Accountants Archives - Page 2 of 3

Events have a habit of overtaking discussions. In my first article in this series, I discussed the pros and cons of automatic bank feeds. In the second, I examined how you can use your accounting software to reduce the need for automatic bank feeds, and the third discussed how automatic bank feeds can be used effectively by accountants. Since then, ‘open banking’ has come about as a pressing topic and has ramifications for everything I have discussed so far.

What is open banking? According to Richard Evans of the firm Crowe Clark Whitehill, it is “a software platform that allows a customer to compare prices of different components of banking services – for example, clearing, payments, investments and use of different providers for different services on one platform”.

These platforms will emerge on the back of the Competition & Markets Authority (CMA) review, which concluded that large retail banks do not do enough to be competitive with each other to attract customers from each other. In parallel, in 2015 the EU passed the second Payments Services Directive (PSD2), which stipulated that banks had to make Application Programming Interfaces (APIs) to open up all their data and infrastructure to third-party companies by 13 January 2018. And Brexit will not mean an opt out for British-based banks.

In real terms, for the accountant, what are the ramifications of all this? In short, cloud-based accounting will evolve once more with, in all likelihood, the banks themselves developing online accounting services so as to remain competitive with each other as well as third-party accounting software packages such as Xero, Sage and Diamond Discovery. This could theoretically lead to people managing their accountancy services through their bank, directly with HMRC. And in such a scenario, who would need an accountant?

As you’ll have gathered from my previous articles, I think new technology provides opportunities for the accountancy sector as well as threats, but open banking does seem to pose a genuine and real existential crisis right across the profession.

APIs are useful things to software developers. They allow the programing code of different software packages to be visible and adapted to other pieces of software, creating a new unified product in the process. Examples of this include Hootsuite, which allows marketers to control different social media channels from just the one screen, and Uber, the infamously disruptive cab-hailing service that uses mobile phones’ GPS to unite potential passengers with potential drivers. Done right and done effectively, APIs can upend an industry overnight; just ask a London cabbie.

There is a faint silver lining for the progressive accountant: they can now develop their own bespoke software if they so choose, to meet their clients’ needs. However, development can take time and money, and the accountant should consider the ROI of such a strategy.

None of this will have escaped HMRC’s notice. What could be more appealing to a government or a state than having the ability to monitor its own citizens’ bank accounts in real time for tax gathering (and other) purposes? Maybe that is a little paranoiac, but you don’t have to be Franz Kafka and favour green ink to acknowledge that the technology and legal framework now exists for governments to access bank accounts directly via the APIs that the banks are forced to disclose under new legislation. Indeed, HMRC itself is rapidly developing a whole suite of online applications that cut out the middle man between bank account and state; namely the accountant.

So, what is to be done? As I keep on reiterating, it is important for practising accountants to modernise their processes across the board, to reflect the rapidly changing technological backdrop to the sector. Even if an accountant chooses not to adopt a new technological process, they will need to at least be aware of it and have a rationale for not adopting it (and not all new technology is necessarily desirable technology). At the very least, an accountant should look to embrace cloud accounting, as the principles behind it will inform the processes and behaviour of open banking in the longer run. To be brutally direct, we have now reached a point in accountancy where it is very much ‘adapt or die’, and I feel I can write that without fear that I am resorting to hyperbole to get my point across.

As a software developer myself, I am happy to talk to any accountant who wants to know what open banking and technological change mean for their specific practice, and advise them on the robust steps needed to modernise their services for the 21^st century.

For more information on technology that can help with your accountancy services visit www.preludeaccounts.com, call 01656 725800 or email info@preludeaccounts.com.

Prelude Accounts can also be found on Titter via @PreludeAccounts / https://twitter.com/PreludeAccounts.

In my first article in this series, I discussed the pros and cons of using automatic bank feeds, and in the second, I examined how you can use your accounting software to reduce or even eliminate the need for automatic bank feeds. In this third article, I want to examine how automatic bank feeds can be used effectively while avoiding the reservations I have previously expressed about using ‘screen-scraping’ software.

Automatic Bank Feeds 2017 Part 3: The Best Of Both Worlds? — *Businessman stressed by too many tasks works in the office*

Whether I like it or not, automatic bank feeds are now a permanent fixture in the accountancy landscape, certainly for the foreseeable future. Given this, how can such software be used to good, robust and reliable effect?

In other words, is there a ‘best of both worlds’ scenario, where accountants can use automatic bank feeds while adapting existing processes without any professional compromise?

To my mind, the best use of automatic bank feeds is as a check or as a reassurance that your work is accurate and correct – i.e. to populate bank reconciliation. Some may think this to be a duplication of work (i.e. enter and import bank transactions), but bank reconciliation is just that, and automatic bank feeds allow you to obtain transaction data from a bank account quickly and easily. Having said that, I have previously noted that most banks allow you to export such information as a CSV file without the need for automatic bank feeds. So the above suggested use of bank feeds is unnecessary if you’re prepared to put a little bit of work into your existing systems and processes.

You may be using or considering automatic bank feeds due to client expectations and professional peer pressure. While such things should not encourage you to cut corners or avoid necessary work, to be competitive you too may want to advertise the fact that your practice uses automatic bank feeds. Prelude Accounts is currently talking with new potential partners about providing such functionality with safeguards in the context of the arguments presented in these articles and, importantly, avoiding screen-scraping methods.

In any event, you should think carefully about just how much you actually want to automate your role, as you may end up making yourself effectively redundant, at least in your clients’ eyes. It is becoming increasingly apparent that HMRC is looking to deal with businesses and individuals directly, bypassing accountants in the process. Their method of doing so will be through the internet, apps and associated software. A cynic could say that this would precipitate a surge in accounting and reporting errors with a resulting increase in the Exchequer’s revenue, but I couldn’t possibly comment. Whether or not this strategy proves successful, your clients are increasingly going to be asking if they actually need an accountant if everything ends up being either semi or fully automated. Why would anyone be willing to pay accountancy fees if an accountant is no longer needed?

I would therefore urge accountants to be proactive in investigating new technology including cloud accounting solutions, as they will need to see how they fit into this brave new world. To help you, I will continue to voice my opinion and advice through this blog and articles for the ICPA’s Accounting Practice magazine. In this changing landscape of software innovation, consider that the context should not be just how it can make your life easier, but how it can help you to maintain your service as trusted and indispensable to your clients. What do you offer that cannot be replicated by software?

In this series of articles, I have given examples and arguments as to how a forward-thinking accountant can ‘future proof’ their job in light of automatic bank feeds and other software and processes – make sure you note them, and build them into your sales narrative with your clients. If accountants are not careful, they will end up as just software resellers, licensing software to their clients who will then be tempted to cut out the middleman and deal with the software vendors directly. It is therefore important for accountants to work with companies such as Diamond Discovery to modernise accountants’ processes while not eliminating the need for the accountants themselves. Failure to react (positively and prudently) to automatic bank feeds and other new software could leave you behind the times and perceived as archaic as the abacus.

For more information on technology that can help with your accountancy services visit www.preludeaccounts.com, call 01656 725800 or email info@preludeaccounts.com.

Prelude Accounts can also be found on Titter via @PreludeAccounts / https://twitter.com/PreludeAccounts.

Are you affected by the announcement that VT is ceasing development of their Transaction+ product?

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In my last article I reviewed the pros and cons of using Automatic Bank Feeds software given changes in the market for these services and the inherent risks in the screen-scraping techniques used by some service providers.

Automatic Bank Feeds 2017 Part 2: Use Your Accounting Software — *Can you already replicate automatic bank feeds in your existing accounting software?*
*(Image via Fotolia)*

In this article I want to explore using features that should be available in good accounting software to remove or at least significantly reduce the need to import bank transactions.

Accounting software should offer three essential ways to enter transactions: manually, scheduled, data import. Of course, automatic bank feeds is a specific example of data import. Depending on the nature of a business’s activities, a combination of these can be used to enter banking transaction efficiently without the need to subscribe to additional bank-feed services.

For businesses that process customer and supplier invoices, when the payment date is known (e.g. agreed terms, paid by credit card, BACS or scheduled payment), with just a few more clicks the payment can be posted at the same time the invoice is posted. Prelude Accounts offers this functionality.

With regular payments and receipts (i.e. direct debits and standing orders), bank transactions can be anticipated and so entered in advance on a defined schedule. For example, outgoings such as rent, business rates, mobile and broadband fees can easily be anticipated in advance. We will soon be refining these features within Prelude Accounts.

I would be surprised if there are many (if any) retail banks that do not offer an online banking facility. Those that do will probably also include a facility to download transactions in a useable data format, e.g. CSV. Good accounting software will offer import/export of transactions. Surely it makes sense to utilise these features offered by banks and accounting software. Effectively it will replicate the so-called “unique” selling point of automatic bank feeds and importantly it will do so without violating your or your clients’ banking terms and conditions (see previous article). Prelude Accounts provides CSV import as a key feature, and we encourage our customers to make more use of it.

Of course, as I have said before, it remains vitally important not to mistake importing bank transactions, manually or automatically, with bank reconciliation. The former can be optimised with such features as described above, but care must still be taken as it is easy to duplicate or enter wrong transactions. Bank reconciliation will identify this and could thereby help to identify process improvements; it is a key business control (to confirm that you and your bank agree on how much of your hard-earned money the bank holds) and should not be automated. In fact it cannot be automated, as the moment it is automated, it ceases to be a business control as no actual oversight or interrogation is undertaken.

With MTDfB being inevitable in some form or other at some time or other, accountants must engage with all their clients to use accounting software effectively. This is essential to ensure that the proposed increased frequency of reporting to HMRC does not result in significant increased work for the accountant, the full cost of which could not be passed on to clients.

Take this as an opportunity to review processing of bank transactions with your clients. I think you will find that the best approach will be to use the time-saving and regular/scheduled features of your accounting software combined with CSV import to its bank reconciliation feature. It is a matter of finding the best balance of processes with your clients, depending on their business needs and competences and being mindful that, with cloud-based software and online banking, the workload can be shared between clients and accountant.

Check out the features that your accounting software provides, understand it and ensure that it will work for you, and share this knowledge with your clients.

Notwithstanding all the above, I acknowledge that there will be some circumstances – client business type, accountant/client preferences and competences, unwavering desire to automate everything that moves – for which automated bank feeds is a must. With the removal from the market of Bankstream (their “bank-authorised data feeds” having been acquired by QuickBooks) along with our aversion to the use of screen-scraping techniques for well-documented reasons, we are looking to partner with a service provider named OCRex. Watch this space…

For more information on technology that can help with your accountancy services visit www.preludeaccounts.com, call 01656 725800 or email info@preludeaccounts.com.

Prelude Accounts can also be found on Titter via @PreludeAccounts / https://twitter.com/PreludeAccounts.

A New Year, and it seems the world is getting more automated with each passing day. I’ve written extensively in the past about the opportunities and threats posed to accountancy by emergent technologies, but I would now like to focus on the current status of Automatic Bank Feeds in 2017.

Automatic reconciliation — *Are you looking to automate your accounts?*
*(Image via Fotolia)*

In previous articles I have explored what Automatic Bank Feeds means, i.e. a software-driven process that sets out to substantially automate the input of banking transactions into accounting software and the reconciliation with statements provided by the bank. Different software providers use different technologies to achieve this, some with and some without the source banks’ knowledge or even permission.

I sometimes think of automatic bank feeds as the mythical siren singing from the rocks; attractive but potentially disastrous. While some providers of automatic bank feeds do so in partnership with the source banks and are therefore legitimate or ‘bank-authorised’, there are others that exist in a grey area contractually and possibly legally. These providers use ‘screen-scraping’ software to log in to banks’ online accounts and ‘scrape’ the transaction information from the pages to the process it into a useable data format to import into accounting software.

I have stated before that I think screen scraping as a method of capturing banking data is highly problematic when utilised without banks’ explicit consent or knowledge. My understanding is simply that it violates banks’ standard terms and conditions; a person who uses screen-scraping software has knowingly given their bank account details and login information to a third party. If any fraud were carried out on the account in question, the account holder is completely exposed and would very likely not be eligible for reimbursement.

Three years on from when Automatic Bank Feeds became prominent in accountancy, I remain concerned as to whether screen scraping is sufficiently robust and legitimate enough a process to pass muster and whether it actually does what it says on the tin. ‘Automatic’ is a misnomer; the accounts must still be checked for errors and if they’re not, it is possible that a key control, i.e. reconciliation, is not done and maybe further, no interrogation or intelligent analysis of the accounts. In Part 2 of this article, I will explore further how aspects of Automatic Bank Feeds can actually be beneficial and useful as a process, but I still advise caution to not take the word “automatic” too literally.

Some providers of Automatic Bank Feeds software have partnered with banks to offer an authorised service, thereby ensuring that the associated banks’ terms and conditions remain satisfied. I am both excited and encouraged that banks are beginning to open up their infrastructures to software providers with a view to developing solutions that will help both accountants and their client businesses. However, there are still issues and limitations with these authorised forms of Automatic Bank Feeds.

One of the main limiting factors for authorised methods of Automatic Bank Feeds is that they’re not universal; not all banks have consented to their use or have given the software the required access for it to work. This causes a problem for the accountant; yes, you can import a client’s accounts into your accounting software but only if that client’s bank account is with a particular bank. This inhibits the accountant from really developing new efficiencies; while some of their clients may be able to use Automatic Bank Feeds software, it is almost certain that many others won’t. Therefore, I would argue that the accountant is better off improving their existing processes across the board for all of their clients, and to cherry-pick new IT functionality to complement that process (I will explore this idea in depth in Part 2).

Secondly, some authorised Automatic Bank Feeds software products have been developed by businesses that are not big accounting software providers. Great you might think, and initially it is. However, the last year has seen some of these businesses being acquired by accounting software providers, which will invariably result in that software becoming available only through the acquirer’s accounting software. This in turn means that people who buy into such software could find themselves being shut out in due course if they don’t happen to already use the acquirer’s accounting software.

Given the existing limitations anyway of Automatic Bank Feeds software, these ‘garden walls’ that have been built up narrow the appeal even further. In short, authorised Automatic Bank Feeds is probably only going to be cost-effective if all your clients happen to use the same couple of banks and if they and you are all using the specific accounting software that happens to own the authorised Automatic Bank Feeds software in question.

Not terribly attractive as a proposition, is it?

However, it is not all doom and gloom. In Part 2 of this article I will explore how best accountants and their clients can use elements of modern technology and software to replicate the most appealing aspects of Automatic Bank Feeds.

For more information on technology that can help with your accountancy services visit www.preludeaccounts.com, call 01656 725800 or email info@preludeaccounts.com.

Prelude Accounts can also be found on Titter via @PreludeAccounts / https://twitter.com/PreludeAccounts.

The other day, I was struck by an odd sight in my local Sainsbury’s. By the entrance, there was a rack of vinyl LPs for sale, something I thought I would never see again in supermarket chain. What was once regarded as archaic and obsolete has now come back into fashion, and I think this is a lesson for accountants in regards to their bookkeeping services.

*Is it time to up your bookkeeping game? (Image via Fotolia)*

Bookkeeping is a boring, mechanical task but someone has got to it. This is why many people outsource the process to a dedicated resource. Historically, accountants used to offer bookkeeping services but the attraction of doing so diminished when they realised that they could be spending their time a lot more profitably focusing on other services for their clients.

The looming prospect of HRMC’s Making Tax Digital initiative should give accountants pause for thought, however. As I have argued previously, Making Tax Digital poses a somewhat existential threat to current accounting practices. By moving recordkeeping to the digital domain so as to allow for quarterly reporting, HMRC is almost providing the informed, skilled individual the opportunity to bypass their accountants for core services.

The technological revolution will only make it easier for clients to resent passive accountants. No-one enjoys paying their fees to their accountant. If modern software packages and an intuitive online platform submission makes the accountant a costly, needless overhead, clients are going to look to move on.

So what are accountants to do in the face of such momentous changes? Go back to basics.

Business people outsource work when activities or tasks are too onerous or costly for them to do it themselves. This is not rocket science; if it is cheaper or more beneficial to get someone else to do something for you, you will pay them to do it. This is why accountants need to get a better understanding of their clients’ needs and business functions, for by being aware of those accountants will be able to sell themselves in a more positive, attractive light.

A quick Google search will produce numerous results for bookkeepers who are not attached to accountants. This cottage industry has come about, in part, due to accountants deliberately pricing themselves out of the bookkeeping market so they can focus on more profitable services. Nature abhors a vacuum, so non-accountants have filled the void. In other words, a service an accountancy firm could be profitably selling is being provided elsewhere.

Rather than being a threat to accountancy services, technology is in fact a boon to the innovative accountancy firm. Processes and procedures that were previously deemed commercially unviable or unattractive are feasible, intuitive and mesh well with accountants’ other processes and services.

Cloud accounting is one such technological innovation that can reinvigorate bookkeeping for the digital age. By ensuring real-time entry (or entry review) by the client or by a resource provided by an accountant (or a combination of both), accountants can maintain accurate books for their clients. This can be done quickly in a cost-effective manner, meaning that you can charge a margin on work that does not take more than five minutes a day but for which a client would probably want professional, independent overview.

But accountants should also think tangentially about what technology and online processes mean for their own clients. In the same manner that not everyone who runs a business is entirely financially adept, not everyone is technologically adept either. Training and education for the new digital age will be required by accountants’ clients, and not just the accountants themselves. This is service that accountants can provide, and charge for. New opportunities provide new revenue streams. Could your accountancy firm partner with accounting software provider for training or software reselling? What other services could an accountancy firm offer small businesses? Administration services and client (co-)management are obvious extensions to an accountancy firm’s portfolio.

Like dusting down your LPs from the attic, it is time for accountancy to go back to its roots so the sector can move on and flourish in uncharted territory. Strong professional relationships with their clients bases is the way in which accountancy firms can ensure they are not bypassed by the march of progress. I urge you all to seriously think more of the opportunities, rather than the threats, that Making Tax Digital poses and modern day bookkeeping is one such opportunity.

For more information on technology that help with your accountancy services, please visit www.preludeaccounts.com, call 01656 725800 or e-mail info@preludeaccounts.com.

Prelude Accounts can also be found on Twitter via @PreludeAccounts / https://twitter.com/preludeaccounts.

Have accountants really considered the implications of HMRC’s Making Tax Digital (MTD) initiative? From April 2018, you must comply with HMRC’s digital vision for tax collection, and you will have no choice about it. Accountants must prepare for and adapt to this new regime or professionally they will perish.

Businessman stressed by too many tasks works in the office — *Are YOU Ready for MTD? (Image via Fotolia)*

MTD is inevitable, regardless of what final form it will take or what happens politically at a national level. Society has become technically savvy and digitally dependent on online services, and expecting HMRC and the accounting profession not to move with these times is naïve and unrealistic. Technology will impact accountants’ and their clients’ relationships not only with HMRC, but also with each other.

What is behind MTD? It is the government’s intention that by 2020, HRMC will be fully digital, meaning:

bureaucratic form-filling will be eradicated; taxpayers should never have to tell HMRC information it already knows;

unnecessary time delays will be eliminated; the tax system will operate in ‘real time’, keeping everyone up to date and removing the risk of missed deadlines, unnecessary penalties, debts arising and errors in the system being carried forward from one year to the next;

taxpayers will have access to their own digital accounts; the information HMRC needs will be automatically uploaded, bringing an end to the traditional tax return.

These are lofty aspirations but they are feasible, notwithstanding the government’s IT track record, and mirror the standards of other services that people have now come to expect in the internet age.

These three aspirations could imply an existential threat to the accountancy profession as we currently know it. Real-time automation and processes in the hands of accountants’ clients could eliminate many of the traditional functions of accountants as we know them in 2016.

This may sound alarmist, but just think about the changing demographics of your own client base and their skillsets. As Tony Margaritelli of the ICPA has succinctly put it:

“Check your client base for clients who don’t use a computer, or if they use spreadsheets. If they do then you could be in trouble”.

The final form of MTD has not been completely finalised, but it is apparent that there will be no fudge or halfway houses for those accountants or those clients who are and wish to remain paper-based.

A recent webinar on MTD seems to imply that HMRC is ushering in the digital age via sly semantics; by saying that accountants are now required to log ‘up-to-date’ records rather than ‘adequate’ records, the paper age being laid to rest as a consequence.

As Winston Churchill once said, “never let a good crisis go to waste.” Albeit MTD will clearly create opportunities for cash-strapped central government to achieve significant cost savings, it would be churlish to think that MTD is solely for this purpose. Indeed, in the aforementioned webinar they make a coherent case for MTD:

“Through keeping up-to-date records in near real time instead of by processing paperwork at the year-end, businesses are less likely to lose receipts or to make basic errors. This also makes good business sense, gives them a better overview of their position through the year, and ensures that businesses have ready access to their financial information. Prompts built into digital tools will eliminate common errors, giving businesses greater certainty that they’ve got their tax right first time.”

There is nothing that one can really say to counter the above argument; it makes perfect logical sense, if one assumes that the system put into place by HMRC is robust and reliable enough.

Luckily, accounting software companies like Diamond Discovery are already ahead of the trend with such changes to business working practices. Take for example Prelude Accounts, our Cloud-based accounting software designed for both accountants and their clients, with a particular focus on smaller companies and sole traders – both accountant and client can access/update the accounts at any time or place where there is an internet connection, and the software itself consolidates and automates many existing business processes such as invoice generation and despatch.

By proactively moving their clients over to a digital accounting platform of their own choosing, accountants can cement their existing relationships with those clients and modify their own processes in preparation for MTD. Failure to do this will ensure that existing and new clients may look to do their own accounts with whatever new tools HRMC launches in the future, bypassing the accountant completely. As Tony Margaritelli puts it;

“Pushing the send button will become very attractive for clients – why would clients send you anything and guarantee a bill. Are they going to ask you to check it?”

Efficiency liberates time for the accountant, and additional time gives accountants the scope to offer new services. As I have argued in past articles and as I will continue to argue in future ones, the digital age will provide opportunities for new accountancy services and reinventions of traditional ones, such as bookkeeping.

For more information on technology that can help with your accountancy services, please visit www.preludeaccounts.com, call 01656 725800 or e-mail info@preludeaccounts.com.

Prelude Accounts can also be found on Twitter via @PreludeAccounts / https://twitter.com/preludeaccounts.

There are many software tools in the modern accountants’ armoury that were not available to the previous generation, such as e-mail and Cloud accounting. One that has proven essential for modern, successful businesses is an efficient Customer Relationship Management (CRM) system.

*(Some rights reserved by Viktor Hanacek)*

CRM is exactly what it says; a process or methodology to manage relationships with existing and prospective customers. It isn’t software driven and fundamentally it doesn’t require software more advanced than to record interactions with customers and remember key dates; a basic spreadsheet and email client could do the job.

As with many things, however, modern software has simplified and semi-automated processes that could otherwise be both time-consuming and cumbersome. Many businesses have a computerised, centralised record-keeping system that all business users can access and update as and when they interact with a particular client.

An effective CRM system is virtually essential if your business has a sales force or a customer services team that operates remotely from the central office or each other. One arm of the business needs to know what the other arm is doing or has done, not only to maintain internal processes but to maintain interactions with new and existing customers.

Traditionally, CRM is seen primarily as a marketing tool, acting as a central hub for mailing lists. Computerised CRM is particularly good for this activity as it enables you to segment your contacts lists across a variety of classifications of your own choosing, ensuring that the right marketing messages get to their relevant recipients. It also enables you to personalise the greetings and other information within a marketing message, which is now the expected norm from the recipient of any business communication.

However, reducing CRM to just a marketing or sales tool is short-sighted. It can and should be integrated into other business systems and processes such as invoicing (easily done with modern cloud accounting software) and business alerts. It can also be used to drive business intelligence reports, for example analysis of clients by size, business type, fee income or calculating the cost of customer service support by client (the number of interactions your business has with a client – and the business cost of those interactions – against the actual return you receive from them).

For the modern accountant, CRM can be a time-saving device that not only helps your business but can also help your clients’ businesses, for example by ensuring that you contact clients at appropriate junctures throughout their business year according to each client’s records, and it can also help semi-automate communications with your clients in a manner that is not too impersonal or broad for them.

Any form of intelligent, sensible automation will bring cost savings, and computerised CRM is a prime example of this. As I have often highlighted in these columns, the speed of technological advance is making new technologies easier to use and more accessible, not least in terms of mobility and remote access though apps on mobile devices such as smartphones and tablets.

All of this aside, there is another key reason why a business should make the effort to maintain a CRM system and that is data protection. Under both the Data Protection and Freedom of Information Acts, all businesses and organisations have a legal duty to protect people’s information that they hold in a secure manner and, in certain circumstances, to make that information available upon request. A robust CRM system will help to meet these obligations while also bringing the other benefits that I have already described.

If you do not yet have a form of CRM system for your business, start thinking about it now. Not only will it bring efficiencies and help to ease business stresses, it will also give you peace of mind when it comes to managing and protecting your clients’ data.

For more information on technology that help with your accountancy services, please visit www.preludeaccounts.com, call 01656 725800 or e-mail info@preludeaccounts.com.

Prelude Accounts can also be found on Twitter via @PreludeAccounts.

With Cloud Computing, RTI, Auto-Enrolment and now HMRC’s Making Tax Digital initiative, the accounting profession is in the midst of a technology revolution. To the proactive, dynamic and forward-thinking accountant this presents an exciting opportunity, but to others it could be a threat to their very existence.

We have become so used to having our needs and demands met instantly by business and technology that we have also become increasingly intolerant of those who have not kept up with the pace. Technology has equipped us to undertake tasks ourselves that previously we would have outsourced to others. In short, we do more for ourselves, more efficiently, and at a much quicker pace.

It is inevitable that the value of the accountant – especially to the small-business client – will be questioned as people ask “Is there an App for that?” We all know that, by many clients, the service an accountant provides is accepted begrudgingly as a necessary evil that, while it may ensure that a set of accounts is in order before being sent off to the taxman, it is an expense that they think does not yield any tangible benefit to them. Like insurance, accountancy is an expense that people feel obligated to incur rather than something they embrace enthusiastically. Of course this is wrong but we know this is what many clients think.

Don’t shoot the messenger.

If people want to save themselves a few hundred pounds per year in accountant fees, they will surely look to technology to help them make that saving. You know and I know that, without guidance, they will very likely make a choice that is right for them, but many clients will either be ignorant to this or will deem it an acceptable risk.

As tax-payers, clients will be fuelled by the Making Tax Digital initiative to consider this if they aren’t doing so already. The UK Government is looking to enhance their online technologies to transform the tax system by 2020 and build “a more transparent and accessible system fit for the digital age” with a “vision for a transformed tax system and the end of the tax return”.

Of course, with taxpayers’ business accounts and data more readily available to them, HMRC will benefit from this by being able to collect more tax, more readily, more regularly and more in real-time. I suspect that this won’t be promoted by HMRC as an objective of the initiative, but I suspect that it is and it is not a bad thing. What business wouldn’t like to increase its revenue and improve its cash flow?

Cumulatively, this all could pose a clear and existential threat to the small-business accounting practice. There are precedents in other industries, such as disruptive technologies like video streaming changing the way we watch movies. Who rents physical DVDs or VHS videos anymore? Remember Blockbuster? So, is it inconceivable that the small-business accountant could become as archaic or as redundant as the village blacksmith?

It does not have to be this way; successful businesses and sectors adapt to the changing environment rather than surrendering to it, and so it must be with accountancy. It just means that today’s accountants must learn new skills and embrace new technologies to ensure that they remain relevant and of use to both their clients and to the future tax system.

Adoption of new technologies should not be seen as an arduous burden or a threat to your profit margins. Technology, when implemented both sensibly and cost-effectively, can actually improve your margins by reducing the time it takes to perform routine, mundane tasks and eliminate some altogether. This will increase capacity to take on more clients and to develop new added-value, higher-margin services.

It is that final point that accountants must wake up to; new associated services will help to ensure that you have something to offer even if traditional services disappear. Putting technology like Cloud Accounting at the core of your practice will ensure you can provide strategic and administrative support to your clients, thereby keeping you central to their needs.

Accountant should already be preparing to radically overhaul their traditional business model and client relationship, embracing the many benefits that technology, the internet and mobile devices can offer them and their clients. ‘Cloud Computing’ (storing and processing information on the internet, not on your own physical devices) generally is the biggest opportunity.

The future presents a challenge but it should be considered exciting rather than daunting. Time is of the essence and with a judicious investment in new technologies, software and skills the accountant will actually be here to stay.

For more information on technology to help with your practice, please visit www.preludeaccounts.com, call 01656 725800 or e-mail info@preludeaccounts.com.

Prelude Accounts can also be found on Twitter via @PreludeAccounts / https://twitter.com/preludeaccounts.

Whether we admit it to ourselves or not, we all make snap value judgements of other people and situations we find ourselves in. It is human nature and, as such, it influences our professional judgements as well as personal ones. So what judgements of others do we make when we get given a web address or an e-mail address?

I confess that when a business professional gives me a business card and it features a Hotmail or a Gmail address, I make certain judgements of my own, rightly or wrongly. Firstly, I assume that the person giving me the business card is a sole-trader or a small enterprise. Secondly, I assume that their own IT infrastructure is not particularly advanced or secure. This might very well be the case, but more fool the person who has given me the business card if not!

Accountancy is seen as being one of the professions, and all that it entails. For one thing, I would like to know that any information that I e-mail my accountant is both secure and backed-up, two things no-one can absolutely guarantee if they use a ‘free’ e-mail service. I would also like to know that my accountant is sufficiently advanced and technically sophisticated enough to have good IT systems that reflect current best business practice. If my accountant is not up to speed with IT best practice, what else are they lagging behind in?

You may think all of this as being superficial and, to a certain extent, it is. But whether or not these judgements are superficial or not, they are far from spurious. If a negative judgement has an impact on your professional image, it will have an effect on your future business growth.

To my mind, every business should own their own domain name (web address) on which the company’s e-mail addresses will extrapolated from. Not only does doing so immediately address the issues I have raised here, it also provides the basic infrastructure for your business and the provision for growth. For example, if you decide to grow your accountancy practice at any point, would you expect or even want your employees to use Gmail or another free provider’s service, over which you yourself will have no access or control over?

Diamond Discovery, the makers of Prelude Accounts, is now offering both webhosting and e-mail hosting services to accountants. We will help you get set-up and will provide cost-effective, personal support services, so you will have online branding and other online services that will put you on an equal footing with your more established competitor. For more information call 01656 725800 or e-mail info@preludeaccounts.com.

Don’t forget: Prelude Accounts can also be found on Twitter via @PreludeAccounts / https://twitter.com/preludeaccounts.