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Future-fit advisory best practice for 2021 and beyond

In terms of business continuity and growth, how can advisers learn from the events of 2020 to help future-proof their businesses? What has become clear is that, in times of crisis and in terms of business continuity, advisers need to be the trusted partner that takes away complexity, concerns and unnecessary costs that can threaten business growth, writes Evan Jones.

Future-fit advisory best practice for 2021 and beyond
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  • Evan Jones
  • November 13, 2020
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Accountants and accounting technologies will prove to play a critical part in helping firms to deliver ongoing and continuous levels of quality service to their clients, supporting crisis management, continuity planning and ensuring a high level of business efficiency.

To accomplish this, practices need to be future-fit themselves, with a firm idea of applied best practice across the well known ‘people, process, and technology’ adage, with an additional focus on data. From the operational to the practical, here is what practices might like to consider to ensure business resilience both for clients, and for their practices.

Eliminate Inefficiencies

Small inefficiencies add up quickly, regardless of the size of your firm. For example, if you can save a few minutes or, in the case of large firms, a few seconds per personal tax return, that may mean several tens of thousands of clients, resulting in a lot of time saved.

To illustrate this, consider the Making Tax Digital (MTD) initiatives. They have been designed with accuracy and efficiency in mind, but in some instances, both practices and their clients have experienced difficulty in filing during the rollout of MTD for VAT in 2019.

MTD for Income Tax Self-Assessment (ITSA) has now been mandated to commence in April 2021 for all self-employed businesses and property landlords with revenue in excess of £10,000. The big difference is that with ITSA, people will have to report their earnings and expenses four times a year rather than once. There is a very real risk that inefficiencies will mount and severely impact practices who are not prepared. However, there is an opportunity to use the next year to prepare, and to put education and technology in place to address the volume of work and to create processes that will flex with the new requirements.

Future-fit firms have been educating their clients on the benefits of digital record keeping, while also investing in tools to automate bookkeeping, so that this can be done incrementally rather than all at once.

Evaluate the latest technology

Technology on its own is not a silver bullet, but as in the example of Making Tax Digital, it is worth evaluating whether your existing technology is up to scratch, especially from a time savings point of view.

For example, if you had the potential to save something like £25,000 (for illustrative purposes only) worth of chargeable time across the entire business due to the automation of various tasks, it’s probably worth considering an investment as a one-off to make a process more efficient. Small inefficiencies become expensive very quickly.

Having the latest technology can make or break how efficiently a practice operates during a crisis. For example, moving from spreadsheets to an online document management system as part of an integrated suite, will allow practices to store information in a single central location safely online, which can, if desired, be accessed by your team or your clients from any location.

When working in a distributed way, having products that enable all the team to see all client emails and correspondence has become part of a future-fit strategy. Other tools such as messenger apps and instant information sharing tools will enable everyone to have access to key information and ensure efficiency. Task management and workflow products will ensure that, as a business, you can see what is going on, who is doing what and what any potential problems might be.

It is also worth considering expenditure on hardware and software, and whether the spend makes sense economically. Cloud solutions are arguably the future of the tax and accounting profession but a great option for the short term is a hosted solution. A hosted solution means no investment in IT servers, backups, or software patches, but still allows a business to use functionally rich products on any device – even an inexpensive laptop or tablet, because all the computing is done on a remote desktop.

These solutions can offer additional security. Central storage of documents secured by individual user logins helps protect client information and make disaster recovery easier. Sensitive or personal information can be encrypted and shared with only authorised recipients rather than being shared via email with the risk of the message being accidentally sent to the wrong person.

When evaluating products, it’s essential to find something that works for the practice now, but also to consider where it will be in three, five- and ten-years’ time. One of the most valuable assets in any practice is its data, and managing it is possibly one of the most resource intensive tasks in a practice. Make sure that when looking at apps or products that they meet the practice’s data needs now, and that they will continue to do so as your business grows. 

The little things that count

Practical, day-to-day measures are often overlooked in ramping up business and operational resilience. However, for smaller firms in particular, it is important to avoid large capital expenditure that commits too strictly to products, locations or physical “things.” For example, it may be that leasing an office is unnecessary, and working from home or hiring meeting rooms when required is sufficient. Phone systems are another big expenditure that may not be needed, especially when it has become so straightforward to virtualise these.

If you are a small business, time is likely to be at a premium, so it is worth considering investing in technology for the real world that automates processes and makes your life easier; whether this is taking on clients, servicing them or billing them. Internally, it’s also worth investigating whether your own processes are time efficient. Many businesses have become institutionalised around having 30- or 60-minute meetings. But what about considering 25- or 50-minute meetings instead? Could the same result be gained in less time?

We’re hearing from our customers that, in seeking to become future-fit to avoid potential business disruption, they know that it’s not just about being able to adapt to change, but seeing an opportunity to capitalise, pivot and grow during times of uncertainty. In looking at changes both big and small to areas that can be streamlined and made more efficient, practices will be well prepared to help their clients through difficult times and maintain continuous levels of quality service for the long term.

Evan Jones, lead technology product manager, Wolters Kluwer Tax & Accounting UK

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