A journalist asked me this question last month. “What will accountants be doing differently in 2019?”
Before replying I gathered my thoughts which I now share below. For reasons which will become obvious I didn’t say all this when I spoke with the journalist!
As usual there’s an implicit assumption in the question that all accountants are the same. That they all do the same things and therefore that any advice I offer will be of value to all of them.
This is not how I operate as I know all accountants are special and different. You have different backgrounds, experience and expertise. You provide your services in different ways, communicate differently and respond differently to client questions, challenges and opportunities.
Those accountants who focus on compliance work (and who are probably the intended focus of the question) produce the same accounts and tax returns. But how they do this will vary.
Why would anyone with any sense make generic pronouncements as to what all (or even the majority of) accountants need to do differently in 2019? To do so almost betrays a lack of genuine understanding of the profession and limited experience of the variety of accounting firms and practices in the UK.
Presumably the magazine editor has decided this topic would make a good article. But who will it help really? Who will find it of value?
An increasing number of accountants have already evolved their practices so that they are less reliant on low value compliance services. This is a trend I expect to continue over the next few years.
Equally, experience suggests that a majority of smaller accountants will try to avoid doing anything different in 2019 as compared with previous years. Gentle evolution is their preference and, even then, only to the extent absolutely necessary.
Having thought all that, either I had to offer my thoughts or the journalist will quote someone else!
So, with those caveats, here is a summary of my views as to what UK based accountants will be doing differently in 2019.
Making Tax Digital
Embracing MTD for VAT and charging clients reasonable fees for:
- moving them into the cloud (so that they are able to maintain digital records as required by the new law);
- providing additional services (if any) related to filing quarterly MTD compliant VAT returns; and, where appropriate
- preparing, reviewing and advising by reference to quarterly management accounts.
Seek out new locally based VAT registered business clients who need similar advice and service re MTD and whose accountants are not adequately addressing the issue. This will typically be because they have their head in the sand or they hope that they can simply use bridging software to address the issue.
Migrating to the cloud
Accountants who have yet to migrate their own firm’s finances into the cloud will finally do so.
This will enable you to better appreciate the consequential business benefits, time saving opportunities and related advantages to your clients of using cloud accounting. It’s not just about the platform itself.
Once your practice affairs are in the cloud you’ll be much better placed to appreciate the benefits of easier invoicing, matching of creditors, clients and payments, automated bank feeds, mobile receipt capture and how to choose from the hundreds of apps, extensions and add-ons.
Firms will also ensure that all relevant partners are kept in the loop here too. This will make it much easier for everyone to offer more enthusiastic, compelling and informed advice to clients who have yet to migrate into the cloud.
Pro-actively offering more strategic business advice. This needs to be sufficiently valued by clients that they are willing to pay good fees for this recurring service.
Over time, not necessarily during 2019, more accountants will evolve their practices so that they are no longer bogged down by recurring compliance focused work. This will simply be the spring board that allows the accountant to focus more on advisory work.
Developing key business skills
This is one of my pet topics. It follows on from the above point. There is a need for more accountants to build and develop expertise in a wider range of business and advisory skills. The sooner you do this the better prepared you will be to grow the advisory side of your practice proactively. And the better prepared you will be to pitch such services and to win clients who will value and pay for such advice, guidance and support.
Strategic planing for the practice
Many smaller accountancy practices are at a stage where they are comfortable. The practice is a reasonable size and there is no great ambition to continue growing.
The challenge facing accountants in 2019 is that the marketplace is evolving. Never before have we seen so many adverts targetting small business clients with bookkeeping software. MTD is a once in a generation shift in legal obligations that accountants can use to build their practices. Many less prepared smaller firms will start to lose clients to more marketing-savvy competitors. I doubt it will be as ‘easy’ (if it ever was) to win new business to replace the lost fees.
Some older accountants are planning to retire and sell up (if they can) rather than start doing things very differently. If that’s not a realistic option you will need to develop a strategic plan for your practice, the level and nature of the support you need, the resources you will require and how you plan to survive and thrive beyond the next 12 month.
Life won’t change over night. But it will change – as it did when the self assessment system was introduced and when the small company audit was abolished. Accountants adapted and survived.
Is ‘survival’ enough for you? Did you train and qualify as an accountant to run your practice (or to work for one) that has no strategic plan; that operates on a wing and a prayer? Do you accept your clients hopes, dreams and wishes as evidence that they will succeed in business? Since when has that been enough for anyone? It’s not right for clients and it’s not right for you – especially if you aspire to offer strategic business advice to clients.
So my final suggestion as to what UK based accountants will be doing differently in 2019, is that they will do more strategic planning for their own firms, future and livelihoods. The writing is on the wall and things are changing faster than ever.