We do not think anyone can argue that accountants have not been a pivotal part in helping business owners grow and expand their businesses in previous decades.
Having a good accountant by your side to help you avoid paying unnecessary tax, manage risk, and understand the Key Performance Indicators that allow you to keep on top of your finances is a key asset for any successful business.
However, a revolution is underway that has been accelerated by HMRC’s much lauded digital tax plan. Cloud software companies such as Xero, Quickbooks, Freeagent, just to name a few, have challenged the conventional theory that every business needs an accountant.
Sure, accountants are still needed for tax advice but the bookkeeping, accounts and preparing tax returns function is now readily available on all sorts of cloud accounting websites. So where do accountants go from here?
We think that it is fair to say that those accountants who embrace the ostrich approach are likely to see a dramatic reduction in client numbers over the years to come. The profession has no choice but to adapt to the changes as business owners are now requiring a completely different set of skills from us.
At BKB, we have worked tirelessly over the last 3 years reviewing all of our clients’ bookkeeping systems and helping them onto cloud software. For some, this has meant introducing digital systems to our clients for the very first time, while others have required varying levels of improvements to their existing systems in order to satisfy the ever increasing compliance demands.
We would have to say that our clients have embraced these changes well and we have received very positive feedback. The legislation has brought added benefits to our clients with the way we interact with them. We are now able to access clients financial data in real time, which allows for much more meaningful conversations and advice.
This is irrespective of the size of the business too. A very small business may think that there is no need to embrace this software because they are not VAT registered, but then how will the owner know when the VAT registration threshold has been breached? Or if indeed the business is even profitable before they meet annually with their accountant. Budgeting for tax is key and we can pro-actively advise as the year progresses.
The thing that has struck us the most is that the advice we are asked for now is “how can I improve my internal controls and systems to be more efficient as a business?”. This is where we are grateful for our younger members of staff who have grown up with IT around them for as long as they can remember, as their skills are being utilised daily.
Most cloud software companies have add-ons to their tools that are provided by third party companies. We rarely struggle to find something that won’t fit a client’s need and we certainly see us expanding more into IT development throughout this decade than in any other area.
As a future prediction, we wouldn’t be surprised if over the next few years you see mergers of accountants and IT companies, who working together will be able to offer a wholistic accounting and IT function for businesses.
If you have any questions or needs around the world of digital tax, bookkeeping and accounts, or indeed any general accounting and tax advice, we at BKB would be more than happy to have a free initial chat to discuss how we can help in the new decade that we find ourselves in.