It was great to see accountants and bookkeepers back together in London to share all things accounting for Accountex 2022.
As you might expect at the event, Making Tax Digital (MTD) was a big focus, as we’re only two years away from a massive change when it comes to MTD for Income Tax Self Assessment.
Sure, MTD may be a challenge, but Accountex 2022 showed that digital transformation could herald enormous opportunities for transforming accountancy and bookkeeping practices for the better.
Here are five big takeaways from the event for accountants and bookkeepers.
Here’s what we cover:
- 1. The relationship between accountant and client has room for improvement
- 2. Making Tax Digital is an opportunity
- 3. Make use of MTD advice
- 4. Embrace using a digital network
- 5. Use the power of automation
- Final thoughts: The human touch is key
1. The relationship between accountant and client has room for improvement
Small and medium-sized enterprises (SMEs) still trust you as the accountant to give them business advice.
And Accountex 2022 showed you’re in an excellent position to benefit from the right services powered by tech.
Sage research says 84% of SMEs consider accountants to be critical for them, while 49% go to accountants for advice (53% of SMEs said they were even more reliant on accountants due to the pandemic).
Are you working well enough with your clients?
Well, 99% of accountants use some form of digital accounting, so clients certainly accept digitalisation as part and parcel of working with you.
However, there’s still much you can do to improve your digital connection with your clients, as 60% of accountancy firms say they’re not confident in using their accounting software.
Why should clients trust you if you’re not confident in the software you’ll need to use to manage their tax returns?
Having an accounting product is all well and good.
But without deep trust, it may well be that connected and frictionless relationships between accountant and client where you feel comfortable as partners is a long way off.
2. Making Tax Digital is an opportunity
A human connection between accountant and client may also be missing.
One problem is that 64% of accountants feel SMEs under-appreciate their work, especially in compliance, tax efficiency, and business planning.
One opportunity to build a better relationship with clients, whether through technology or as humans, is MTD.
We’re off and away with MTD for VAT, and a big focus of Accountex was MTD for Income Tax Self Assessment (ITSA), which we’re very likely to see in April 2024.
MTD for ITSA is the most significant change to your industry since Self Assessment hit the UK in the 1990s. It will impact 4.2 million businesses and demands a new approach for your accountancy or bookkeeping practice.
Accountex made it clear that you should see MTD as a once in a lifetime event that can make your practice particularly valuable to small businesses.
By owning the MTD process, you can make your team more efficient, make more money by supporting clients at a higher level, and deliver a customer experience that clients will highly value.
3. Make use of MTD advice
In the big scheme of things, 2024 is not far away, and a lot of messaging from Accountex 2022 was around making the proper preparations for MTD for ITSA and ensuring the transition goes as smoothly as possible.
As an accountant or bookkeeper, you should:
Choose to act now
As you may have already experienced MTD for VAT, there is a lot to work to do if you want to meet the MTD for ITSA requirements, whether you’re working with sole traders or landlords.
Commit to seeing MTD through
MTD is here, and it’s certainly not going away. What you want to do is deliver your MTD for ITSA plan (Not got one yet? See point three below – Sage can support you with this), as your future success might depend on it.
Remember, don’t think it’s all on you
You’re not on your own—there’s help with MTD for ITSA available.
It’ll give you the skills and confidence to build and deliver a clear, confident, and profitable plan for the practice and your clients, helping you get ready for MTD for ITSA.
Sage’s MTD for ITSA 4-Step Practice Success Plan consists of:
- Plan and Prepare—create an action plan
- Practice Readiness—examine processes and workflow
- Client Readiness—create client behaviours for success
- Deliver and Succeed—maximise the positive impact and reach your goals
Learn more about the 4-Step Practice Success Plan and how to sign up on the Sage for Accountants website page.
4. Embrace using a digital network
Of course, Accountex 2022 wasn’t just about MTD.
There was also a lot of future gazing and conversation about where the accountancy profession will go next.
One technological change that you may want to think about as an accountant is the idea of using a ‘digital network’.
Digital networks are a new enabling architecture in Software as a Service (SaaS). The idea is that while digital usually ‘records’ the business, in a network digital ‘conducts’ the business.
While SaaS is designed for everyone in the business, digital networks are designed for everyone in a business ecosystem.
In SaaS, people share computing resources, while in digital networks, people share data and activity.
An example of a digital network in the consumer world is the one built by food delivery app Deliveroo, which doesn’t just cater for restaurant employees but everybody in its business ecosystem—such as restaurants, drivers, and customers.
Evolving from simply using SaaS software to using a digital network matters to accountants because digital networks allow customers, software vendors, banks, and governments to create a business ecosystem with each other.
Like open banking has revolutionised finance for consumers, the same can be done with businesses, as you can establish trust between all the parties involved.
5. Use the power of automation
Accountex 2022 showed that automation will continue to improve the way accountants work.
With financial management software, it’s impossible to program a computer to recognise every conceivable invoice format.
If you apply machine learning to recognising invoices, the best you can hope is to achieve 80-90% accuracy.
The real power is its scale.
A human may achieve much greater accuracy but can’t hope to match a computer’s productivity when automation is in action.
As an accountant, you can have confidence in software automation that can review hundreds of thousands of transactions a month, which humans can’t do manually.
Final thoughts: The human touch is key
Much discussion at Accountex 2022 was around how the accountancy profession evolves as technology develops.
In the short term, it’s MTD that has the potential to transform your relationships with clients for the better.
However, be aware that artificial intelligence (AI) and automation hold the potential for accountants to elevate the human work they do for SME clients and become trusted partners central to their success.
The technology you use needs that human touch for you to reach your full potential.
Recommended Next Read
How CFOs can turn compliance into an opportunity
Making Tax Digital: A practice survival guide
Need support with Making Tax Digital, for your clients and your practice? This free guide will help you get ready for MTD for VAT, Income Tax Self Assessment and Corporation Tax.
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