Self Assessment introduced in April 1996 was the largest revision of the UK tax system for decades and was ‘the industrial revolution’ for many accountancy practices.
Prior to the introduction of Self Assessment it was not uncommon for tax returns to be two or three years behind. In those days a late tax return resulted in the issue of an ‘Estimated Assessment’ of tax. An ‘Appeal’ on the grounds it was ‘estimated’ prevented collection of the liability and nothing happened until eventually the appeal got listed for a Commissioners Hearing. In some practices this was the signal to start preparing the accounts.
The introduction of Self Assessment, heralded by the Inland Revenue with a massive advertising campaign in the press, on radio and TV together with the threat of Automatic Penalties for late submission meant that a client’s affairs had to be brought up to date.
For many practices this was a major challenge and many resorted to introducing technology. The use of PC’s and accounts preparation software improved performance and efficiency and they prided themselves on bringing their clients affairs up to date and managing to file their clients returns before the 31st January deadline thereby avoiding the threatened Penalties.
With the introduction of Electronic filing the writing was on the wall but many failed to see it. Electronic filing was not the end, but the beginning of a new revolution.
Sixteen years later many accountants are still working late nights and weekends in December and January to prepare accounts that are needed for the next tax return deadline. They are ‘Chasing History’, the accounts they prepare are so far out of date they are of no use to the client other than to satisfy the statutory obligation to file accounts. Blinded by compliance dates and just surviving to get clients VAT Returns and Accounts filed by HMRC deadlines, these accountants do not realise that their clients need more.
In the last five years the next ‘silent’ revolution has crept upon the accountancy profession. Advances in technology have given consumers, instant messaging, online banking, instant answers to ‘Google’ searches. The ipad, tablet and smartphone have created a new generation that have come to expect instant access to everything. Access on the go to their social life but it doesn’t stop there.
The advent of cloud computing and new software means the modern entrepreneur can have access to their business records 24/7 from wherever they are in the world that has an internet connection.
Accountants that have embraced this have changed their role. They no longer chase history, they are helping their clients to have ‘real time’ accounting information and have become advisors and taken on a Finance Director role with their clients business. They have realised that their clients can have instant access to all their business data but need it interpreting so not only can they see where they are today, but where their business is going tomorrow.
To survive in business today entrepreneurs need quick and current information, accounting history is not as important as it once was, “Ask any bank manager”.
If you are still chasing history for your clients and need help in giving them real time information, maybe Corient could help, with our low tech solutions to hi tech problems.
About the Author
Barry Pendleton is a Lead Consultant at Corient Business Solutions and has experience of more than 25 years in managing accounting practices. He works with Accounting Firms to improve practice performance and reduce costs. He can be reached out at firstname.lastname@example.org or you can visit www.corientbs.com for further information