A survey by software company IRIS found that moving clients to bookkeeping software continues to be the greatest business challenge, for 66 percent of those surveyed. Four out of five, or 78 percent, practice clients still use spreadsheets.
The MTD for VAT deadline is this coming April. Yet many accountants have been forced to compromise, preparing digital records on behalf of their clients. They have also been turning to ‘bridging software’ as an interim solution.
The survey, of 385 practices in November, found that 60 percent of practices will continue bookkeeping services for their clients.
IRIS chief product and marketing office Nick Gregory said the problem for many business owners is that they see filing their tax documents as a chore.
“I didn’t go into business to do bookkeeping. I went into business to do what I love,” he said. “Accountants are delivering a service to their client, and in many cases, that means taking this problem away.”
He said that many small business industry bodies have not been vocal enough about MTD.
“We are heading into the era of Brexit, so we need to be as competitive as we can be,” he said.
Meanwhile, those companies which have already made the move towards full digitisation have been able to see benefits such as a reduction in overheads and a more efficient tax filing process.
An opportunity for accountants
While some may see the move to MTD as more work, others have found an opportunity in clients’ resistance to change.
Nick Gregory said an accounting firm called The Bailey Group has set up a service taking clients’ physical documents away, scanning them in to the cloud, and from there uploading them to software. The process for the client is the same, and the accounting firm takes care of the digital part of the process.
“It is a business opportunity,” he said. Those who can be assertive and move their clients towards digital bookkeeping can then concentrate on more lucrative advisory services.
Bridging the gap
IRIS gives bridging software to accountants free of charge, as many manage the transition in this way.
“Bridging software is a compromise, and you are delaying the inevitable,” Gregory said. Some software will take information from spreadsheets and send it to HMRC digitally, but it still falls short of full digitisation.
“It is a soft landing for accountants who need to transition.”
Nevertheless, those who are waiting to see if the timeline changes, as a recent House of Lords report called for the Government to do, could be in for a shock, he said.
“MTD for VAT is happening. If practices do not make changes until the legislation comes into force, they are likely to face even greater issues.”
In a bid to unravel the process, IRIS has created a five-step MTD programme to help accountancy professionals prepare their practices for all types of client without too much disruption.
IRIS is taking the programme across the country in its forthcoming, free of charge roadshows which will detail the implications for practices and their clients, as well as demonstrate how MTD can be turned into a profitable revenue stream.
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