As more compliance is forced on business owners and the systems we’re required to follow seem to get more, not less complicated I believe it’s time accountants did more for their clients.
Most business owners do not want to be an involuntary tax collector for the Inland Revenue. But when it comes to quarterly accounting for VAT or operation of the PAYE system that is just what those of us in business are to HMRC. VAT and PAYE are such important sources of tax it is unfortunately unlikely that this position is going to change any time soon.
Just to add insult to injury there are also draconian fines associated with not operating this enforced tax collection system properly. And in the interests of simplicity (read ‘cost reduction’) we now have online returns for VAT, Corporation Tax and enforced tagging of company accounts to allow compulsory filing of accounts to HMRC online. This latter HMRC initiative is creating havoc in the accounting profession as firms struggle with the tagging technology (called XBRL) required to file without rejection. Not to mention the additional time and costs this creates and the need to recover this from clients or simply absorb it as a direct cost of the firm.
In business there are a plethora of demands on business owners’ time. The priority has to be looking after existing customers and finding new ones. Few people have the time to worry about how to comply with the PAYE system or tag statutory accounts for filing. Most look to their accountants to deal with these matters along with helping with weightier, more commercial issues.
Business owners are not only being squeezed by more compliance responsibility but also from a sea change in the commercial environment. The buffer of easy bank lending, access to cash by property remortgage or credit card borrowing have been taken away by the banks and general squeeze in lending in the past 18 months. This is causing more business owners to rely on up to date management information to manage cash flow and make better informed business decisions.
These pressures come at a time when companies are struggling with more commercial issues fundamental to their financial success such as:
- How to grow their business
- How to generate more profits
- How to manage cash flow better
- How to protect key assets
- How to plan for the future
- How to minimise tax
For many companies the answer lies in outsourcing the accounts production to their accountants. This is now becoming a financially compelling solution, brought about by the advent of low cost on-line accounting software and direct bank statement feeds from a company’s bank account and credit card statements. Company administrative staff enter sales and purchase invoices and other data processing tasks under the direction of the accountant. The accountant then completes the accounts from the base data, makes the management information available online and can even hold an online meeting.
The benefits speak for themselves – better record keeping due to the regular supervision by qualified accountants, up to date management information to support business planning and decision making, early warning of any financial problems as well as the all important compliance when it comes to things like VAT and PAYE.
So here’s my commitment – at Parker we will do more, taking the compliance burden away from our clients while equipping them with up to the minute information they need to run a successful business. Is the rest of the profession prepared to follow my lead?
Chartered Accountant Birmingham