“There are 4.8 million people out there that will need to be using accounting software by April 2019,” says Karen Lowen, founder and managing director of Dod-dle, a fuss-free, cloud-based accountancy software.
Lowen got the idea for Dod-dle when she first heard about MTD’s digital record-keeping requirements. She took experience as an accountant and dove headfirst into the world of financial technology.
“To me, there was never a question of whether Dod-dle would work because people need this software. Once I found a developer I wanted to work with, they were very excited about Dod-dle and never saw it as a risk.”
However, Lowen did have to confront widespread resistance to MTD within her sector when developing her software.
“Some people would see making tax digital as a threat, whereas others see it as an opportunity,” Lowen says. “I think it’s a good thing, because I have a large number of clients that don’t really keep any records to speak of, and now they’re being encouraged to keep their own records. If you’re going to run a business you should at least have an idea of whether you’re making any money.”
Sink or swim
Digitisation and the adoption of fintech, Lowen argues, are necessary to ensure that the UK economy can keep up with other countries. In a shifting technological landscape, where transactions are increasingly tracked and completed online, refusing to modernise is not an option.
“There are lots of countries out there, such as Estonia, that are fully digital and have been for a long time,” Lowen says. “In the UK we’re still quite archaic, with our pieces of paper to file every year, and we really should be leading the way in technology.”
Before accountants can embrace the digital future of the sector, they must come to understand the technologies that are driving it forward. Lowen believes that continued learning, whether it’s self-directed or part of a course, is necessary to stay relevant in an industry experiencing technological and legislative changes.
“As accountants, we are quite adaptable people,” she says. “If you think about it, we have to adapt to new legislation every single year. So it’s crucial that we keep our continuing professional development going because otherwise we will start to fall behind.”
Lowen believes that while digitisation will have an impact on the businesses of bookkeepers and accountants, it won’t threaten the demand for these services. She feels diversification is the key to keeping a firm afloat with technologies like Dod-dle automating part of an accountant’s role.
“I think we’re now on the verge of the biggest shift ever in the accountancy world. The fact that HMRC is asking the entire country to go digital is a huge thing,” she says. “There are opportunities for accountants to change their role from one where you’re simply inputting data to one where you’re advising clients on the data that they’ve put in themselves.”
Lowen’s advice for MTD
1. Find new ways to offer value to clients. Diversification is a good way to make sure your business stays relevant and is less vulnerable to changing circumstances.
2. Adjust your attitude. If upcoming changes seem daunting, try thinking of them as opportunities for development. Think about how you can add value for your clients in a newly-digitised world.
3. Never stop learning. Diversification becomes easier if you think of it as part of your continued professional development. Seek out courses and resources that will help you get your head around the new requirements of your role.
4. Don’t let risks stop you. Expanding your business might involve taking some financial gambles, but if there’s demand for your service you’ll see a return on your investments in the long run.
5. Trial and trial again. When it comes to MTD, accountants shouldn’t be afraid to try out multiple types of software. What works for one firm might be a nightmare for another. Keeping trialling solutions that work for you.
This is the second story in a three-part series about Dod-dle. In the third part, AAT Comment will speak to Karen Lowen about how entrepreneurs can find funding to expand their businesses.
Sophie Jardine is an editorial assistant at Flibl. She writes, researches and reports stories about finance and technology.