Special report: Four practices embracing technology
How do you feel about integrating technology into your working practices, using ChatGPT to address queries around tax, or the imposition of MTD?
Fraser Allen canvasses opinion from four attendees at the Digital Practice Conference, an ICAS event held in Glasgow earlier this year. And despite representing very different firms, the prevailing mood is one of optimism at the opportunities, coupled with awareness that, when presented with real-world questions, finance professionals need to rely on themselves, not the software, to provide the right answer
Hyder Fattah and Anthony Allan – Directors, Hawthorn Tax
Hyder Fattah and Anthony Allan have been pals throughout their careers, having met on their very first day working at HMRC. “We used to joke about starting our own business back then,” says Hyder. “Eventually it came to fruition.” Hyder went on to spend seven years as an HM Inspector of Taxes, leading cross-tax investigations, while Anthony followed five years in HMRC’s large business directorate with two years in corporation tax at BDO. They then joined forces to form Hawthorn Tax in Glasgow in January 2022.
“The driver was our experience at HMRC, and in the private sector, where we had seen a lot of poor service from accountants,” says Hyder. “Clients were being left in the dark as to their accounts, and there was a lack of approachability, with things often getting done at the last minute. We saw lots of poor technical advice given too.” Anthony says their vision was to “provide our clients with a sense that somebody’s got their back, like a trusted friend”.
And Hawthorn – an ICAS practice, although both founders are CTAs – did, of course, start its Making Tax Digital (MTD) journey in a very different place from older practices. “We were fortunate in that we had a blank slate,” says Hyder. “We could structure the firm from the ground up, and didn’t have to go through the transition that a lot of others are tackling.”
Nonetheless, the duo still found the Digital Practice Conference to be inspirational. “We got all the cloud-based accounting software when we started but now we see that is just the beginning,” says Hyder. “There is way more potential with the technology. If HMRC keeps progressing with MTD, we won’t really need to change the model for how we do things, but that’s not the point. We’re not becoming digital just to comply with HMRC, we’re doing it so we can give more time to our clients.”
Hyder and Anthony are implementing new practice management software to realise these benefits while engaging with their peer CAs to seek out opportunities and advice. “If you’re thinking of moving from X to Y, you can get lots of input from other people,” says Hyder. “There are great online communities for that kind of peer-to-peer support.”
Hyder says they’re also looking at AI’s potential: “We see future uses for it to draft client responses for review, extracting common information a client may request – for instance, ‘How much tax do I owe by 31 Jan?’, ‘Can I have a copy of my SA302?’ However, we’ve put ChatGPT to the test with some tax questions and the answers were often incorrect or recklessly unnuanced, so we’ll be sticking to our technical ability and experience for now.”
Amy Jones CA – Director, JT Thomas & Co
When Amy Jones CA joined the family business in 2009, the practice was reliant on standalone PCs and old-school tech. Of course, that wasn’t particularly unusual for the time. Having established JT Thomas & Co in rural north Wales in 1981, her father had run the practice successfully for more than three decades. However, as Amy assessed the piles of floppy disks, she knew that better technology was essential to the company’s future.
“My role now is to steady the ship and take the business forward,” she says. Amy took over as the main director earlier this year, following her father’s retirement five years ago, and leads a team of 10 staff across four offices in Bangor, Criccieth, Llandudno and Blaenau Ffestiniog. “I’ve been a director for a few years now so there have been changes, including acquiring two other practices,” says Amy. “We’ve also been implementing changes to the software we use. We’re all working on a cloud-based system now – no need for floppy disks!”
Amy’s MTD ambitions have also put her business back on the front foot with clients. Previously, the more progressive clients were choosing their own accounting software and JT Thomas would have to work around it. But now the company has adopted Xero as its practice software and is able to be far more proactive with clients in helping them manage everything more efficiently online. At the same time, Amy is keen to strike a balance in offering her clients a choice, rather than pressurising them to sign up to Xero. “I don’t want to make people change just because it makes it easier for me,” she says. “We must always remember that we’re providing a service.”
Being based in Wales, Amy hadn’t previously attended ICAS events, but feels that the Digital Practice Conference has broadened her horizons. “The people there were very open, engaging and welcoming,” she says. “It helped me feel more confident with where I am in my career, and the whole process of getting my practising certificate – and the engagement I’ve had with ICAS since attending the course has been really positive. You know how they say it takes a village to raise a child? I think the same is true of a business. Since Glasgow, I’ve been building my village and making more use of it instead of thinking ‘I won’t bother that person, I’m sure I can work it out myself.’”
Another big takeaway from Glasgow was the need for a modern practice to be nimble. “I like the idea that you have to keep being dynamic, fluid and prepared to change,” Amy says. “Sometimes you can feel overwhelmed by how much needs to be done but you’ve got to enjoy it, be open and be positive about the opportunities. Go for small wins and then you’ll look back in five years and see how far you’ve come.”
Michael Harkins CA – Owner, Murray & Henderson
Michael Harkins is having a busy day. The owner of Gourock-based Murray & Henderson is at Cappielow, the home ground of Greenock Morton FC, uploading player contracts in anticipation of a couple of signings for the Scottish Championship side. As well as his day job, Michael has a voluntary role as Financial Director at Morton.
When we speak again later, he’s back at his company’s modern new offices, having uprooted them from the Greenock premises they had worked from since its founding in 1964. Michael initially joined Murray & Henderson after completing his CA training in 1997 but, to the dismay of his now fellow Joint Managing Director, Eddie Murray, he left after just six months. “I met my future wife in a classy Greenock nightclub,” he says. “She had been working on cruise ships and she put the thought into my head that I could work overseas – so I got a job with EY and we went to live in Bahrain.”
After 21 happy years in the Gulf, Switzerland, Hong Kong, Russia and Singapore, and raising three daughters, the couple decided to return to Greenock in 2019. Michael had kept in touch with Murray while away and rejoined the practice as a partner, relishing the opportunity to be his own boss after two decades of corporate life.
“However, it was a bit of a surprise to find that the office looked exactly the same as when I left,” he smiles. “It had the same furniture, the same wallpaper and the same carpets. And the processes were pretty much the same too, with everything done by hand, and letters dictated. It was like something out of A Christmas Carol. But for me, it was good that I had that challenge of modernising things.”
He introduced AccountancyManager software and migrated the old paper records to a new database. His colleagues embraced the benefits of the change.
However, even after making this significant progress, the conference proved something of a revelation. “It showed how much we can still do in terms of the other firms,” says Michael. “I’d thought, well, we’ve got our AccountancyManager, everything’s in Excel, we’ve put in new software for accounts prep, tax returns and so on, so that’s all quite automated, but to see how much further we could go was a bit of an eye opener.”
He also believes that part of the challenge lies in identifying where the opportunities in new technology lie. “For instance, when our clients struggle to use Xero or QuickBooks, it makes our life more difficult. But one of the speakers (Will Farnell of Norwich-based Farnell Clarke) explained how he now provides a book-keeping service to his clients, in which his team spend four minutes a day going into the software and keeping the banking and transactions reconciled. It’s a good service for the clients, it would make our lives easier and it’s an additional revenue source.”
Michael is also interested in the increasing possibilities for using AI – in particular, ChatGPT. “I’ve spoken to a couple of people who have used it for recruitment and, for one of them, the results were fantastic in terms of delivering much better responses,” he says. “So it’s something that’s on my mind.”
Something more troubling for Michael’s mind, however, is the prospect that the introduction of quarterly reporting could well create a highly uneven workflow across the year, with four months that are “absolutely crazy busy” and eight that are a lot quieter. But Murray & Henderson has come a long way since Michael tucked his passport back in the drawer, and he’s keen to focus on the opportunities.
For more resources, visit the ICAS technology hub