‘In the midst of chaos, there is opportunity’ so said Sun Tzu. While the present situation in the world of accounting & bookkeeping services can by no stretch of the mind be likened to chaos, it is easily acknowledged as a state of flux. It is this constant state of change that presents accountancy firms the opportunity as well as the need for differentiating to steer ahead into the future. The options present before accountants are manifold, and the challenge lies in embracing change and implementing it. Here is a roadmap for accountancy firms that can take the service to the next level.
Taking service beyond calculations to offer critical business insights
The time has come to shake off ideas about accounting. Accounting needs to go beyond mere number crunching and regulatory compliance to offer value addition to clients in the form of business insights. While this has been used effectively by large conglomerates, the smaller businesses tend to look at accounting as merely a requirement for transaction based activities or for routine accounting. Offering insights to businesses on related areas or aspects, may have been a tough ask a decade ago, before the era of established automation and cloud computing. As processes are increasingly automated, accountants now have the resources to re-focus, and deliver value additions.
Of what real use is technology, if the saved time and resources are not used to deliver greater value to the processes and objectives?.
Embrace technology for solutions that are cost effective and convenient
Technology has advanced to levels where it is possible to considerably speed up the processes and deliver solutions in a more cost effective manner. The cloud has opened up the whole accounting services platform to multiple benefits. Advantages of secure storage, easy access, scalability and cost effective services are a reason for the exodus of sorts to the cloud. The cloud has now become the standard, and not an option anymore. Accounting firms have no choice but to use the cloud for bringing in the twin advantages of convenience and cost effective solutions. Similarly, the ‘age of the mobile’ and the ‘planet of the apps’ makes it imperative for accounting service providers to offer solutions that can be accessed through mobiles. Accountancy firms can use cloud software’s to manage services like payroll, bookkeeping, and many more.
Early adopters of technology hold the advantage of learning the ropes better and being fully prepared to implement solutions.
Supporting the transition to the post-Brexit era
Businesses will need accountants more than ever before as they negotiate new agreements in the post-Brexit era. Meeting the new compliance and regulatory requirements will require the expert knowledge of qualified and certified accountants. This will present the ideal opportunity for accountants to compensate for the possible dip in revenues due to the EU exit. However, the shock of moving into a post EU phase will be softened by the surge in requirements for accountants to help businesses set up shop in the post EU phase. Accounting services need to be fully aware of all the regulations in force and the overarching effects of certain rules which need to be read and interpreted in conjunction with other applicable laws. This expertise will be in great demand and accountants need to be ready to offer complete consultancy and advisory services to businesses.
The inevitable is bound to happen, and it pays to be not just ready for it, but to make the most of it.
Ensuring compliance with data protection laws
This will not fall into the category of differentiation, but will most certainly be mandatory. Privacy laws and data protection regimes are being implemented globally and accountants need to implement the same. As custodians of client data, that is far more important than a business lead, it is the bounden duty of accountants to ensure that the financial information is safe. This means that the use of technology to improve deliverable needs to be chosen with great care. The cloud will be the defacto platform for most services, and accountants need to take care to ensure data protection practices are in place at the cloud hosting service. The new regime of data protection fixes varying levels of responsibilities on all stakeholders mandating the need for strict compliance.
Data protection as a collective and individual responsibility renders it as one among the more comprehensive yet all important regulation that needs to implemented for survival in the new order of digital transformation.
Stay abreast of rulings in tribunals about contract law determinations
IR35 determinations in the UK have widespread ramifications on independent contractors and the situation is bound to only increase post-Brexit. This makes it necessary for accountants to be aware of the latest rulings in tribunals on appeals filed by contractors who have been determined to be within the IR35. By following rulings on contested determinations, accountants will have a better grasp of the law and its interpretation by the tribunals. This perspective will lend great knowledge in helping contractor clients to negotiate terms with end user clients. A comparison of the interpretation by the tribunals and the sometimes flawed interpretation by the HMRC will help accountants interpret unique contractual clauses in a more informed manner.
Expertise in IR35 law and its interpretation is more by way of accretion – acquiring knowledge through interpretation of conflicting imperatives in contracts.
Taking a granular approach to auditing
Auditing has remained an exercise that is most comprehensive in nature. However, despite its comprehensive processes, there are many areas that have been left out of auditing due to the sheer volumes involved. Consequently, random transactions have been verified in the past, during the audit trail. With technology becoming the force multiplier, audit processes should move into the next level covering entire transaction history. And as all the roundtables suggest, investors and shareholders demand more insights the ‘binary’ audit results prepared by auditors. In other words, recipients need to know more about the ‘how’ and ‘why’ of a report. They need to offer insights about how conclusions were made, with background information. All of this means that auditing needs to be more granular than ever before, leveraging all technological innovations to fulfill expectations.
Technology as the enabler of solutions needs to be leveraged to meet expectations of end users of solutions.
Having systems in place for MTD (making Tax Digital) deadline of April 2019
This is another compliance aspect that needs to be met by April 2019. Accountants who have been offering VAT registration assistance to clients need to offer this service additionally to help clients transition to the MTD scheme. This will also be the stepping stone for the scheme which will cover all taxes in a phased manner over the years. To offer this advisory service/consultancy, accountants need to be on top of their game when it comes to using the right technology and processes to meet the requirements. The need for compatible software and updated records needs to be viewed in the larger context of other data entry requirements, and use of the cloud. Utmost security is needed for payroll and data transfer services. Accountants need to offer services that not only meet this specific requirement, but in a manner that will not affect other processes, while at the same time preparing for transiting to the full MTD scheme in the future.
Digitalisation offers benefits; however, significant effort is required for making the transition seamlessly.
Accounting services in the future will be a lot different from the stereotypical notion of services. In addition to the number crunching processes and compliance with regulatory bodies, accounting services of the future need to offer greater contextual information to clients. In a data driven world, where businesses are no more transactional, but relational, the importance of data and insights needs no emphasis. Automated processes and cost effective cloud solutions will be the differentiators of today, but the new order of business tomorrow. And to be ready for the new order of business, accountants need to fully make use of differentiators today.