It’s possible that MTD might have been making headlines for all the wrong reasons. We’ve heard too much about practices shedding their hard-earned pounds in the change management required to switch to digital or some even calling it quits, unable to bear the stress of additional compliance. But is that all MTD has brought to the business yet? what’s on the other side of the story?
“It has been a catalyst to move in the right direction,” said Mel Dowie, a Network Account Development Consultant at ReceiptBank. “I know that some of the clients that I go and see have left it to the last minute and it has become a bit of a burden for them because it’s a change that has to happen I guess, but nothing too surprising otherwise.”
In a recent webinar conducted by ReceiptBank on tackling the major issues plaguing accounting, Dowie and some other veterans of the industry – Alastair Hayward-Wright, the proactive advisor and the director of the Hayward-Wright Group, and AccountingWEB’s Richard Hattersley– break down on how MTD unfolded in ways that helped businesses in some unexpected ways.
The Snowball effect
It’s a no-brainer, isn’t it? Even though MTD is a significantly small step in the remoulding of accounting into a digitised profession, it’s making some big waves in the internal processes of most practices.
“It was a real kind of a snowball effect when people really did buy into this,” said Hayward-Wright. “We can tweak our internal process to make us a lot more streamline in the background, releasing more time for the senior guys in the team to do the advisory stuff which is where the industry needs to move to”
In short, MTD is a push for practices to remould into advisories. It essentially frees up time for traditional practices to upskill staff, reducing the errors that could result in penalties for things like late filings and improving the accuracy of your financial data so that practices are more consistent.
Or in Dowie’s words, “It’s simple. Tech helps in streamlining workflow better, leading to scope for building advisories.”
Here’s another way how MTD has opened our eyes to manage processes digitally. All tax information is going up in one-easy-to-access system, making practices take a giant leap from the double-entry bookkeeping system that was invented in the 15th century.
In fact, some early-bird practices got a great deal out of switching to a digitised tax system before the rest of the crowd.
“We addressed our processes early on. In the background, streamlining the on-boarding process and make bringing more clients on; we expected to bring a lot more clients on and thankfully, I can say that happened,” said Hayward-Wright, owner of a Midlands-based practice.
“So we needed to make sure our internal process for onboarding was slick. It made the relationship with the client a lot easier to handle throughout the life of that relationship.”
MTD has also significantly increased visibility in tax processing. Tax affairs are now visible in real-time and businesses don’t need to wait until the end of the year to know how much tax they will have to pay upon filing a return.
In fact, a few months into MTD, some strong opinions against the system have massively overturned.
According to Accountancy age, 49% practices agree on benefitting from MTD due to the increased efficiency of doing the taxes.
It’s true – businesses who comply with MTD are needed to provide information that HMRC can get from other sources, such as banks and other government departments, making processes easier for the tax-payer and the businesses. Having instant access and visibility of your tax liability every few months has helped to reduce the risk of being hit by any big surprise bills.
The Workflow Mentality
On the internal front, MTD has set off quite a trend in pipelining digital workflows. Mimicking the digital system’s glass-smooth workflow and employing the same in various internal processes such as onboarding clients, quoting to sending off the invoice all through various project management software – many businesses are sailing smooth. For example, WorkflowMax is one such software used to set a workflow within a system so that it’s entirely automated.
The workflow mentality is slowly creeping into all internal processes eliminating the to-and-fro, hold-ups and lack of organisation that often clot the pipeline of day-to-day accounting work.
“MTD has awakened the profession’s interest in managing digital workflows. Accounting Excellence entries show the workflow mentality popping up in other areas such as onboarding clients and managing internal practice processes and resources,” said John Stokdyk, AccountingWEB’s Head of Insights.
A Silver Lining in the Cloud
Despite the noise around MTD, cloud accounting is nothing new. But for a long time, the issue was convincing clients to adopt this outlook. However, with time, that is changing too.
“We’ve moved the more tech-savvy clients to the cloud and now we’re working through those resistant to change. Even those guys are starting to see the benefits and it allows us to work closely with them,” said Hayward-Wright on clients coming to terms with MTD.
The idea is to make practices to embrace cloud technology. By scanning clients’ receipts and paperwork, and using OCR (optical character recognition) technology to digitise them, practices can remove the time-consuming keying-in of receipts and coding of transactions. It’s faster, simpler and results in the digital data you need for MTD.
What you get is a far more effective and streamlined bookkeeping process, making it easier to record, find, search and submit tax information to HMRC.
A few months into MTD, practices that have been ready to adapt, seem to have found the bridge over troubled waters. But for those who may still feel that the digital world is not for them, only time will tell.
Hopefully, this should help you tackle the biggest challenges that come in your way while scaling your practice. Is there anything else you’d like us to cover? Tweet us @QXASLtd
A big thanks to Recieptbank and the expert speakers for conducting a much-need seminar on the biggest accounting challenges:
Melanie Dowie, a Network Account Development Consultant, ReceiptBank
Alastair Hayward-Wright, Owner and Proactive Accountant, HWA Group
Richard Hattersley, Practice Editor, AccountingWEB
My name is Rishmita and I’m an aspiring journalist and blogger. I love telling stories – of people and brands. When I’m not too busy typing out incessantly on the computer, you’ll find me reading some old American classics or petting some furry stray cats.