Digital skills: one of the top 5 skills needed for high paying jobs

Posted by & filed under AATPowerUp, Career, Skills.

Digital skills of some kind are already a prerequisite for most jobs in finance – and there is little doubt the need for digital expertise will continue to grow across all sectors over the next 10 years.

Honing your digital skills can also help you to progress in your career, according to AAT’s recent survey of 2,000 workers from across the UK.

Of those surveyed, 23% chose digital skills as one of the top five skills you will need to get high paying jobs in the future.

As part of our AATPowerUp series we take a closer look at why digital skills are so valuable. We suggest some ways you can develop your skill set to improve your chances of landing a job with a high salary.

The future of digital

IT giant Microsoft’s figures indicate that 90% of jobs will require some form of digital skills within the next two decades.

Paul Yates, a director at global recruitment consultancy Harvey Nash, agrees that digital skills are becoming more and more important in the modern workplace.

“There is no doubt that employees today are expected to have more digital skills than they were even a few years ago,” he said.

“If you are looking at accountancy roles, for example, you will need to be able to use financial software programmes.”

Three reasons companies want people with digital skills

Higher productivity levels

With the right training, employees can use digital technology to become more productive.

Digital documents, for example, can be created, stored and accessed more efficiently than printed versions, but only if employees know how to use them.

Innovative working practices

Technological advances facilitate the introduction of new, more effective ways of working.

Examples of this include video conference calls and cloud-based applications.

Having the digital skills to take advantage of these innovations, and help others to do the same, will make you a more attractive candidate for leadership roles.

Improved customer/client relations

Today, businesses need to engage with their customers and build relationships via a diverse range of channels, including websites and social media.

Mastering online marketing and related digital skills will therefore make you a more valuable asset, which should in turn allow you to move up to a higher pay grade.

Three ways you can improve your digital skills

  • Identify the skills you need

Different roles require different digital capabilities, but there are some universally useful skills.

Nick Bass, global HR director at communications agency Isobar, said: “Whatever you do, your role is bound to involve data because it underpins everything we do.

“So skills such as knowing how to manipulate data are important across the board.”

If you want to move up the ladder on the strength of your digital skills, wide-ranging knowledge is also likely to be a bonus.

“I think any employer will value an employee who has an understanding of a variety of digital skills, coupled with deeper knowledge in a certain area,” Bass said.

  • Research new technological trends

In this fast-paced digital world, it’s important to regularly update your skills to avoid them becoming obsolete.

“You need to keep your finger on the pulse and keep your skills up to date or, if possible, ahead of the game,” Bass said.

It’s also a good idea to keep up with technological trends by reading blogs and newsletters so you are prepared for any big changes to how you do your job.

This is known as “future proofing” your career.

“Look at the industry you work in and try to work out what could be automated in the future,” Yates advised. “If you work for a car manufacturer, for example, you might want to concentrate on the skills you will need to manage a robotic assembly line.”

  • Sign up to a digital skills course

As explained above, you have to keep your digital skills up to date to remain relevant and have a better chance of being chosen for well-paid positions.

So even if you have taken course in the past, updating your knowledge or learning about a new sphere, is a good way to improve your chances of becoming a high earner. “We need to embrace the concept of lifelong learning, especially when it comes to digital skills,” Bass added.

Three ways you can take action now

  • Research the technology that is likely to shape your dream job in the future
  • Book a course that will help you develop the relevant digital skills
  • Consult AAT’s e-learning portal for tutorials and workshops on your chosen topic

Midnight oil: why long hours don’t necessarily lead to success

Posted by & filed under Career, Members, Run your business.

UK workers now spend even more time in the office than they did a decade ago.

And yet, all the research suggests that productivity does not increase in line with hours worked. So how do you ensure that you keep working hours reasonable – and what are the risks to productivity and mental health from not doing so?

Managing staff expectations

“Companies are really starting to rethink the expectations of their employees and how many hours they expect them to work, for multiple reasons,” says Natasha Wallace, Founder and Chief Coach at Conscious Works, a wellbeing and leadership development company.

“We have the lowest productivity in the G7, and yet we work such long hours; one in three suffer mental health issues in the workplace and burnout levels are increasing year-on-year.”

Wallace thinks the problem has now become urgent – “organisations are trying, sensibly, to get better performance from their people, and that doesn’t mean working them harder. We’ve learned that squeezing longer and longer hours isn’t sustainable – and with today’s technology, there’s little need to.”

Finding better ways of using work hours

In practice, Wallace recommends “recognising our own boundaries and the point at which we feel we are not being effective. Identify when you’re on autopilot and at this point, move into a different gear – find ways of spending the time better instead of continuing to do the same thing but not getting the results you’re used to.”

From an organisational point of view, Wallace says, “be very clear about what you’re trying to achieve and have really clear objectives for people to work towards. It’s not about telling people what to do at a granular level. Organise your efforts so people are concentrated on what matters.”

Blue sky mining – learning to be flexible

Flexible working in every sense is key here.

As well as avoiding the precise rigours of 9-5, 5 days a week, 47 weeks a year where possible, “align towards goals, not tasks. When you work towards something greater than yourself, it tends to motivate you – in equal and opposite balance to being stressed about things that matter less.”

People also need to recognise the fact that they’re working too hard.

“This is really important. A lot of observers assume that employees are only working too hard because leaders tell them to. But that’s not true. They want to bring value so they opt to work long hours to deliver it.”

To address this, organisations need “an environment of trust. Only where people can say that they’re feeling overloaded without fear of consequences, do you get a free flow of communication between people and leaders.”

Creating a positive culture

This takes practice, but creating a culture of “psychological safety” in this way is vital if our culture of overworking is to change.

“If you want to create an environment which is high-performance on the one hand but with good mental health on the other, you need to enable people to speak up.” However, “just telling people this does not create psychological safety. It has to come from micro-changes, and it has to be consistent and long term.” 

Not only can overworking have seriously detrimental effects on your health, it can also damage the work itself – and this is of particular importance for accountants.

“You’ll tend to gloss over stuff, you’ll skip over things, and your attention to detail isn’t as great,” says Mark Telford, Director at Telfords Chartered Accountants.

“Your standards might be lower – you find yourself accepting work that you would otherwise you would have checked again.” This, Telford says, “is one of the biggest mistakes you can make; to set high standards and then perform far below them is not something anyone wants to do.”

It’s here that the serious knock-on effects of overwork become apparent. “It can be critical to your business and your client. If you make a mistake in the work and it results in clients not submitting a tax return on time, they can get fined, something which damages both of you not only financially but also reputationally.”

On the flipside, Telford argues, “your client might be paying too much tax if you’ve overlooked tax savings opportunities, or haven’t had time to communicate with them properly because you’re so busy.” Clients will then start to question the quality of your work, “and think, why am I paying you when you’re making mistakes?”

Breathe

Are there specific tips for accountants to handle the bottlenecks at particular times of year?

“Historically, December/January is always regarded as the busiest time,” Telford says. “But I’ve never really bought into this; I believe it’s self-perpetuating. Accountants continually accept, I will be busy. They never say, ‘what am I going to do about it.’ If you ask that crucial question of yourself, it is possible to change things.”

Every accountant gets to the end of January and says “never again!” Telford points out wryly – “and then exactly the same thing happens next year. My approach is, look at it on a total global level. How much work do we have to do on annual basis, and what can we do to spread that workload across the year?”

This should be regardless of an income tax return due in January or a corporate tax return and set of accounts in June, he says. “If you have a deadline you tend to work right up to it, rather than thinking, I’ll take the pressure off and do it right away. This is just human nature. Instead, think – how can I do this work so it fits in with everything else?”

A big part of achieving this is that your clients need to be on-side.

“You do have to educate your clients as to what you’re looking to do and when you want to do it. And that means having good communication lines open.” If it’s a piece of work you want to finish in June, Telford says, “tell the client at the start of May that you’d like them to get the information to you by the end of May. Factor things in – we know that for most business owners, their accounts are not a primary objective, because they want to be growing the business instead.”

Ultimately, Telford says, “we typically have nine months from the end of an accounting period to deliver the return. Why not do it in months three to six, rather than scrabbling around with it in months seven to nine?”

Best of both worlds

At an individual level, “people need to recognise their own patterns of behaviour,” Natasha Wallace says. “Often we are on a treadmill – we don’t question the way we work or consider how effective we are. Lots of people assume they are working to a high rate but actually it’s about working a lot, not working productively.”

Producing high quality outputs “is a difficult thing,” she says.

“But it’s vital to recognise your own needs – not just in terms of mental health, but in terms of what nourishes you and makes you feel good.” It’s fine to have short bursts of working hard, Wallace concludes. “But working long hours over long periods isn’t, because it’s not sustainable.

“Be aware of your own working patterns, identify when you’re at your most productive and do the most complex work then, and detect when negative emotions appear. If you can see the patterns, you can change the parts that need changing – otherwise, problems can become deeply engrained.”  

Boost your Net Promoter Score – increase customer loyalty

Posted by & filed under Employers, Run your business.

The Net Promoter Score (or NPS) is recognised globally as the number one way to calculate customer loyalty and satisfaction.

It is based on asking your customers one question…

“On a scale of 0-10, how likely is it that you would recommend [company name] to your friends, family or business associates?”

How to calculate your Net Promoter Score

Based on the answer that the customer gives they are split into three categories.

Customers who give you a score of 6 or below are Detractors, a score of 7 or 8 are Passives, and a 9 or 10 are Promoters.

0 – 6: Detractors

7 – 8: Passives

9-10: Promoters

To calculate your NPS you’ll need to subtract the percentage of Detractors from the percentage of Promoters. So, if 80% of respondents were Promoters and 10% were Detractors, your NPS would be 70.

What is a good Net Promoter Score?

More important than considering your score in isolation is comparing it to your competitors (if possible), industry benchmarks and to your own previous scores.

Unless your score is 100 then you should always be looking for ways to improve.

How to implement a Net Promoter Survey

The whole point of the Net Promoter Score is that it is fast and easy to get the results, so don’t try to overcomplicate the process or spend too long designing a survey.

There are two types of surveys to choose from – a relationship survey or a transactional survey. A relationship survey will gauge customer loyalty to your brand or business, thinking about the overall experience, whereas a transactional survey will concentrate on a specific transaction or interaction like a sale or how a problem was dealt with.

The purpose of the survey

The survey should seek to find out more about why the customer feels the way they do about recommending you but it needs to be short. The ideal number of questions is three, five should be the maximum.

Always add an option for people to give more comments if they want to, you could also give them the option to be contacted to find out more.

Follow these tips to implement your survey:

  • Use a free tool like Survey Monkey or Google Forms to create and send your survey and to get the results.
  • The best ways to send out your survey are via email or SMS.
  • Personalise your surveys with the customer’s name for better response rates.
  • Keep your email subject line and introduction text short and simple and let people know that the survey won’t take long to complete.
  • Test your survey first with friends or colleagues.
  • The bigger your sample size the better but don’t worry if you have to start small.

How can you improve your Net Promoter Score?

The best way to improve your NPS is to ask for feedback and act on it, so conducting a Net Promoter Survey is a great start. What are your customers telling you that they’d like you to do more of and how could you differentiate yourself compared to others? Always think of feedback as a good thing, it’s an opportunity for your business to grow.

Consider implementing some of these tools and tricks to improve your customer service efficiency and your client engagement:

  • Social media platforms can be a really good place to interact with customers, deal with queries quickly and get feedback.
  • Live chat software on your website can decrease your support costs and increase conversion rates.
  • Make sure all email addresses you give out are to speak to a real person and not generic and impersonal help@, info@, accounts@ type addresses.
  • Have a policy in place for how long it will take you to respond to client queries.
  • Be consistent across the whole company with your service delivery. Conduct regular training sessions to help with this.
  • Make sure your website FAQs are actually written based on the questions you most frequently get asked.
  • Reward loyal clients (it doesn’t have to be a monetary reward) and thank all of your customers. 
  • Make sure you let your customers know about any changes that you’ve made from their suggestions.

The closer your relationship with your customers or clients, then the better you should be able to gauge their needs.

They are then more likely to stay loyal to you and recommend you to their business contacts, friends and family.

Take note of seven more ways that bookkeepers and accountants can increase customer loyalty.

Accountants: You need an agent services account for Making Tax Digital

Posted by & filed under Making Tax Digital.

HMRC has recently issued updated guidance, confirming that accountants and tax advisers need to create (sign up for) a single Agent Services Account (ASA) for their entire practice.

Under Making Tax Digital for VAT (MTDfV), it will only be possible for an agent to file MTD-compliant VAT returns or to access their client MTDfV information using an ASA credentials.

Presently, an ASA is required to sign up clients to Making Tax Digital, to register a client’s estate or a trust.

Today MTDfV, tomorrow the world

Although limited in what an agent can do with an ASA at present, in the longer run it will play a key part in both HMRC’s and Government plans to become one of the most digitally advanced tax administrations in the world (HMRC’s words, not mine).

Getting your ASA

There are a number of steps that you must take along the road to getting an ASA set up.  While even HMRC admit it is a bumpy journey, thankfully it is a step-by-step process.  

There  are certain things that you will need to have to hand:

  • Current Government Gateway ID’s and passwords
  • National Insurance number
  • Your practice’s UTR: if you are a sole trader it will be your own
  • You/your firms Anti-money Laundering registration details.

Stage 1 – the ASA journey

After inserting one of your firm’s existing government gateway ID’s (it doesn’t matter which at this stage) at the “Sign in using Government Gateway” screen, you will be required to select what type your agency is, i.e. sole-trader, partnership or limited company etc. 

The response you give will determine the subsequent screens you will see as you travel along your sign-up journey.

The next selection of screens require you to enter and confirm your firm’s business details, before leading you to a screen focused on anti-money laundering (AML) compliance. This requires details of your/your firm’s AML supervisory body, the membership number and the date of expiry of the registration. 

For most AAT Licenced accountants this will be easy; AAT is your supervisory body, you insert your AAT membership number into the “membership number” box and your membership renewal date into the final box on the screen.

Successfully navigating this first part will result in you being invited to “Create a new Government Gateway user ID”.

Inserting a practice email will result in the transmission of a short code to your inbox, which will need to be inputted on the screen.  The code is purely to verify your email address.

Next, you will be requested to give your full name and then create and confirm a password.

To guard against losing a password, users are prompted to “Set up a recovery word” before finally being issued with a new Government Gateway ID.

Take care to ensure that you save the Gateway ID somewhere safe.

You are almost there………completing the next five screens gets you/your practice an Agent Services Account.

  1. “Choose the type of account you need”: you should select “agent”.
  2. “Enter the name of the organisation”: insert the name of your practice.
  3. The final screen in this section will display your Agent ID.
  4. You will be invited to “Check your details before creating your account”
  5. Once confirmed, the final screen will confirm that your ASA has been created and in the middle of the screen you new account reference number will be displayed.

Make sure that you keep your Agent ID and account reference numbers in a safe place.

Stage 2 – Linking your clients listed on an old government gateway account to your new ASA

If you do not do complete the second stage, your new ASA will be empty. Simply put, it will not know about your existing clients.  While they will remain visible via your old Gateway accounts, they will be invisible to your ASA.

Start by typing in “Sign in to your Agent Services Account” in to the search box on GOV.UK. When you’re on the right page click on “sign in now” and after inserting your new ASA credentials continue through the next couple of screens until you reach a screen “Sign in using your Government Gateway”.

On reaching this screen you should insert your one of your old Gateway IDs and password, and click “sign in.” The next screen will confirm that you have successfully linked your old Gateway account with your new ASA.

This means that your newly established ASA account is aware of your clients associated with your on the old gateway account. 

The good thing is that the linkage with your old Gateway account is dynamic.  Which means, if another client is added to your government gateway account, your ASA will automatically become aware.

You will need to repeat the “Sign in using your Government Gateway” as many times as you have old gateway IDs and passwords.

One thing you need to be aware of is and which will come as a bit of a shock, is that while your ASA might know all about your old Gateway clients, you cannot view a client list from within the ASA.

Step 3: authorise MTD-compatible software

Before signing a client up to MTD, make sure you/they have MTD-compatible accounting software. 

If you/your client is already using software, make sure it is MTD-compatible and that its MTD capabilities have been enabled, but only after the client has been signed up to MTD.

Be careful: once the client has been signed up to MTDfV, all future returns must be submitted using MTD-compatible software, as the previous method will no longer work.

Step 4: Signing up your clients for MTDfV

Start by typing “Sign up for Making Tax Digital for VAT” in to the search box on GOV.UK and then, when you’re on the right page click on “sign in now”. After inserting your new ASA credentials continue to the  “What is your client’s VAT number” screen, at which point you should insert your client’s VRN and then confirm it on the next screen.

The next few screens need to input whether the business that you are registering is a sole trader, partnership or limited company etc. It will also request other details, such as name, National Insurance Number and date of birth.

The information that you  are asked to disclose will depend on whether the VAT registered entity is a sole trader, partnership, limited company etc.  Once done, you will then be required to confirm your entries. 

The next step is to supply an confirm a suitable practice email address, within 72 hours HMRC will email to confirmation that you client has successfully scribed into MTDfV.

The final collection of screens request you to input client’s email address, confirm if they wish to continue to receive hardcopy copy correspondence and finally submit the MTDfV registration.

HMRC will email confirmation (usually within 72 hours) to start using MTD software to submit the client’s return inform clients that returns are being submitted through Making Tax Digital.

Useful pointers

  • With the exception of the voluntarily VAT registered, once a VAT-registered taxpayer has been registered for MTDfV it is not possible to opt out of MTDfB, even when their annualised VAT-taxable turnover falls below £85K.
  • The only way for a compulsorily registered entity to leave is to deregister, but only if legally permissible.
  • When registering a client you will need to ensure that you have your client’s VAT registration number (VRN), their UTR and if applicable company registration number and national insurance number.
  • Once a client is signed up to Making Tax Digital for VAT, they will have to submit MTD-compliant VAT returns using compatible software or a bridging tool, and will not be able to continue using the existing system.
  • Businesses that pay by direct debit should sign up for MTDfV immediately after their final pre-MTD payment has been collected.
  • Deadlines for submitting VAT returns and making payments has not changed.
  • Those affected have to keep digital records and submit their returns to HMRC using MTD-compatible software for all VAT periods that started on or after 1 April 2019, or 1 October for the circa 4% of deferred businesses.
  • Each client needs to be signed up individually, or the client can sign themselves up.
  • When connecting software to HMRC you must use your new ASA Government Gateway ID.
  • HMRC will email confirmation (usually within 72 hours) to start using MTD software to submit the returns.
  • Although, MTDfV came into effect from the 1 April 2019, at  present it only applies to VAT registered businesses with VAT taxable turnover above the £85,000 p.a. compulsory registration threshold.

AAT takes a stand against plastic waste

Posted by & filed under News.

The actions of environmental campaign group Extinction Rebellion, which brought much of central London to a standstill over the Easter weekend, have again brought environmentalism into sharp focus.

The protests came just a fortnight after the EU announced plans to ban single use plastics by 2021 and a few months after the British Government launched a series of public consultations relating to plastics and curbing its environmental impact.

AAT has thought long and hard about what role we can play in reducing plastic usage as an organisation, amongst our membership and via our ongoing engagement with policymakers.

Early on, AAT recognised there is much that can be done not just by producers and the general public but by the wider business community. In other words, this is not simply any issue for the public and plastics producers, businesses across the board need to make more responsible choices in this area. AAT, like an increasing number of businesses, has removed almost all single-use plastics from its offices. Whilst Government legislation in this area may be useful, there is nothing to stop businesses acting now.

That said, AAT has achieved some welcome cut through in the political world too. Of the 160,000+ responses to last year’s Government consultation on tackling the plastics problem in the UK, the AAT response was singled out for praise in the House of Lords as offering a number of helpful proposals to reduce the use of single-use plastics by encouraging the development of alternatives and penalising the use of single-use plastic through taxation, charges, and behaviour change.

But we did not stop there.  Whilst backing recent Government plans for a Plastic Packaging Tax and a Deposit Return Scheme, we have been clear that both have significant shortcomings that must be addressed to ensure success.

Plastic Packaging Tax

Plastic packaging accounts for 44% of plastic used in the UK, but 67% of plastic waste. Over 2 million tonnes of plastic packaging is used in the UK every year, the vast majority of which is made from new, not recycled, plastic. 

The Government has confirmed that from April 2022 it will introduce a new tax on the production and import of plastic packaging and has initially proposed this will apply to all packaging with less than 30% recycled content.

AAT does not believe the 30% recycled content threshold is sufficiently ambitious and certainly cannot be considered “world leading” as the Government has repeatedly suggested.

There is a wealth of international evidence to suggest other countries are going further and when so many large companies have already committed to doing the same, it is clear that a higher threshold is needed. 

That’s why AAT has suggested a threshold of 40%, with a further increase to 50% in 2030 to ensure momentum is not lost.  This “roadmap” type approach would genuinely ensure the UK was at the forefront of tackling the plastics problem and remains so for the foreseeable future.

Government has suggested that small producers be exempted from the tax but proposals here are too complicated and cover companies that are still sizeable. As a result, AAT has suggested that only organisations operating below the VAT threshold (currently £85,000) should be excluded from this tax. The VAT threshold is already a widely recognised and understood threshold, so this should help maximise compliance too.

Deposit Return Scheme (DRS)

The DRS for drinks bottles and cans will see the cost of the deposit added to the price of drinks but repaid when consumers return their empty drinks containers to a designated returns point.

AAT, like government, believes this will significantly increase recycling and reduce littering.

However, some of AAT’s licensed members, who have small newsagents and the like as clients, will know that the impact of a deposit return scheme may not be entirely positive for small businesses.

A lack of storage space for returned items represents a very real and pressing problem for some. Likewise, if significant numbers of items are returned at the same time, this could potentially impact on the effective running of the small business, given queues and the time taken to deal with returns.

On the other hand, it could also lead to increased business through higher footfall and the handling fee would represent an extra revenue stream for shopkeepers. Furthermore, as a key source of the sale of many of these items, it is important that newsagents and convenience stores play some part in the successful operation of the scheme.

AAT has suggested one way of reducing the negative impacts on these small businesses – grant an exemption to the DRS if the small store can demonstrate that an alternative collection point is available within a certain short distance of their store, say 400 metres.

Other recommendations include opting for a deposit that is meaningful. In Norway 10p (small bottles) and 25p (large bottles) is paid for returned items and appears to be successful whereas in Germany a flat rate of 25CT per item is paid.

Iceland (the retailer not the country) is currently trialling a 10p deposit return scheme which appears to have been successful but should be noted that their customers are likely to be more price conscious than say Waitrose or Marks & Spencer customers.

In setting a fixed, national rate for deposits it should be sufficiently high to encourage behaviour change in all sectors of society. A 10p-20p deposit does not appear unreasonable and given the commitment to substantially reduce litter and increase recycling rates, AAT has suggested opting for a figure towards the higher end of this range.

Shared ambition

Whether making changes yourself as a consumer or as a business, pressing for political change via traditional methods or the more extreme approach of Extinction Rebellion, we all want the same thing – a reduction in the scourge of plastic so that environmental damage is reduced, money saved, and our children’s future looks a little bit brighter.

AAT will continue to work with law firms, environmental charities and a range of politicians from across the political divide to do our bit, it’s never been more important that you also do yours.

Relationship building for influence and impact

Posted by & filed under AATPowerUp.

Whether you are leading or managing, recruiting or selling, motivating or instructing, you will know the impact of relationships on maximising performance and minimising frustrations.

If you have ever found yourself bemused by the action or decisions of those around you, you’ll know that it’s not always clear what’s going on under the surface. It’s easy to make assumptions and judgements without understanding the full picture.

To continue our AATPowerUp series we’ll be looking at the importance of building relationships to create the best impact on colleagues and clients.

Inter-personal importance

Building relationships with people at work, your peers, your friends and family is an integral part of how we progress in life and work.  Within the accountancy profession, interpersonal skills are becoming increasingly important in an automated world.  In 2018, Robert Half cited Communication, Leadership and Customer Service skills within the top five abilities that recruiters are seeking.

Why should you want to be liked?

Are you an “I’m not here to make friends, I’m here to get the job done” sort of person?  Do you work with someone like that?  It might be time for a fresh perspective.

It is frequently said that “people don’t leave jobs, they leave managers” and the B2B Marketplace Survey showed 61% of accountants had left their job because of their relationship with their manager.  What is the impact on your productivity and progress if only 40% of the team are in good working relationships?

One person’s strength is another person’s irritation

Personality and behaviour profiles are a source of insight into each person’s way of working.  As a DISC behaviour profiling specialist, I use DISC as the foundation to raise awareness and appreciation of the differences that might previously have been causing friction and frustration.

For example, attention to detail can be an asset, especially in finance roles, and it can also become counter-productive when a pedantic drive for perfectionism takes over.

Depending on the profile, one person’s drive for results and getting the job done quickly can come into conflict with a need for accuracy and compliance with guidelines and regulations.

Whilst it may be desirable to have a balance of profiles within a team, bringing their relative strengths and passions, it then becomes important to learn how to manage those differences so that everybody feels valued and works effectively together.

Adapt to influence

If you want to influence somebody the first step is to get your message across clearly.  An effective way to do that is to adapt your communication style to their preference for communicating and processing information.

Across the different personality types, communication preferences differ. 

  • The fast paced, driven individual needs headlines, bullet points and succinct statements.  They will prefer a quick one-line email or text to a verbose conversation.
  • The fun-loving charismatic individual needs you to be friendly and will respond to stories and analogies to keep it interesting.  Pick up the phone for a chat.
  • The steady, loyal individual needs you to take time to listen to their perspective, will want to know how they contribute to the bigger picture and will prefer to collaborate.  Meet them in person.
  • The detail orientated, rule-focused individual needs more information, will ask questions and asks for evidence to back up what’s stated.  They will prefer everything in writing.

Stephen Covey said, “Seek first to understand then to be understood.”  When it comes to building relationships this approach works well because understanding the context, individuals and priorities allows you to adapt your message and communication to the situation.

Adapting how you convey information or make requests to match the preference of the person you’re communicating with strengthens your relationship because your messages are being heard and understood and it feels as though you’re speaking their language.

Restoring damaged relationships

When there has been conflict in a relationship, applying the DISC profile characteristics gives four elements to restoring harmony:

  1. Tackle the problem – don’t avoid it hoping that it will go away.  That allows it to escalate and become a worse issue or spread to other areas.
  2. Seek the win-win – find out what each side wants and negotiate a resolution that suits both.
  3. Listen – give all parties the chance to be heard so that nobody feels left out, dismissed or overlooked.
  4. Objectively review the evidence – gather and analyse the facts of the situation instead of jumping to conclusions.

Three key things to remember

  1. Where there is difference, there is the potential for difficulty.  So instead of labelling a relationship or person “difficult” seek to appreciate their strengths and contribution.
  2. People don’t all think the same way.  Seek another perspective and understand the other point of view.  Just because something is different to your approach of way of thinking doesn’t make it wrong.
  3. Play to your strengths… and be aware of the side effects.  Know your own style and preferences and how that impacts on your relationships so that you can adapt for more influence and impact.

Nikki Wild is an expert in building relationships. This year she will be speaking at the AAT Annual Conference alongside various other experts. This years AAT Annual Conference is packed with inspiring talks, presentations and workshops designed to provide accounting and finance professionals with the skills they need to grow a business or advance their careers.

Join us, top brands and leading financial professionals on 13-14 June in Stratford-upon-Avon, to exchange ideas and learn more about the most pressing issues facing the sector.

Study tips: Sales and purchases – part 2

Posted by & filed under Foundation Certificate, Students.

The second article of our series on sales and purchases.

Study Tips: Sales and purchases series

In part 1 of our sales and purchases series we looked at why sales and purchases are both part of the same process but are split into separate functions – half of a transaction takes place in the customer’s business and the rest in the supplier’s.

We’re now going to look at the basic documentation used in buying and selling and transfer our knowledge about the nature of sales and purchases to paperwork.

What do I mean by that?

Simply that, just as there’s only one transaction when something is bought/sold, there’s only one set of paperwork too, but it’s mixed up between the customer and supplier.

Some of it’s generated in the seller’s business and some in the buyer’s business. Both businesses will check paperwork, but the documents will differ depending on whether you’re the seller or buyer. This is why the one transaction gets separated into the two functions from a practical point of view.

Sales and purchases scenario

Let’s return to the example of Emily selling Adam some stationery and look at who generated which documents:

The table allows us to see the complete process and the paperwork involved. Now we’re going to separate it.

Sales documentation

The sales process involves documentation which is both received from the customer and generated by Emily’s business (she is the supplier).

The fundamental documentation is:

  • Purchase order (received)
  • Delivery note (generated)
  • Invoice (generated)

Purchases documentation

The purchases process involves documentation which is both received from the supplier and generated by Adam’s business (he is Emily’s customer).

The fundamental documentation is:

  • Purchase order (generated)
  • Delivery note (received)
  • Good Received Note (completed)
  • Invoice (received)

In any transaction, the purchase order, delivery note and invoice are used by both the customer and the supplier. What we must understand is which business generates each document and which business checks it. That depends on whether you’re buying or selling and businesses, of course, do both.

The invoices

Invoices are a key document in both sales and purchases. Looking at it from the sales point of view, the business selling goods or services generates the invoice and sends it to the customer. From the purchases side, the customer checks the invoice and pays it.

Here’s the invoice Emily generated and sent to Adam:

As all invoices have to legally include certain information and use standard calculations, then understanding ‘an invoice’ is equally important for both generating sales invoices and checking purchase invoices.

  • Invoice Number – this must be unique.
  • Order No – this is the purchase order number. It is the link between the original order sent by the customer and the invoice generated by the supplier.
  • Invoice Date – used along with the payment terms to work out when the invoice needs to be paid.
  • Tax Point – used for VAT purposes.
  • Customer name and address – invoices usually include the name and address of the customer.
  • Supplier name and address – invoices must show the name and address of the supplier.

The difference between sales and purchase invoices

An easy way to identify the difference between a purchase invoice and a sales invoice is by looking at the names and addresses.

  1. Sales invoice – your business’s name is pre-printed as part of a standard invoice template, which usually includes your logo too. All your sales invoices will look the same.
  2. Purchase invoice – your business’s name will have been added to the invoice. All your purchase invoices will look different as each supplier will have their own templates.

In this case, Emily’s business’s name, address and logo are pre-printed so it’s her sales invoice.

Adam’s business’s name and address have been added, so it’s a purchase invoice from his point of view.

  • Quantity, Description, Code – invoices will include a description of what items, and how many of each item, were bought.
  • Unit price – how much each item costs.
  • Net – the unit/item cost multiplied by the quantity.
    • For example, two packs of ink cartridges were bought: 2 x £20.56 = £41.12
  • Total Net – the sum of all the net amounts added together.
    • In this case: £13.32 + £41.12 = £54.44
  • VAT – Value Added Tax is added to the invoices of businesses that are VAT registered. The standard rate for VAT is currently 20%.
  • Invoice Total – the sum of the total net amount and the VAT added together.
    • In this case: £54.44 + £10.88 = £65.32
    • The invoice total is a VAT inclusive figure because it includes the VAT that the customer must pay.  Because of this, it will always be more than the net amount.  Have a read of How to calculate VAT if this is an area you find tricky.
  • Payment Terms – state the agreed timescale in which the invoice should be paid.
    • The payment terms of this invoice are ‘payment 14 days after the invoice date’.  Therefore the payment is due by 11th May as the invoice is dated 27th April.
  • VAT No – VAT registered businesses must include their registration number.

Sales and purchases paperwork generally looks similar, so all the elements you’d come across have been covered above but you shouldn’t expect to see them on all documents.

In summary

In the next article, part 3 of this series, we’ll consider the differences between cash and credit transactions and the implications for accounting for cash sales and purchases in a double entry bookkeeping system.

Browse the full range of AAT study support resources here

The impact of London Living Wage on financial services

Posted by & filed under Career, Financial accounting and reporting, Run your business.

The Living Wage Foundation wants a ‘real living wage’, not the ‘government’s ‘national living wage’, but a minimum rate based on what people actually need to live.

Their proposed wage is £9 per hour, or 15% greater than the current minimum wage for people over 25, and 22% greater than minimum wage for people under 25.

Campaign for financial services to pay the living wage

And now a campaign by the City of London Corporation backed by the Living Wage Foundation is taking aim at financial and professional services in London’s financial district to ensure upwards of the £10.55 per hour London-weighted Living Wage is paid by more companies.

There are 273,000 jobs in financial and professional services in the City and 9,490 financial and professional services firms. So far, over 100 City businesses have signed up to pay the London Living Wage and be Living Wage accredited employers.

Currently, one in five people employed in the capital still don’t earn a wage they can live on. For one of the world’s wealthiest cities and a global financial hub, this situation seems anachronistic.

Indeed, there appears to be few if any arguments as to why all employed people should not be compensated fairly. The extra cost to business would be the most anticipated complaint, but there is growing evidence to suggest that this doesn’t stand up as a reason not to pay all staff fairly.

Shifting costs to pay the wages

KPMG Workplace Services, a Living Wage accredited employer in London, introduced the Living Wage for third party contractors.

The increased cost of wages and other benefits were offset by reductions in recruitment costs, increased skills and productivity of staff and changed business practices.

KPMG has noted improvements in bottom-line performance of its third-party contracts, in both financial and non-financial indicators, such as employee engagement and customer satisfaction levels.

The improvement in bottom-line performance, is a vital aspect of the Living Wage.

The non-financial gains, such as staff retention and talent attraction, improved workplace culture and values – all USPs for potential candidates, especially among millennial and younger generations.

Research by the Living Wage Foundation shows that 93% of university students want to work for a Living Wage employer.

Impact on financial industry

It might initially seem an issue that won’t impact people working in skilled and generally well-compensated roles such as, accounting, tax or advisory, financial and professional services.

However, firms paying the Living Wage to employees and third-party contracted employees will help to tackle in-work poverty, which affects 1 in 8 workers in the UK, said Karen Higgins, Head of Sustainability at Grant Thornton UK.

“Business has a responsibility to pay employees fairly, which results in increased loyalty and a lower staff turnover. Paying the real living wage is just the right thing to do – it is good for individuals, business and society.”

How the Living Wage has improved business rates and mental health

Indeed, according to Living Wage Foundation research, 86% of companies paying the Living Wage say it has improved the reputation of their business.

75% say it has increased staff motivation and retention rates; 64% say it has helped differentiate themselves among their competitors; and 58% say it improved relations between managers and staff.

Furthermore, the London Living Wage gives workers a greater chance of fulfilling their potential within a single job.

It also reduces stress and pressure, allowing for time to access education and training in their spare time, instead of working multiple jobs or scratching for overtime, and consequently, the ability to achieve upward mobility.

Meaning people can spend more time with their families, it can support people’s mental health, it means people can have more of a life.

As Grant Thornton’s Karen Higgins said: “Paying the real Living Wage is just the right thing to do.”

Study tips: Sales and purchases – part 1

Posted by & filed under Foundation Certificate, Students.

The first article of our series on sales and purchases.

Study Tips: Sales and purchases series

Understanding the processes involved in sales and purchases, and the documentation used, is fundamental to being able to account for those transactions in a double entry bookkeeping system.

We’re going to go right back to the basics of all businesses – buying and selling.

In principle sales and purchases are a single process, but in practice they are dealt with as two separate procedures.

  • Businesses sell goods and services to generate income. Sellers of goods (printer paper for example) call the people they sell to customers.
  • Sellers of services (an accountant for example) call the people or businesses they sell to clients.
  • The businesses that buy those goods and services call the businesses they buy from suppliers. The term supplier is used regardless of whether goods or services are bought.

Sales and purchases scenario

Emily sells Adam some stationery. There’s only one transaction but two businesses are involved so each looks at it from a different point of view: The seller of the goods is the supplier from the buyer’s point of view, and the purchaser of the goods is the customer from the seller’s point of view.

That makes Emily, Adam’s supplier, as he’s purchasing the stationery, and Adam Emily’s customer, as she’s making the sale.

This diagram shows the complete transaction:

We can see that it starts with Adam deciding to buy some stationery from Emily. He sends Emily the order and in return she delivers the stationery to Adam. He then checks what he’s received against the delivery note to ensure everything is correct against his order, and completes his goods received note (GRN). Emily then invoices Adam, who pays her. Adam records that he has spent money and Emily records that she has received money.

There is only one transaction but the actions involved with it are divided, with some of them taking place in the seller’s business and some in the buyer’s business, therefore we need to be able to separate the transaction into the sales function and the purchases function.

The sales process

A basic sales process is:

  • A customer placing an order.
  • The goods being delivered or services provided to the customer.
  • An invoice is sent to the customer.
  • The customer pays the invoice and a record is made to show how much was paid and where the money went, for example into the business bank account.

The purchases process

So what does that look like from a purchases point of view? Again all businesses will follow the same basic process:

  • A business will decide who to buy from. They may have a list of approved suppliers.
  • Then they raise a purchase order and send it to the supplier.
  • The goods or services are received from supplier.
  • Goods will have a delivery note with them, which will be checked against what’s actually been delivered to make sure it’s correct.
  • A goods received note is completed to record that the goods were checked at the time they arrived.
  • If there are any differences between what was ordered and what was received, these are queried with the supplier.
  • When the invoice is received from the supplier, it is checked against the initial purchase order and also the delivery note and/or GRN.

It’s worth noting that the provision of services isn’t usually recorded on a delivery note or GRN. However, businesses will still check that what was provided was the same as what was ordered and invoiced for.

  • The end of the process is when the business pays the invoice and records the expenditure.

In summary

Sales and purchases are part of the same process as there’s only one transaction when goods or services are bought/sold, however, in business they’re dealt with separately.

The sales function involves businesses selling goods and services to customers and clients. It includes raising invoices and generates incomes.

The purchases function is when businesses buy goods and services from suppliers. It involves checking invoices, and other documents, and means that the business has to spend money as it has incurred expenses.

In part 2 of this series, we’ll go on to look at the documentation involved in both buying and selling before tackling the subject of cash and credit transactions. Once we’ve covered all these business basics, we’ll be ready to apply all that knowledge and understanding to accounting for sales and purchases using a double entry bookkeeping system.

Browse the full range of AAT study support resources here

6 questions to ask prospective clients

Posted by & filed under AATPowerUp, Client relations, Communication, Skills.

Thoroughly understanding your client from the very beginning is imperative to building a strong relationship and achieving the best possible results.

True understanding is the result of asking good questions. Going beyond the surface, digging deep into what your client actually wants to achieve and understanding the challenges they face will allow you to provide value. The more questions you ask, the more you will learn.

Here we are looking at the top six questions you should ask prospective clients, in the latest of our #AATPowerUp your business skills series.

The right questions

First of all, says Falcon Huerta, founder of Soaring Falcon Accountancy, “you need to find out what the client knows about their own finances and how they’ve been working. For example how do they prepare their books? What is think the structure of the business and what is their vision for where they can take it next?”.

1. What is the structure of your clients business?

Finding out the structure of your clients business is a good place to start when getting to know a new client and will provide you with useful insight into the running of their business . Do they have any team members for support?

“For example, if the person you’re speaking to is a director, do they have admin people to assist them?” That tends to help when we implement our software, as we can then liaise with those admin people – we like to move things away from the director as much as possible. Asking how they are with technology is useful too. Normally they’re pretty good, or else eager to learn” says Huerta.

2. What problems is your client facing?

In order to provide value to a client and be a part of the solution, firstly you need to understand what problems they are facing. Ultimately clients want help to solve a problem. By making a connection with a client, relaying their problem to them and explaining how you will help to solve it is a much more effective way to build a relationship rather than just saying, here are the numbers. 

Getting these problems or concerns out into the open straight away removes any ambiguity around your role and gives you a head start on how to solve their problems. As well as allowing you to be more specific in the information and reporting you provide.

A way you can do this is by getting your client to list all of their problems and challenges while you’re in the meeting which you can discuss there and then.

3. What does good look like?

A client could answer this question simply by saying “organising my finances”.  But where value is really shown isn’t in providing reams of numbers each month, but instead giving your client tangible steps to take in order to reach their objectives.

By asking the client to articulate their vision of success often makes goals seem a little more real and enables them to drill more fully into their objectives.

A good example was given by Andrew Sullivan, director of Plymouth based practice Numbers (UK) who said “We ask our clients for a set of goals to meet over three to five years. They can be business based or they can be personal. A lot of people say they want to work fewer hours, pay off their mortgage, make more profit or spend more time with the kids. So we set goals with the client and agree how we’re going to help them achieve them”.

4. What is their ultimate goal?

Once you know what good looks like, you can then move on to asking questions about what your clients end goals are.

Imagine your clients end goal is to scale up their business and sell it in 5 years’ time. Without asking the question about they want to achieve, it’s difficult to provide advisory value about how they should be structuring their finances and where they could make savings and when they should be hiring etc.

“One of our clients came to us and said ‘I’ve always wanted to own the local pub’ which was a strange one, but this allowed us to focus on how we were going to make sure that the business had got enough profit  so that, over a number of years, we could accumulate that profit so he could buy the pub” says Sullivan.

5. How can I make your life easier?

To have a good grasp on how to make your clients life easier, you’ll need to understand what has worked well or not so well in the past. Asking this question will allow you to build another layer into your relationship with your client.

For example your client might meet with investors on the second week of every month so by having up to day financial reports ready for the first week of the month this could help with their overall preparation and planning.

6. What is their why?

An important question to ask your client, is why they are doing what they do. What are their goals and what do they want to achieve ultimately with their business?

The why is the purpose, cause or belief that drives every one of us. As Simon Sinek, author of the global best seller ‘Start with Why’ and TED talk contributor notes “whether you are an entrepreneur, an employee, a leader of a team, or are looking to find clarity on your next move, your WHY is the one constant that will guide you toward fulfilment in your work and life.”

Asking this question early on in your relationship with your client will help you gain an insight into the bigger picture of the company therefore allowing you work together more succinctly.

Tips for asking good questions

  • Ask open questions. This will enable your client to talk openly about their business which will put them at ease as this is something they care about.
  • Be aware of your body language when talking to clients. Crossing your legs or arms can be seen as remote or unavailable.
  • Ask what questions. What questions are most likely to move conversations forwards, with this information you can dig deeper into a client’s wants and needs.
  • Don’t take too many notes . Eye contact is important when building a relationship, as is active listening so ensure you’re focused on who you are talking to.

Remember asking a good question means nothing if you aren’t prepared to listen to the answer. Why not check out our post about supercharging your communication skills which included tips on how to improve your active listening skills.

You can follow the latest on Twitter with #AATPowerUp, or check back here for more.