You're already familiar with MTD
Here in the UK, HMRC is trying to make keeping on top of tax affairs easier. Making Tax Digital, or MTD as it’s more commonly referred, is the 5-year project that will achieve this, planned for completion in 2020. But the deadline every accounting and bookkeeping firm in the UK is focused on right now is 1 April 2019.
From this date, VAT-registered businesses with turnover above the VAT threshold (£85,000 at the time of publishing) will be required to maintain digital records and submit their VAT returns via MTD-compliant software. Many of the major software vendors in the accounting space are on track to be MTD-compliant by the deadline. Some have also put together brilliant resources for accountants and bookkeepers to ensure they’re on top of MTD, such as:
This is the entry point to cloud accounting for many firms’ clients
While cloud accounting isn’t new to many UK firms, it can be for those clients who are more traditional. The push towards digital that MTD is providing brings UK firms a fantastic opportunity. The opportunity to finally bring their non-cloud clients into the world of cloud accounting.
We’re all aware of the manyfold benefits of cloud accounting, such as:
- Speed - At every step, from bank reconciliation through to invoicing
- Simplicity - Software designed with usability in mind, free from the inefficiency of legacy systems
- Security - No more out-of-date on-premise software (or worse, loose sheets of paper!)
- Power - With hundreds of add-ons available, cloud accounting software can be augmented with powerful, value-adding apps in just a few clicks
But there's still a huge problem
Despite the major vendors being on-track for MTD-compliance, industry figures are painting a different picture for accounting and bookkeeping firms.
Matt Flanagan, MD of prominent cloud solutions consultancy BlueHub, has suggested only 10% of firms are ready, with the overwhelming majority not.
“I’m speaking to a lot of firms, and a number of other industry figures, and the consensus is that very few firms are completely ready for April 2019 right now. I’d say 90% of firms just aren’t there yet. There’s a lot of work left to do.”
In taking advantage of the push towards digital that MTD is offering, one of the biggest battles UK firms are now facing is bringing their non-cloud clients over to the cloud.
Despite the great opportunity that MTD presents businesses to move to and reap the benefits of cloud accounting, some clients get caught up focusing on false negatives. To these “legacy” clients, the forcing factor of MTD moving them to cloud surfaces 3 major issues:
- Time cost - Every minute you and they spend on shifting from their current systems to cloud accounting software is seen as an unnecessary time waste in their eyes.
- Financial cost - Every pound paid to you in shifting them from their current systems to cloud accounting software is seen as money not well spent.
- Fear of change - There’s a reason these clients haven’t made the shift to cloud accounting software by now. They just inherently don’t buy into it. This change being “forced” on them by legislation naturally isn’t taken well.
Without addressing these issues, accounting and bookkeeping firms place themselves at risk, and not just to the client relationship. “Anti-cloud” clients that aren’t properly onboarded to the world of cloud accounting pose a risk of opportunity loss to firms. They are more resistant to future advice or guidance from their accountants and bookkeepers. Particularly in the area of tech.
But there is a strategy you can apply to remedy these 3 perceived negatives in your clients’ eyes: leveraging your app stack.
Here's MTD with a difference
By bundling your clients’ transition to cloud accounting with key apps, you give yourself strategic counterpoints to each of the above issues. In providing your clients’ cloud credit control software such as Chaser, you deliver them:
- Time savings - Cloud credit control software recuperates many multiples of time “wasted” moving to cloud in the time saved conducting credit control. The average Chaser user saves over 7 hours every week. And it’s not just time being saved for the same result, either - Chaser ensures your client’s business gets world-class credit control, week in week out - consistently.
- Cash flow boost - Cloud credit control software brings significant improvement to cash flow. Chaser’s average user boosts cash flow by £4,400 per £100,000 turnover. And results are seen quickly. One client of Chaser partner Kinder Pocock’s reduced their overdue debt from £27,000 to £5,000 in just 6 weeks of using Chaser.
- All in one, value-adding package - The reality for your firm and your clients is that MTD is coming. And you will likely be moving them to cloud. By bundling in apps like Chaser for credit control (and other essentials like purchase ledger and expense automation), you make the cloud accounting pill much easier for your clients to swallow. You can completely transform their mindset from “I’m being forced to make a non-beneficial change” to “I’m getting instant, substantial, permanent improvements to my business!”
Matt’s a strong supporter of firms leveraging their app stack as part of MTD, during the run up to 1 April 2019.
“By offering key apps, particularly Chaser, at the start of the MTD journey for these non-cloud clients, firms are giving themselves an excellent way to add value and make these clients sticky. You could even gain your firm new clients by pushing this narrative where other firms aren’t.”
Chaser gives your firm the MTD that all your clients can get behind - Minimise Those Debtors! Learn more about the benefits of being a Chaser partner here.
Header image modified from photo courtesy of Jamie Street via Unsplash.
