Four reasons why digitisation is great news for accountants
For the accountancy profession, Making Tax Digital - the UK Government’s initiative to fully digitise the tax system by 2020 - signals the dawn of a new era: one in which digital services will lie at the heart of an accountant’s day-to-day role.
Of course, accountants aren’t completely new to the digital world: many use online accountancy software, like FreeAgent, to manage their clients’ accounts and collaborate with them in real time.
However, the revolutionary nature of Making Tax Digital which promises ‘a transformed tax system and the end of the tax return’ may lead some accountants to fear that the initiative presents a challenge, or possibly even a threat, to the industry.
With the accountancy profession currently at something of a crossroads, I believe that digitisation represents a genuine opportunity for accountants to both grow their practices and work more effectively with their clients. Here are just some of the reasons why.
Say goodbye to unnecessary admin
With an aim to ‘eradicate bureaucratic form filling’ and for taxpayers to ‘never have to tell HMRC information it already knows’, the time saving opportunities of Making Tax Digital are significant for both accountants and clients alike.
Work with richer client information
Equipped with a full picture of your clients’ accounts, you’ll have far richer information to work with and will be able to provide deeper and better insights into how their finances are performing.
Focus on providing higher value services
The reduced administrative burden of moving to a fully digital tax system will free accountants up to provide higher value services to clients, such as compliance and business support.
These services, which demand the time and expertise of accountants, inevitably attract higher margins than day-to-day bookkeeping tasks and lend themselves to a value based approach to pricing. It’s also arguably more rewarding to help clients achieve their goals for their business than it is to spend hours chasing down paperwork and completing basic administrative tasks.
Stop being reactive, start being proactive
The availability of realtime accounting data and a shared accounting picture allow a shift from offering reactive services (often manifested in a single interaction at year end), to a far more proactive service, with weekly or even daily updates via the alerting and exception reporting tools provided by systems such as FreeAgent.
With this access to realtime information about your clients’ accounts, you’ll be in a great position to notice and address potential problems in plenty of time and provide accurate and relevant advice exactly when it’s needed.
Ed Molyneux was a speaker at the ICAS Practitioners' Conference 2016. To find out how FreeAgent can help you prepare for Making Tax Digital, please call 0800 025 3900 or visit their website .