The UK taxman cometh

At the end of January every year the UK goes into tax return meltdown and by the stroke of midnight on the 31 January deadline, more than nine million individual tax returns will have been filed for the year. If you’re a high rate UK resident taxpayer or company director, you must file a Self Assessment tax return every year and many people, me included, opt to enlist the services of an accountant to do this.

While we Brits might like to arrange ourselves in orderly queues for many things, filing tax returns isn’t one of them. The ingredients of bad record keeping and procrastination combine right around this time every January to form the practice efficiency equivalent of a dirty bomb in pretty much every accounting firm in the UK.

Meanwhile, being skint and also being conveniently in possession of crown appointed tax raising powers, the UK government’s revenue department, Her Majesty’s Revenue and Customs (HMRC), recently toughened the penalties it levies for late or incorrect filing and stands to further boost its inflow of taxes with cash derived from late filing penalties.

All of which makes January every year quite angsty if you’re an accountant in the UK.

While Xero doesn’t yet calculate or file personal tax returns, I decided to conduct an informal survey last week with a handful of Xero Gold Partners to enquire if their Xero clients’ tax returns were any less onerous owing to the data being online and bank feeds mitigating the chance for financial records to get out of step. Continue reading ›

Bundle me – moving accounting from an annual fee to a monthly fee

The bundling of client fees among accountants is starting to become more mainstream. I started using bundles with my clients almost 10 years ago. With Xero it makes it so much easier to be connected to your client because there is no data transfer and you have limitless access to your client’s main business productivity tool, their accounting system.

As an accountant if you use Xero as a ‘Single Ledger’ you’ll be saving time on core compliance work because there is no data friction. In a nutshell the Single Ledger is the same ledger used by business owners to run their business and it’s the same ledger used by accountants to prepare Management Reports and Annual Reports. So if you stay on the old time and cost model, it makes sense that you would bill for less. The solution is to move to an agreed fee base from the outset. This way clients know upfront exactly what they’re up for. It’s also an opportunity to be able offer services beyond compliance and give real business advice.

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Being a proactive accountant

It’s your job as an accountant to give clients advice about how to make their business better. Being truly ‘proactive’ may require a shift in mindset. It’s similar to what you would expect an internal CFO to do.

The trouble is you’re already super busy doing the compliance work – it makes sense because this has been the profession’s role in the past. Times have moved on. What you need is to stop doing tax returns and annual compliance work. If you can, hire someone to do the reviews and desk work for you. Sure keep an eye on this, but you don’t actually need to do it. Then, leave your desk armed with a tablet and a smartphone and get in front of your clients.

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Points of inflection

We’ve just spent the last two days in London talking, presenting and demonstrating Xero to 650 accountants and bookkeepers across two separate conferences; the annual conference of the Institute of Certified Bookkeepers and the ICAEW’s Sole Practitioner’s Conference.

As Xero’s responsible adult in the UK I was lucky to enjoy the additional privilege of being invited to the ICB’s annual awards dinner on Thursday night at the historic Banqueting House on Whitehall. I was impressed not only by the grand architecture but also by ICB’s Garry Carter’s vision for the bookkeeping profession and with the reverence and importance that was conferred upon bookkeepers by HRH Prince Michael of Kent (ICB’s patron) during his talk.

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