Technology in accountancy will benefit businesses now and in the future
Accountancy services have changed dramatically over the last decade. Once maybe viewed as a necessary evil and nothing more than a tax return or payroll services facilitator, accountancy was an expense for businesses simply to help them meet statutory duties. However, the last decade has seen forward-thinking accountants look for ways to add value to businesses, particularly in a changing economic climate spurred by the recession.
Many accountancy firms have looked to up their game and add fixed-fee options to their offering. Services providing a higher level of support with strategic planning, management accounts and regular health checks – alongside business protection services helping with issues such as financial checks – have emerged and benefitted businesses infinitely. But as technology evolves and permeates every sector (and indeed every aspect of life), how will this bear on accountancy services?
Technology in accountancy gathering pace
The main technologies that have affected the accountancy arena are sophisticated software packages such as Xero. Offering a cloud-based system to digitise everything from receipts filing and mileage logging to invoice generation and recurrence, it has transformed the way businesses handle their book keeping. This move to app-based software will continue to evolve and gather pace, and more and more businesses will adopt this technology as they favour a way to do business ‘on-the-go’, making life simpler. It has also made it significantly easier for accountants to do their job – with all the necessary ‘paperwork’ in one place.
Many businesses have thus far been using Sage – a popular accountancy software – and Sage has responded to the emergence of software competitors with the launch of Sage 24. At Adams Moore, we offer both Xero and Sage 24, to provide clients with the best systems available. Both of these allow us to log into the software and access all accounts at the end of the year, making tax return filing stress-free.
Additionally, Making Tax Digital, HMRC’s plan to make it easier for businesses and individuals to manage their tax efficiently and accurately – effectively spelling the end of the tax return – is currently being piloted and could be live by 2019. This would see all businesses having access to their own personalised digital tax account, making use of real-time technologies and allowing HMRC to interact digitally with businesses.
How accountants will continue to add value
You might think accountants could be quaking in their boots with the thought of technology in accountancy potentially doing them out of a job. However, there will be a variety of ways that accountants can still add lots of value for businesses. Whilst software will just keep growing and impacting the sector, and digitisation continues to emerge, businesses will increasingly need advice and assistance. Business owners will need to ensure their accountant is tech savvy and can use the new technology – as well as have the capability to keep abreast of the roll-out of HMRC’s Making Tax Digital. These two developments alone will see some of the ‘old school’ accountants fall by the wayside, as historically accountants generally aren’t keen on engaging in new practices!
Using a technologically enabled accountant means businesses will benefit from better tax planning as a result of available data (through accountancy software), allowing more effective identification of cost savings to be made. Another huge benefit of using accountancy software will be that accounts will be done earlier and more efficiently, and the business will be aware of its tax liability earlier and can plan better. We never fail to be surprised by the number of businesses who still leave accounts filing to the last minute and are then surprised by what they need to pay. Earlier accounts filing through efficient software = more time to plan for tax bills and negates a real headache.
Businesses should also bear in mind how other developments will drive a higher need for accountancy advice. With the changes to dividends being taxed, and tax relief on rental properties, the knock-on effect on businesses is still happening. There is also auto-enrolment to consider – something which is affecting many business right now and will be compulsory for start-ups in the near future.
When looking for an accountant, businesses should look for a good mix of new technology offering and a demonstrable ability in using them, value-added services and a proven track record in staple accountancy functions and business advice. Embracing new technology in accountancy whilst having firm roots in traditional services is what any successful accountant of the future should aspire to.