Three ways digital is changing accountancy in 2017
Alexander Meynell, Commercial Director at CreDec, comments on digital transformation trends, digital first business strategies, and how a prominent boom in online retail has emphasised the drive to digital for accountancy.
Disappointing January high-street sales and a visible increase in online shopping are emblematic of the drive to digital which is happening in all areas of our lives, from financial planning to how our personal data is handled.
The move to a life online and the rapid growth of technology has created new markets, and innovation is crucial for traditional industries in the face of accelerating change. Here are some of the digital trends which accountancy and financial services firms can take lessons from.
1. Digital first strategy
According to the BDO High Street Sales Tracker, the UKs high street experienced its worst sales performance in four years; yet an increase in online retail sales hit a two-year high, growing an impressive 26.6% in January. This trend follows a poor high street performance in December, where sales fell by 5.2% - and again the performance in shops was dwarfed by an online sales surge.
Changes in the habits of consumers follows a wider trend in many traditional industries embracing innovative tech-enabled ways of catering to their customers and disruptive technologies continue to drive many industries to adapt quickly, or risk losing their competitive edge.
Recent figures indicate a trend towards an instant way of shopping. When a brilliant gift idea strikes, you can instantly find the item online and get the job of shopping done – even down to the wrapping. In an increasingly time-poor world the luxury of hitting the high street has been overtaken by the convenience of digital platforms such as Amazon Prime, which has overhauled how we approach everyday shopping.
2. Real-time engagement
Traditional business models and services need to innovate to stay ahead, from shopping to online banking. The transformation of the current tax system has led to the digitisation of HMRC, with the development of a centralised digital tax system.
With HMRC’s physical offices largely a thing of the past, taxpayers and their agents are increasingly driven online to find guidance and to communicate with HMRC, who have sought better ways to interact with their customers in real time.
It is a year since HMRC’s Personal Tax Account launched; now you can interact with them almost instantly. HMRC’s ambitious aim of becoming the most digitally advanced tax authority in the world means that checking your state pension and filing your Self Assessment Tax Return online are fast becoming the digital norm.
You can now see an estimate of your tax liability for the current and following tax years from the comfort of your sofa.
3. Big data
There is now an endless supply of digital services at our fingertips, but with the advantages of digital transformation comes a responsibility to take care of our personal data.
Problems arise when inaccurate data is held in our online shopping account. How many times have we pressed the ‘one-click’ order button and discovered that our coveted virtual reality headset has been delivered to our old home – or worse, our old office – address?
For HMRC, the importance of accurate data in their computer system to support this digital, open-all-hours way of interacting with taxpayers cannot be underestimated. As has always been the case, responsibility for ensuring you pay the right tax resides with you, the taxpayer.
Whether you submit a Self Assessment return or your employer’s payroll department passes your earnings information to HMRC for you, the bottom line is that it is up to you to check the information HMRC hold on you and to make sure they have got it right. And for the fully rounded business adviser accurate data storage and greater analysis allows CAs to learn about their customers’ expectations, and remain competitive in a digital economy.
A BACS payment service allows practice payroll to prove not only Real Time Information (RTI) compliance but the correct operation of PAYE to both HMRC and clients alike, providing evidence to contest unwarranted HMRC compliance action.
About the company
Alexander Meynell is Commercial Director at CreDec. CreDec provides credit management services to the UK small and medium enterprise market. Our credit management services are based on our payment processing capabilities. We give access to leading credit management processes, payment systems and networks without any of the associated capital expense or costs of ownership.
CreDec Direct BACS services
Working in association with ICAS, CreDec’s Direct BACS services have the lowest BACS access cost for practice payroll. A BACS payment services allows practice payroll to prove not only RTI compliance but the correct operation of PAYE to both HMRC and clients alike, providing evidence to contest unwarranted HMRC compliance action.
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