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Accountants, here are 3 business opportunities for you in 2022 and beyond

Growth & Customers

Accountants, here are 3 business opportunities for you in 2022 and beyond

As with the year just gone, 2022 ushers in another packed period for accountants and their clients.

Recent research from Sage reveals that 84% of small and medium-sized enterprises (SMEs) consider their accountant to be a very important, or even integral, part of their business.

You can capitalise on this as the unusual events of 2022 and even 2023 unfold.

These are listed below.

Each offers an opportunity for a touchpoint with the client during which you can discuss their business requirements, and sell them additional essential service offerings.

Sage’s research goes on to say that SMEs believe that, in order to grow in the next five years, they need healthier cash flow (37% of respondents), more staff (32%), an investment in technology/software (31%), and better access to funds and financial planning (29%).

As an accountant, you’re strategically positioned to help with each area.

In addition, with a raft of new legislation coming into play in 2022 (and 2023), your clients will be looking to you for advice and support.

Not only will this allow you to show how you can be a trusted adviser to your clients, it also provides your practice with opportunities for business growth.

In this article, we cover the legislation opportunities and highlight the importance of upselling additional services to your client base.

Here’s what we cover:

Upcoming legislation opportunities for your practice

1. Making Tax Digital for VAT: April 2022

2. Plastic packaging tax: April 2022

3. Basis period reform: 2023 and beyond

Growing your business by upselling additional services to clients

Final thoughts: How to best serve client needs

Although in recent times HMRC has been known to make last-minute postponements because of coronavirus, the only rational way forward is to assume what’s listed below is canonical and make plans accordingly.

Below is a list of key one-off accounting events in 2022 and the start of 2023, and how you can support your clients with them.

1 April 2022 sees the extension of MTD for VAT to everybody who’s registered for VAT. This includes those below the VAT threshold.

According to Sage’s research, 92% of accountants are expecting the expansion of Making Tax Digital to come with an increase in client demand.

Yet when asked if Making Tax Digital for Income Tax is an opportunity to expand or grow the practice, the most popular answer (38%) was that accountants are not clear how to capitalise upon it.

There are several tasks facing accountants that can inspire new service offerings.

First, you’ll once again need to segment clients based on various characteristics.

Monthly VAT filers are likely to need help initially, for example. Those who are tech-savvy are likely to need less help.

Those who file their own VAT Returns are likely to need more of an education focus compared to those that rely upon you to do so.

And the requirement for education comes second in the list.

As with the initial Making Tax Digital roll-out, HMRC is relying on accountants to help clients understand the MTD requirements—especially as they relate to a client’s individual circumstances.

So expect your phones to start buzzing when those letters or emails from HMRC start arriving.

Remember that each client touchpoint is an opportunity to sell improved service offerings that scratch client itches in a rapidly changing world.

Thirdly, there may be a need to help clients select MTD-ready software if they aren’t already using it. After all, HMRC won’t let businesses register unless this choice has already been made.

Many clients are likely to be moving from a spreadsheet approach, in which case bridging software is a potential but perhaps not long-term solution.

It makes significant sense to take this opportunity for clients to make the leap to dedicated accounting software, especially in light of other Making Tax Digital schemes coming soon, such as MTD for Income Tax in 2024.

Switching clients to software should be considered alongside any larger digitalisation projects to integrate client data with your own systems.

And if you haven’t considered partnering with software vendors to sell software, now is surely the time to do so—especially with reference to that ongoing MTD revolution that will probably run to the end of this decade.

Manufacturing clients may need to observe the plastic packaging tax as of 1 April 2022.

This tax aims to encourage recycling by taxing plastic packaging manufactured in the UK, or imported into the country (in both the context of being used to package other goods, and as basic materials for packaging use).

Any plastic packaging containing at least 30% recycled plastic is outside the scope of the tax, as are imports or manufacturing of less then 10 tonnes of plastic packaging per year.

Although effectively a logistical and manufacturing issue, clients may still turn to their accountants to learn details about the tax, and to refine processes to take account of the tax.

Those details are fairly straightforward—the tax is effectively £200 per tonne.

Those affected must register and then file quarterly returns.

As with any new tax, however, the devil is in the detail. As of April 2022, invoices must show the amount of tax paid on any packaging used, for example.

Getting yourself apprised of the details ahead of April 2022 is a good idea, even if you believe your involvement will be minimal moving forward.

While few clients may know about the upcoming Making Tax Digital deadlines, even fewer are likely to know about the requirements for basis period reform.

Don’t forget that this applies to all unincorporated clients, regardless of whether they are within the scope of the various MTD schemes, or not.

And the transition year could begin as early as January 2023 for some businesses—less than 12 months away.

Tasks for you are likely to revolve around basic education and planning.

Many sole traders may not even know what a basis period is, or understand that they have an accounting date.

Even the 70% of those that HMRC estimates are not affected—because they already use the tax year as their basis period—are likely to be alarmed when they hear discussions within the media.

They’ll turn to their accountant as the ultimate source of knowledge of everything accounting and compliance-related.

Planning will involve helping clients protect their cash flow through the transition period, and helping them understand the irregular requirements of 12+ month accounting periods.

Some clients may choose to switch to the tax year as their accounting period, in which case you will again need to help them understand how this is achieved.

If your own practice is aiming for growth in 2022 (and beyond), one of the easier wins is upselling additional services to existing clients.

The aforementioned research by Sage reveals that an accountant is the most consulted person when it comes to making strategic business decisions, with 49% of SMEs turning to them.

This is nearly double that of the second most popular resource—the internet, which was listed by 29% of the research respondents.

Upselling services that assist with strategic growth can be done on the back of education efforts when informing about the requirements listed below.

It can be via emails, mailshots, or phone/videoconferencing calls (think Zoom or Microsoft Teams).

The research reveals that 63% of accountants agree most clients prefer apps, email and other virtual channels to speak to clients, compared to speaking directly.

So let this guide your marketing plan.

For each client communication, you can use the following list as a basic outline. But remember to remain open to questions, and to let the client take the lead.

Although this is ultimately a sales communication, it’s also a chance for the client to discuss matters they may be unable to discuss elsewhere, and that have been of concern to them.

Go into each communication with your service offerings already established.

While offering ad hoc free advice will be expected by the client, always aim to segue into a discussion of paid services.

For example, while you can offer immediate advice about cash flow management for a client who too frequently dips into the red, you can then discuss a quarterly financial check up service and discuss how it could be transformative.

Here’s the outline/script to use to discuss client needs.

How healthy is the client’s business?

What’s going well, and what isn’t so good?

If there are plans for growth or even for contraction, see if there are areas where you can help directly, or advise.

For example, financial reports might be required for loan applications or as part of attracting investors.

If, unfortunately, there are redundancy plans, you may be able to help the client understand payroll and legal requirements.

The pandemic and its aftermath

This will almost certainly come up early in the conversation, and will probably influence the client’s reply around the health of the business.

Take the opportunity to discuss ongoing coronavirus relief measures from the government.

While some have now wound down, HMRC recently announced late submission and payment allowances for Self Assessment, for example.

The hospitality and cultural sectors can take advantage of some new measures too.

There might be further measures like these as time goes on.

Existing measures such as Bounce Back Loan repayments will be ongoing for possibly the coming decade, so will continue to affect cash flow.

Discuss digitalisation

The upcoming Making Tax Digital deadlines of April 2022 (MTD for VAT) and 2024 (MTD for Income Tax) bring this into sharp relief.

But if clients already want to switch to accounting software, and struggle to find resources to do so, you can help with planning, if not the choice of software.

Like any other year, 2022 is faced with challenges and may not seem like an especially good time to overhaul accounting processes.

But if clients understand the benefits, such as an 24/7 view of cash flow, or automating tasks such as invoice and bank reconciliation, then the upgrade is revealed in its true proactive light.

Accountants who are starting to feel that each year brings fresh and difficult challenges might receive sympathy from their colleagues.

But these are business opportunities in disguise, and there are clear signs the industry is responding.

Sage’s research says that practices are already investing in issues such Making Tax Digital readiness, with 46% saying they’re employing more staff and upgrading practice technology to automate processes and improve customer service.

In short, the coming years for the proactive and progressive practice is all about capitalising upon developments while being the same essential partner for businesses that is the foundation stone of the accountancy industry.

Why you need an accountant in a digital world

From navigating the complicated world of tax to managing finances and using digital tools to take care of bookkeeping, show your clients and prospects how you can be a valuable partner to their business.

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