorytowers.

Most micro business`s can`t cope with keeping stuff in date order, let alone moving to electronic recording.

I also run an online accountancy with around 700 clients and its the bottom end that cause the most problems/headaches.

Double entry systems are like giving a machine gun to a child. Dangerous and totally pointless unless there is a basic understanding of the opposite entries.

We are looking hard at online accounting systems as we know we need to embrace this. But I really do worry!!

Its no good the client hoping his accountant will sort things out as the fees will just get silly and the relationship will become sour.

Just like AE. This has been dumped over the side of HMS "I have an idea" office.

I`ll go back to shouting at the screen again now. I think nurse is due shortly.

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Replying to Lutondata:
Karen Lowen
By Karen Lowen
01st Jun 2017 13:14

Hi Lutondata,

I understand what you mean completely. When I first heard of MTD I looked around for my clients like this and found there wasn't anything for them. Hence I decided to write a program for them and "dod-dle" was born.

It has been a challenge, as I wanted to write something stupidly easy to use, that has no 'jargon' and is handheld.

Please do have a look at dod-dle to see if it would suit your clients. I'm not a big software house looking to cash in, I'm just a lowly tax accountant that's written a progamme so that the type of client you describe at least has a chance of recording something for MTD.

We have an accountants hub, which is free, where you can sign up clients and view their accounts. For clients we have a free one month trial.

I'd be interested to know what you think of dod-dle so please do let me have any feedback.

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Replying to Karen Lowen:
By Lutondata
01st Jun 2017 16:54

Thanks Karen, I`ll have a look. Its not about the cost to us, its about maintaining clients without too much swearing going on.

We had Arithmo when they started and I spent more time sorting out queries on book keeping entries than I did making money. We have a large database and I want to keep it that way!

I`ll let you know what I think

cheers

Roy

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By listerramjet
01st Jun 2017 12:49

bad law - a disaster waiting to happen.

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By leon0001
01st Jun 2017 13:03

If there is a hung Parliament or Labour win, MTD is a Norwegian Blue duck.

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Karen Lowen
By Karen Lowen
01st Jun 2017 13:25

As an accountant in practice I share your pain. When MTD was announced I looked around for software to suit my clients, who tend to be the smallest of businesses that would struggle with 'doing their books'. The sort that have no knowledge of bookkeeping and I'm lucky if I get a sales list.

I didn't find any software that I thought they would be able to use, so I took the leap and wrote a cloud based programme that I thought they would be able to manage.

"Dod-dle cash" is a simple cash-basis system which avoids jargon, has colour coded sections and is designed to be very easy to use. For the client it will produce a simple sales invoice and has many 'back end' features, such as putting some entries into drawings. It doesn't do anything really fancy, but then my clients don't need anything fancy!

For accountants we have created a free to use accountants hub, where you can sign up and view clients. We pay a very good commission too, although I understand that this is just a side benefit, not an incentive.

I have told my clients that it narrows down to two choices:
1. I will do all of their bookkeeping and file their quarterly returns, but will charge for doing this (most of them would struggle to pay me more).
2. They can use dod-dle and I will review it quarterly and help complete their annual update and keep their fee roughly the same.

Please do all try dod-dle out and see what you think of it. Our website is www.dod-dle.co.uk and the link for the accountants hub is near the bottom of the page.

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Replying to Karen Lowen:
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By MissAccounting
01st Jun 2017 15:14

Karen Lowen wrote:

As an accountant in practice I share your pain. When MTD was announced I looked around for software to suit my clients, who tend to be the smallest of businesses that would struggle with 'doing their books'. The sort that have no knowledge of bookkeeping and I'm lucky if I get a sales list.

I didn't find any software that I thought they would be able to use, so I took the leap and wrote a cloud based programme that I thought they would be able to manage.

"Dod-dle cash" is a simple cash-basis system which avoids jargon, has colour coded sections and is designed to be very easy to use. For the client it will produce a simple sales invoice and has many 'back end' features, such as putting some entries into drawings. It doesn't do anything really fancy, but then my clients don't need anything fancy!

For accountants we have created a free to use accountants hub, where you can sign up and view clients. We pay a very good commission too, although I understand that this is just a side benefit, not an incentive.

I have told my clients that it narrows down to two choices:
1. I will do all of their bookkeeping and file their quarterly returns, but will charge for doing this (most of them would struggle to pay me more).
2. They can use dod-dle and I will review it quarterly and help complete their annual update and keep their fee roughly the same.

Please do all try dod-dle out and see what you think of it. Our website is www.dod-dle.co.uk and the link for the accountants hub is near the bottom of the page.

No offence, ok ok maybe a little offence, but coming on here and spamming your software isnt going to go down well with accountants! Youve posted the same thing 3 times in this post alone?!

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Replying to MissAccounting:
By Lutondata
01st Jun 2017 17:04

Karen, I`m not bothered about you pushing your stuff, but at £20 a month its more than QB or Free agent? They have huge teams to support end users. We considered Sage but their support is dire.

You really are competing with some major competition here aren`t you?

The other problem is that whilst you have named the product with a fun title, I`m not sure I would want my firm to be associated with it? The inference is that's all a bit amateur?

I can`t see the USP?

sorry

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Replying to Lutondata:
Karen Lowen
By Karen Lowen
02nd Jun 2017 15:11

Dod-dle cash is £10 a month plus VAT. The USP is that our product is designed for users who would otherwise struggle to use a bookkeeping programme. As such it is written in plain English and has been made as simple to use as possible.

I'm sorry you don't like the name, it was chosen to reflect the product, the inference being that it is simple and easy to use. I can assure you that we are a very professional company and I'm sorry if that is not how you have perceived us.

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Replying to Karen Lowen:
By Lutondata
02nd Jun 2017 15:35

Hello Karen

I, for one applaud your efforts to get your product seen, that really isn`t a problem with me. Although this post is about MTD rather than book keeping systems alone.

I meant to be constructive and I think I came across aggressive, I`m really sorry.

The price is £20 plus vat a month. Lets forget about anything else. But, if yours is that easy to use and you have a team to answer user queries direct then it may be worth it? The caveat is that QB, Xero, Freeagent, Sage, Kashflow all have dumbed down systems and an army of personnel to back them up.

As a firm we would pay a lot less than £20 plus vat for bulk licenses.

I admire the belief in your product and maybe you are smiling with self content. I hope so as I would rather see a homegrown product score than a corporate.

Good luck

Roy

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Replying to Lutondata:
Karen Lowen
By Karen Lowen
02nd Jun 2017 16:07

Hi Roy,

Thank you for your comments and kind words. 'Dod-dle cash' which we launched at Accountex this year, is £10 plus vat per month, our full accounting version, simply called 'dod-dle' is £20 plus vat per month.

We offer accountants a 10% commission from the second account signed onwards. I appreciate that some of the bigger software companies can offer bulk packages and offer simpler options, but think even simpler than that.

We do have a team to answer queries and we have an online chat facility available during office hours, plus a contact form. I like to think that, being a small company, we can offer a more personalised response and we really do care about each and every user that we have.

I do hope that you'll have a look at our free trial and let me know your thoughts. It may not be right for all your clients, but if you have the type of clients mentioned in the article above, like I have, then it is certainly worth a shot I think.

Regards
Karen.

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Replying to MissAccounting:
Karen Lowen
By Karen Lowen
02nd Jun 2017 15:07

Please accept my apologies if you're feeling a little 'spammed' that was never my intention. I just want to let other accountants, in a similar position, know that there is something for them.

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By Rick J
02nd Jun 2017 17:07

About 20 years or so ago I wrote a piece for The London Accountant magazine on a similar problem for accountants when the first computerised accounting programs came in (Sage and suchlike) I wrote then that what was coming back from clients was the equivalent of the old brown paper parcel jobs, and referred to these optimistic backup disks coming in as "Brown Paper Disks". As the OP suggests, this can now be updated to "Brown Paper (or now plastic bagged) spreadsheets.

The client will give us now (instead of a disk) a spreadsheet with more than you could or would need, and will tell you that there is no problem as "everything is in there" Well, yes it will be, sort of, sometimes even twice or more. For example, car HP payments will still be entered under motor expenses, motor vehicles, and heavens knows where else, and no attempt will be made to split capital from interest. Or are they lease payments? Who cares, the accountant can deal with it. ("Oh and I can get 45p a mile as well, can't I?") I've even come across spreadsheets where the totals are just numbers typed in because the client doesn't know how to use the totalling formula.

So yes, it will "all be in there" for sure. But getting it into anything like an MTD-able submission will be like trying to get the milk back out of a cup of coffee.

Happy days ahead, colleagues. If I wasn't thinking of retirement quite yet last year, I certainly am now!
Richard Joseph

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By AndrewV12
14th Jun 2017 12:43

Its comes back to what I have always said, forget all this nonsense just make sure your clients receive all sales and make all business purchases out of a designated bank Account.

Then the spreadsheet comes into its own, Its very easy to prepare accounts from that, who needs all of the accompanying paper work.

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