The key to good accounting software for accountants and clients Posted 01/29/2019 by Marianne Curphey & filed under Financial accounting and reporting. Good accounting software has many advantages – it can save time and money, reduce mistakes, provide an holistic overview of a client’s finances, and help you serve your customers better. It also needs to be future-proofed and able to respond to changes in legislation and best practice. Is it built in the cloud? What are the security features? Can it connect to other software products you use? Making software work for you First of all, though, the key to any good accounting software product is simplicity, says Dean Shepherd, Senior Product Manager TAA, Wolters Kluwer UK. “Like any software product, the easier it is to use, the more likely you are to use it,” he says. “It should be flexible, and it should be scalable. You do not want to be changing software every time your business takes a big step forward.” As routine tasks become increasingly automated, accountants can provide real value through collaboration with their clients, says Darren Upson, VP Small business at Soldo. “The best accounting software is designed with the end user in mind,” he says. “It needs to meet statutory reporting requirements, have a simple interface and save the user time by automating the processing of manual tasks. It should also enable the business owner to work collaboratively with their accountant.” Support for a business as it grows As a business grows, so too does the number and complexity of financial transactions that need to be captured and processed. Software should be able to cope with the increased workload. “A growing business does not want to be stifled by an inability to scale key financial tasks,” Dean Shepherd says. “The more automation that can be built in, the more resource you will have to utilise the main purpose of accounting software – as a primary source of information for decision making.” As a business grows, accounting needs will change, sometimes very rapidly, says Darren Upson. “The best accounting products for growing businesses tend to be the ones that can grow with and adapt with the business as it evolves,” he says. “Products that are simple to use when a business starts, and at a low enough price point to be viable, should also have the features, functionality and relevant complexity to support the business as it grows.” Being responsive to clients’ needs With organisations constantly evolving and the proliferation of tech, accountants seem to be faced with a unique combination of challenges when it comes to keeping up with demands, says Valerie Phakeovilay, Software Alliance Manager for PFU EMEA. “Many still have to deal with customers bringing in boxes of paper receipts. This paper-based system can create bottlenecks within the organisation with huge amounts of documents and invoices which need to be processed in a short period of time, which can result in more human error,” she says. “On the other hand, new customers like start-ups might work with fully digitised processes, sending over invoices via photos, emails or messaging apps.” This means it becomes important that accountants are able to juggle between digital and paper, all while managing workloads and meeting deadlines. Darren Upson says a good accounting platform can help you provide a better service to clients. “By automating manual tasks and processes, an accountant can spend more of their time providing advisory services and adding more value to their clients’ business,” he says. Automation can help reduce human error by picking up even the smallest mistakes in text Ensuring data integrity One of the benefits of using a cloud accounting system is that both the adviser and client can access the same live data. “Gone are the days of emailing backup files to and from the client and ensuring you have multiple versions of the same software installed on your machine,” says Dean Shepherd. “I once boasted fourteen different versions of a popular bookkeeping product on my PC, thankfully all now uninstalled and consigned to the history books. Of course, with 24/7 access to live data comes an expectation that you are monitoring that data 100% of the time.” Meeting your clients’ heightened expectations requires careful selection of the right technology to deliver the service your clients are looking for and differentiate you from your competitors, he says. Automation can save time and money It’s obvious why accountants might want to move towards a streamlined management system, says Valerie Phakeovilay. “Automation can help reduce human error by picking up even the smallest mistakes in text, such a misplaced comma,” she says. With software being more reliable than humans, employees have more time to focus on other vital tasks such as onboarding new customers or upselling payroll. “This can also allow businesses to avoid predictable bottlenecks that would normally slow things down, such as tax season, year-end or quarter end.” Secondly, streamlining can help build a collaborative approach with customers, which helps accountants be viewed more as a resource rather than an ‘admin figure’. “This helps customers gain real-time insight into their business, allowing them to make educated decisions on what to invest in or what the available cash flows are,” she says. Johan Harrysson, CEO at Palette Software says human resource is a key cost for most businesses – and ensuring that it remains manageable is vital. “To achieve this when you want to grow your business, it is very important that your internal processes are scalable.” There are already examples of manual account posting processes being replaced by Artificial Intelligence, and the next step could be an AI engine that also makes suggestions for decision making, he says. “All finance departments are under pressure to get more efficient. With the help of a good automation solution, staff can devote more time to analysis and value adding initiatives.” Responding quickly to changes in legislation Accountants should not underestimate the extent to which business owners rely on them for support, and that includes advice about compliance, tax and other legislation. “The ability to navigate through the minefield of legislation that exists today is a key reason why accountants are seen as the most trusted of professional advisers,” says Dean Shepherd. “Business owners like stability and with change, comes risk. Being able to adapt quickly to change is an opportunity to strengthen relationships with clients and choosing a technology provider that can react to change as quickly as you can, is key.” Darren Upson says that if rules change and the accounting software isn’t ready for that change it can create a huge headache for the business and the accountant. “Non-compliance isn’t an option,” he says. Digitally capturing data can also help with compliance and regulation, says Valerie Phakeovilay. “Sharing data collaboratively and securely appeals to customers,” she says. “The process will keep track of all documents, meaning losses or misfilings are eradicated and managers have insight and access to information in case it’s needed.” With more and more companies opting for strictly digital processes, accountancy businesses need to be able to offer this facility. It can also help increase efficiency, visibility and avoid errors, she says.
How Malaysia is preparing students for success with AAT Posted 01/29/2019 by Georgina Fuller & filed under AAT news, Students. Malaysia is planning to almost double its number of accountants by 2020, as part of the accountancy industry’s pledge to contribute to the Economic Transformation Programme (ETP). The goal of the ETP, which was launched in 2010, is to help elevate Malaysia to developed nation status over the next two years and produce 60,000 accountants by 2020. Preparing for a career in finance Mei Yoke Pak, founder of System & Skills Training Concept (SSTC), a finance training provider in Malaysia, says courses, such as AAT, are helping to make a career in finance more accessible and achievable to students. “One of our strategies is to work closely with local institutions for higher learning and training centres starting with main cities such as Kuala Lumper, Selangor, Penang, Ipoh and Johor Bharu to offer AAT qualifications.” Ms Pak says, they’re also in talks with FEMAC, the association of vocational training providers in Malaysia. AAT qualifications in Malaysia provides students with industry relevant accountancy skills across a range of levels, from introductory to professional. “The curriculum prepares students progressively – from introductory level to professional where students acquire very good foundation skills in accounting, up to being able to give objective feedback to companies on financial matters,” says Ms Pak. “It also covers critical areas, such as ethics and the importance of a solid accounting system to prevent fraud.” Other key areas, such as decision making and control, budgeting and cash management are also covered as part of the courses. Students who have gone through AAT qualifications value the practicality and relevance to their work The opportunity for flexibility “AAT offers learners a range of learning models, which include face-to-face learning provided by training providers, on-line learning by Kaplan and even blended-learning (a combination of the two,)” Ms Pak says. “Students also gain access to a comprehensive range of study materials, from webinars to e-learning modules and practice assessments.” Pui San Ng, an AAT student and member of AAT’s international team in Malaysia, says the courses provide work-based accountancy knowledge and practical skills. “AAT’s flexible learning timetable and exam schedule allow me to study and be well-prepared for my exams without interrupting my job,” she notes. “I’m currently working as an account assistant in a small accounting firm. All the knowledge I have learned from AAT course can be easily applied to my work. It’s also helped improve my efficiency and confidence art work.” Ms Ng says one of the most beneficial aspects of the course is the tutor training. “Tutor training is quite important and helpful to me. My tutor often gives explanations and examples that related to the topic in class. This helps me understand the topic better and to apply the knowledge learned from the textbook to the real scenario. Of course, the study materials provided by AAT are also helpful. The practice assessments allow me to be prepared and build up my confidence for the real exam,” she notes. She hopes to become a tax adviser once she has qualified. Getting a job after AAT Ms Pak says getting a job on completion of the course is one of the student’s primary focuses. The fact that the course provides them with practical, transferable accounting skills is a major part of its appeal. “Malaysians are very accustomed to traditional accounting courses, and the idea that AAT is branching out internationally gives them peace of mind that what they study will be accepted by employers,” she notes. “In terms of curriculum coverage, students who have gone through AAT qualifications value the practicality and relevance to their work. It gives them the confidence to deal with issues at work such as dealing with impairment losses, credit control and cash flow.” Feedback so far, from students and their respective employers, has generally been positive. “Even the institutions of higher learning realise the importance of practical accounting skills and work-related skills,” says Ms Pak. “We’re really pleased with the excellent work that is taking place in Malaysia. Building these relationships with training providers will be key to the success of AAT for students. We’re excited to see how the Economic Transformation Programme will continue to grow.” Daniel Westley, AAT’s International Account Manager. AAT provide practical workplace qualifications for finance staff worldwide. Find out more about our international partnerships and AAT’s qualification range.
Introducing corporate social responsibility into the workplace Posted 01/28/2019 by Sophie Cross & filed under Run your business. Corporate social responsibility (CSR) is a way of businesses ensuring that they are acting ethically and doing social, environmental and economic good, beyond what is required by law. It’s becoming a more common expectation by stakeholders that organisations will operate responsibly, and have an integrated CSR strategy that forms part of their business model. Introducing a CSR policy and embedding it in everything you do is a great way to differentiate your business and to attract customers and talent. Businesses not thinking about and acting on CSR are in danger of getting left behind. Where to begin with corporate social responsibility CSR has evolved over the years – in the past, it was seen largely as being about big companies taking part in charity work solely for the purposes of good publicity. Now there is the popular belief that organisations have a duty to the marketplace to act with care, going above and beyond. The best place to start when considering CSR is to work out who your stakeholders are (customers, employees, owners, shareholders, suppliers, the local community, and so on) and then performing some analysis of their primary needs. Consider your location, what’s important to you as a business (beyond making a profit) and your unique selling points (USPs) or what these could be. Examples of corporate social responsibility Whatever the size of your business you can start taking action. There are many ways that you can do this, some of which you are probably already doing: The way you treat your employees Promote healthy living and well being for your staff with better work-life balance options and flexible working conditions. Offer inclusive opportunities and facilities for people with different types of needs. Offer entry-level jobs or training opportunities. Ensure you pay the living wage as a minimum and have no gender pay gap. Train your staff and employees about CSR and ask for their ideas. The way you act in your community Get involved with local community projects. Share some of your facilities at times when you are not making use of them. Volunteer your time or services to local social enterprises or charities and support your employees to do the same. The way you help the environment Act to reduce waste, recycle, and don’t buy or use single-use plastic. Choose suppliers with green credentials (for instance for your office supplies). Use public transport, car share and cycle to meetings where possible. Do a weekly litter pick near your premises. Plant trees and encourage local wildlife. The commercial benefits of CSR Elkington’s Triple Bottom Line model, encourages businesses to measure success against more than just financial factors, but also against social and environmental factors. Believing that business achievements come from more than just profit, but also from the impact on people and the planet. But it’s likely that a focus on CSR will also increase your profit margins and here’s how: Going green could save you money on utility bills and office supplies. Flexible working conditions and strategies that put the focus on people will make a happier team which is proven to make a more productive team. You’ll be having a positive impact on your community which your business will also benefit from. CSR initiatives make great stories for publicity across your marketing channels (for example, press releases, social media, email newsletters) and although this shouldn’t be the sole objective behind your activities, it shouldn’t be overlooked. Implementing your new CSR strategy will lead you to new contacts and to have original messages to talk about which will, in turn, allow you to tap into different markets, attracting new customers and team members. As part of your CSR strategy, decide on ways to monitor and report on each of the CSR factors that make up your policy. Actions speak louder than words As far as CSR goes, customers, employees and other stakeholders will continue to become more demanding. Your strategy for CSR should take a top-down approach and filter across the whole business, not just be a policy written on your website for show. People will not be easily fooled and it is likely to have a detrimental effect if they believe it is just smoke and mirrors. Embrace the changes fully to maximise the benefits and get your whole team involved.
How to stop worrying about your assessment while waiting for your results Posted 01/28/2019 by Mark Rowland & filed under Study tips. Waiting for results -whether it’s for an exam or a medical test -can be a nerve-wracking experience, says meditation teacher and well being expert Emma Mills. “But it’s worth remembering that you can’t do anything about it. Instead, use the six-week waiting period to let life unfold, knowing you’ve done your best:’ she says. Easier said than done, maybe. But if you’re the type of person to worry about exam failure, Mills recommends finding some calm and clarity through these simple, designed for-beginners meditation exercises that anybody can perform during times of post-assessment stress. Exercise one 1. Find a quiet space. Sit comfortably and breathe gently for two minutes. 2. The nervous system relaxes when the out breath is longer. Some experts recommend seven seconds in and 11 seconds out, but do whatever is best for you. Don’t attempt this if you suffer from asthma, heart or breathing problems. 3. Establish a ‘focus point’. It could be your breathing, your heartbeat or the sounds happening around you 4. Every time you feel your attention wavering, bring it back to this focus point. Mills says, “By doing this for a minute or so a day, you build up a muscle. Whenever you find your mind being scattered or worrying, try bringing your attention back to that focus point. It can be difficult at first, but it will relax you.” Exercise two 1. Sit comfortably and close your eyes. 2. Take your attention for a tour around your senses. Focus on what you can hear. What can you feel? What can you smell? This gives you an opportunity to connect with what is happening now. 3. You can also try putting your hand over your chest or stomach to ‘feel’ your breath. Again, breathe slowly, from the diaphragm, ensuring your out breath is longer. Don’t ever force it. Mills says, “This can be used whenever you’re worrying about something. It’ll reconnect you with the ‘now’, hopefully diverting your attention away from whatever is troubling you.” What AAT students say “Exercise. I’m really into climbing. When I’m on top of a mountain, I’ve got no phone signal or distractions. It’s the opposite of sitting at a desk with a calculator. It really helps you forget about what exam results you may or may not be getting.” Jess Brindle. Wesley Sinfield says, “Forget about the results by focusing on the next unit that you’re working towards. The good thing about the assessment is you’re always working on something new.” Emma Mills offers a four-day meditation course for professionals, ‘Presence in Practice‘. Browse the full range of AAT study support resources here
Career profile: Assistant accountant Posted 01/27/2019 by Ebony-Storm Halladay & filed under Career, Career profiles. Assistant accountants get unique access to the businesses they work for. The position on the finance team enables them to view in close detail how the business operates and functions. Now completing her last AAT unit, Charlotte Lander speaks about being the go-to person for her seniors, demystifying the financial jargon and staying afloat at SeaRoc Group, a marine management services firm. What led you to a career as an assistant accountant? At school I was always really good at maths, so when I had a careers advice session in my final year of school the advisor recommended a career in accounting. I really liked the idea of that and I decided to do an A level at college. At university, I originally thought of doing an accounting degree at Chichester University, but when I sat down with one of the tutors they mentioned business studies. It shared a lot of the same modules as the accounts degree, but also offered modules on other areas of business. I’m actually really glad I did it because it has modules in law, marketing and operations management. It really helped me in terms of working in a business. At university, I had been working part time at a supermarket, but it wasn’t what I wanted to do so I applied for a position in Chichester as an admin assistant with SeaRoc Group. Even though I didn’t really have any experience other than my education I was lucky enough to get the job. After just over a year I was promoted to assistant accountant in the team. What does an average workday look like for you? SeaRoc Group has clients in a lot of different sectors, so things can be quite varied. We provide management software to companies like E.ON, Siemens and DONG, the Danish energy firm. The software enables these companies to track offshore vessels and wind turbines, so it’s really quite interesting. The other side of the business is consulting. We have various project managers who are contracted to advise firms on how to manage their marine operations. It’s really great to be part of renewable energy because it’s so important for the future. My job is to keep everything ticking over. Every morning when I get in, I always post the previous day’s bank transaction. But other than that, a typical day could include anything from credit control calls, fee payments, raising sales invoices, journal entries and colleague queries. I get involved with everything that’s going on, one way or another! What are the challenges involved in the role? And what’s most rewarding about it? In my role you tend to have involvement in pretty much everything going on in the department, whether that’s a lot of involvement or a little bit of involvement, you need to be aware of everything. I can be the go to person for my manager, but also for the customers, suppliers and my colleagues. There are times it can feel like you need to know absolutely everything. At the same time, this is probably what makes it so rewarding, because you are such an important part of the team. You get the opportunity to be involved in lots of different projects. It’s a challenge but also a reward all at the same time. What traits do you need to be a good assistant accountant? Definitely organisational skills, and self-motivation. It really is a role where you have to stay on top of your tasks. I write a lot of post-it notes, I put a lot of post-it notes on everything so I know what date I looked at it last, what date I need to look at it again. I have to be on top of everything. Good communication skills are also a must. When a colleague asks me a question, I give them an answer that won’t be complete gibberish to them. I wouldn’t use abbreviations that would make sense to me, but that they wouldn’t understand. If I speak to my manager, I know that I can use those abbreviations. Sometimes I’ll even speak to the CEO, which is quite daunting, you do talk to pretty much all levels or the company. What surprised you about the role? I think students should be aware of how relied upon you can be but also how great that is, that you can be such an important employee. For me, AAT has helped with my job, but my job has actually helped me with AAT too. I could go through all the scenarios in the course and relate that to my job. AAT has given me the core knowledge that I can now take with me into the future. It’s given me confidence that I have a professional qualification – well, I very nearly have it.
How to create an effective social media policy Posted 01/25/2019 by Georgina Fuller & filed under Run your business. Love it or loathe it, social media is here to stay, but the virtual world is still at a relatively embryonic stage and largely unregulated, which can make it something of a minefield for employers to navigate. A passing comment or a fleeting Tweet can all pose serious reputational risks for employees and the companies they work for. So how can employers implement a strong social media policy without encroaching on an employee’s private life, and what are the do’s and don’ts of such a policy? Communicate Social media expert Nikki Hesford, who runs the Business Academy digital marketing consultancy, says one of the most important things is to communicate why you are implementing a policy for social media. “For many employees, the immediate assumption will be that it is to control them, so it’s normally far better received if they understand why you are putting a policy in place and how it will also protect them,” she says. The policy should, ideally, be communicated as part of the new employee induction process, and included in the employee handbook, which has to be signed as part of the induction, Hesford says. Encourage them to look at the ‘bigger picture’ Make sure, Hesford advises, that staff understand how their activity on social media, especially Facebook, reflect on the company. “I have seen lots of cases recently where people have become engaged in heated debates in groups or on pages, often relating to Brexit, immigration or Donald Trump, and have expressed opinions which might be considered offensive,” she notes. “Their comments have then been screenshot and sent to their employer – who is clearly listed on their profile.” Even people who don’t list their employer on their profile can, says Hesford, be easily found through a Linked In search. Having a robust policy in place protects the employer when there is a misconduct issue, says Hesford. “Having it written in black and white, avoids any ambiguity over what is or is not acceptable,” she notes. Be transparent Uzma Rabi, employment consultant at Mackrell Turner Garrett law firm, says: “Be clear about the reasons for the policy: it is to ensure no inappropriate, offensive behaviour will be tolerated on social media. Ensure employees also understand the ‘vicarious liability’ of employers, for employees’ actions outside of working hours.” Explain that the aim is to protect the employer’s brand and reputation. “The policy is also for the protection of employees and their individual reputations as an employee of a particular organisation,” Rabi notes. “One that does not tolerate or condone such behaviour. This is a really important point for employees to understand.” Provide training Appoint an internal or external social media person or someone in the HR team to carry out some form of training which should typically show a number of different scenarios of misuse of social media and the actions an employer should take in such scenarios. ‘The training programme should make employees aware of what is and is not acceptable behaviour and the sanctions an employer has put in place for misuse or abuse, i.e. disciplinary action which may involve suspension or dismissal,” says Rabi. Set boundaries but don’t snoop Employees should never feel as though they are being ‘snooped’ on and a policy should always factor in the Human Rights Act (i.e. the right to respect for private and family life) and Data Protection/GDPR regulations. “A policy should not, in the words of the ACAS guidance, give the employees a feeling of being ‘gagged’ or subjected to surveillance or monitoring when it comes to their IT/computer/smart phone usage,” Rabi advises. Remind employees that a policy can work in their favour An employer has an obligation to protect employees from online abuse and/or cyber bullying, says Rabi. “If an employee is suffering from online abuse it can cause huge problems for employers, including poor morale, poor relationships with colleagues and sickness absence,” she notes. The employee might, ultimately, leave the company if things are not handled sensitively. “These are all issues which an employer should take seriously. And if it’s not handled properly, an aggrieved employee may potentially have a claim against an employer,” Rabi notes.
How to recover from a major mistake at work Posted 01/24/2019 by Charlotte Beugge & filed under Career. We all make mistakes: it is how we deal with them that is important. With the accountancy and bookkeeping professions, errors can have a serious effect on the business. Just a single mistake in a row of figures could, if not detected and altered, potentially affect the accuracy of a company’s bottom line. But part of being human is recognising that everyone makes errors. And a major part of being professional is how you deal with your failures – as well as your successes – at work. Admit it, own it… Time is of the essence if you’ve made an error. Martin Lau FMAAT, works as an accountant in the charitable sector. He advises, “Communication and having a good working relationship with your line manager is essential to working in an accounts team. It is best to tell your line manager as soon as you realise you’ve made a mistake. That way, remedial action can be taken sooner rather than later. If you delay reporting a mistake then what might have been a small error, could develop into a serious problem when trying to rectify six months further down the line. “Remember that the chances are that whatever you’ve done can be rectified easily as it is still fresh in your mind. Six months later it could be a challenge remembering what the error was. In our business, an error which isn’t corrected may eventually be detected by your colleagues or during the annual audit: so there’s no point in hoping that your mistake will not be discovered.” The way you tell your boss or client about your error is important. Admitting it is only the first stage: the second is accepting that it is your error and you want to fix it. You need to ‘own’ the mistake, rather than trying to blame something or someone else. This will make you look professional and responsible. … apologise and move on You need to explain how the error occurred, and what you are going to do to ensure it doesn’t happen in the future. You should offer your line manager or boss a solution to fix your mistake. It’s worth having a plan B prepared too if your line manager doesn’t like your first idea. See it as a good opportunity to show your problem-solving skills. Of course you should apologise for your mistake – but don’t go over the top and don’t keep on about it. Your boss or client doesn’t need tears and repeated apologies. Say sorry once (and if you think others in the workplace might be affected by your error, then don’t forget to say sorry to them too). Don’t dilute your apology with excuses: not ‘I’m sorry but’. Keep it simple and authentic. And you should also forgive yourself while you’re at it: “to err is human”, after all. Crucially, you then need to move on: the error is in the open, it is being corrected and you have learnt from it. End of story. What employers should do If you’re the boss and an employee admits an error, what should you do? It’s all too easy to get angry, but that’s not going to get you anywhere. If it’s a serious matter then you might have to pass the matter on to your HR department. But if it’s a mistake out of character, and the employee has admitted it, apologised and offered a solution, then you too need to move on. Lau adds, “From an employer’s perspective, when a mistake is made by an employee a manager might want to consider why it happened. Was it because the employee hasn’t had sufficient training? Or are they new to the company and don’t completely understand procedures in the workplace? If either of these were factors in why the employee made the original mistake, then the manager might want to consider offering more help and training.” You might also look at whether the employee’s workload is too heavy, and perhaps they could be offered more support. Do try to look at the positive side. If your employee felt comfortable enough to admit their mistake to you early on, then you’ve created a good working environment. Employees are less likely to admit their errors if they have an unapproachable boss, after all.
5 reasons to attend the AAT Annual Conference 2019 Posted 01/24/2019 by Hannah Dolan & filed under Annual Conference, Members. This is a time of transition, and accountants must be prepared to adapt and make the most of new opportunities. The political environment looks to be uncertain for months. As an expert in your field, it’s important for you to navigate through major changes and identify trends and tools that can support your organisation. With a great deal of change ahead, it’s more important than ever to learn from each other so that you can continue to best support your clients. This year at the AAT annual conference on the 13-14 June, there will be a mixture of talks, workshops and presentations from leading financial professionals discussing the most pressing issues facing the sector. Here are five key reasons why you should attend the AAT annual conference this year… 1. Dedicated technology workshops Technology has brought many advantages to the accounting and finance sector including intelligent forecasting, automation and digital records and will continue to do so for the foreseeable future. Understanding new technology is fundamental for business growth, and for your own professional development. Which is why a key focus at this year’s conference is digital transformation, with a number of workshops dedicated to bringing you up to speed on all the latest tech. Get to grips with AI and robotics as well as the latest updates on Making Tax Digital. 2.Learn how to data visualise Advisory is becoming a bigger and bigger part of day-to-day accountancy work, due to the digital revolution. As a great deal of compliance work is becoming automated, the focus has shifted to, “what do these number actually mean?” and how will they affect the running of the business? The ability to explain complex concepts derived from data to both clients and the wider organisation is becoming more and more important. At this year’s conference, there will be discussions on the importance of data visualisation and how to communicate information clearly and efficiently. 3. Develop soft skills With employers placing more emphasis on soft skills such as communication and creative thinking, it’s now not enough to ‘just be able to do the numbers’. Networking is an ideal place to start when building up those highly sought after soft skills. The annual conference offers the ability for members to share insight, gain practical advice and gain a different perspective on common problems from others in the sector. There will also be specialist talks around to how to communicate well with others and build influence within your organisation. 4. Broaden your industry knowledge The typical accounting role is expanding. Today’s accounting professionals need sound decision-making, negotiation and strategic-thinking skills as well as the ability to crunch the numbers. It’s also important for accountants to be able to see the big picture and understand how their role impacts the wider business. Organisations often seek to recruit accountants who are adaptable with their approach, who have experience working in different environments and who are confident with change and challenges. At this year’s conference, there will be a focus on pertinent issues from the industry, from digitalisation to advancing your career to the next stage. 5. Learn how to utilise social media for your business The growth of social media’s influence and popularity over the years has been astronomical. Almost everyone keeps an active online presence because they want to be given fresh information and real-time updates. From a business perspective, social media is an inexpensive way to promote your services and to keep new and existing customers chatting about your business. Learn how to put your services online and stay in touch with your clients, utilising key the advice from industry experts. You can view the full list of speakers here. More details around the AAT Annual Conference 2019 programme will be available in the coming months, but early bird tickets are available here (until Monday 18 Feb).
FRS 102: examining Section 16 and Section 17 Posted 01/23/2019 by Steve Collings & filed under Financial accounting and reporting. FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland deals with the issue of property, plant and equipment in Section 17 Property, Plant and Equipment. FRS 102, Section 17 allows an entity to measure items of property, plant and equipment under the cost model (cost less depreciation less impairment) or under the revaluation model. There is a separate section of FRS 102 which deals exclusively with investment property – that of Section 16 Investment Property. This article will examine the provisions of both Section 16 and Section 17. Investment property Investment property is property that is held to earn rentals or for capital appreciation or both (it is not owner-occupied property). Investment property can be land, or buildings (or part of a building) or both. FRS 102 (March 2018), Section 16, does not contain any undue cost or effort exemptions. This means that all property which meets the definition of investment property per the Glossary to FRS 102 must be remeasured to fair value at each reporting date. There is an accounting policy choice which applies to investment property rented out to another group member which is examined in the next section of the article. FRS 102 (March 2018) is mandatory for accounting periods commencing on or after 1 January 2019. Early adoption is permissible. There are only two amendments arising from the triennial review which can be early adopted separately without having to early adopt FRS 102 (March 2018) which relates to directors’ loans (FRS 102 (March 2018), paragraph 11.13A) and the tax effects of gift aid payments (FRS 102 (March 2018), paragraph 29.14A). Under FRS 102, investment properties are accounted for using the fair value accounting rules in the Companies Act 2006, meaning that fair value gains and losses are taken directly to the profit and loss account. Fair value gains and losses must not be taken to a revaluation reserve as the Alternative Accounting Rules in the Companies Act 2006 are not being applied where investment properties are concerned. AAT Licensed Accountants and members working for companies dealing with such properties must understand the different accounting treatments under FRS 102 for fair value gains and losses for such properties. The example below shows how the double-entry works. In addition, deferred tax must also be brought into account to comply with the requirements of paragraph 29.16 of FRS 102. Deferred tax which relates to investment property measured at fair value is calculated using the tax rates and allowances that apply to the sale of the asset. In practice, if the entity is not planning on disposing the investment property for the foreseeable future, we would currently use a rate of 17% (being the corporation tax rate which will apply on 1 April 2020). A common error where this calculation is concerned is to use the rate of tax which is in force at the balance sheet date. As fair value adjustments for investment property go to the profit and loss account, the associated deferred tax consequences are also presented in the profit and loss account (ie within the tax expense). Investment property in a group As noted in the introductory paragraph of this section, the FRC have introduced an accounting policy choice which can be found in FRS 102 (March 2018), paragraph 16.4A, which only applies to investment property rented to a group member whereby the entity can apply a choice of accounting as follows: at fair value through profit and loss; or at cost. This accounting policy choice only applies to groups (it does not apply to standalone entities with investment property, nor does it apply simply because the company is small). The accounting policy choice is in place of the undue cost or effort exemption which was removed from Section 16 by the FRC and effectively restores the position for groups in previous UK GAAP. It is likely that properties rented to other group members will be accounted for at cost and where this is the case, the group applies the cost model in Section 17 Property, Plant and Equipment to measure the investment property at cost less depreciation and impairment losses. If a group wishes to take advantage of this accounting policy choice and measure investment property rented to another group member at cost, then they will need to freeze the valuation of the investment property at the date of transition to FRS 102 (March 2018), which will be 1 January 2017 for a 31 December 2018 year-end; restate the comparative year and then account for the property under the cost model. This is because essentially the company owning the investment property has changed the accounting policy for measuring its intra-group investment property and changes in accounting policy are accounted for retrospectively. It should be noted that if the group wishes to early adopt the accounting policy choice in FRS 102 (March 2018), paragraph 16.4A, then it must apply the whole of FRS 102 (March 2018) at the same time. The accounting policy choice is not available for early adoption on its own. Property, plant and equipment As noted in the introductory section of the article, property, plant and equipment (PPE) is accounted for under Section 17 of FRS 102 Property, Plant and Equipment. Section 17 allows PPE to be measured under the cost model or the revaluation model. Application of the revaluation model is an accounting policy choice and where the entity chooses to measure assets at revaluation, all assets within that asset class must be revalued. For example, if an entity owns four properties, it must revalue all four properties – it cannot just revalue those properties which the entity knows have appreciated (increased) in value, which is why the ‘all or nothing’ rule was introduced. The revaluation model in Section 17 applies the Alternative Accounting Rules in the Companies Act 2006. Therefore, revaluation gains are taken to the revaluation reserve (in the same way as they were in previous UK GAAP). Revaluation losses are also taken to the revaluation reserve to the extent of a revaluation surplus in respect of the same asset; any excess loss is then taken to profit and loss. If the asset subsequently increases in value, the increase is recognised in profit or loss to the extent of the previously recognised loss, with the balance being recognised in the revaluation reserve. When a company decides to use the revaluation model, it restates the asset(s) to fair value at the date of the revaluation. Further revaluation exercises must be carried out with ‘sufficient regularity’ to ensure the asset(s) carrying amount in the financial statements does not differ materially from its fair value at the balance sheet date. FRS 102 does not prescribe set timescales for revaluation exercises to be undertaken; hence, this will be left to management’s professional judgement. Deferred tax consequences will also apply to an item of PPE subject to the revaluation model under the timing difference approach in Section 29 Income Tax of FRS 102. Where a revaluation gain occurs, this will create a deferred tax liability which is recognised in the revaluation reserve and reported through other comprehensive income. Keep in mind that the concept of the revaluation reserve still applies to PPE measured at revaluation under Section 17 – it has only been removed for investment property measured at fair value under Section 16. Conclusion The important points to highlight to AAT Licensed Accountants are the different accounting treatments for investment property and property, plant and equipment under FRS 102. Investment property measured at fair value applies the fair value accounting rules in the Companies Act 2006 and hence are taken directly to the profit and loss account (not a revaluation reserve), as too are the deferred tax consequences – net gains are not distributable to the shareholders. Property, plant and equipment measured at revaluation applies the alternative accounting rules in the Companies Act 2006 and hence are taken to the revaluation reserve together with the deferred tax consequences.
Excel tips: how to use the VLOOKUP function Posted 01/22/2019 by Gill Myers & filed under Excel tips, Students, Study tips. Working with spreadsheets can make accounting tasks much more efficient and reliable once we have learnt to use the required functionality. However, in order to achieve that, we have to combine accounting knowledge with spreadsheet skills and for many of us, bring both areas together is a real challenge. In this article we’re going to work through how to use Excel’s VLOOKUP function. When large amounts of information are kept in a spreadsheet a variety of accounting tasks can be performed. These may use different ranges of data, but as they are from the same source there is no need to duplicate the raw data. Managing a large spreadsheet, so that we can find and use the information we need, can be challenging though and is best done if we can use functions such as LOOKUP to help us. What is a LOOKUP function? There are three LOOKUP functions in Excel, all of which look for a match with a value you supply: LOOKUP – looks in a single row or column Rarely used now as it has been superseded by the vertical and horizontal options that produce the same result more easily. VLOOKUP – looks in multiple columns As spreadsheets are more commonly organised by columns, VLOOKUP is used the most frequently out of the three functions. HLOOKUP – looks in multiple rows Works in the same way as the VLOOKUP but looks in rows instead of columns. The thought process and elements involved in writing both are similar but applied to data ranges running horizontally instead of vertically. Using a LOOKUP for management accounting Let’s think about how a VLOOKUP could be utilised in the context of management accounting. Download an extract of the spreadsheet if you would like to have a go as you read through the article. Please note that some rows have been hidden in the images below. GM Retail has a master spreadsheet that contains information about its inventory. The purchasing department has been asked to re-order a number of products and the manager of the warehouse has supplied the relevant product codes including 1675 and 4015. The VLOOKUP function can be used to identify information about each product. The VLOOKUP needed in cell B2 in order for the supplier of product code 1675 to be shown is: The VLOOKUP can be decoded as a combination of the annotation above and the following transcription: Look in B1 and compare the data in it to all the data in the range A6 to H135, find a match in the leftmost column and then show the data contained in the cell in the 7th column on the same row. The match must be exact. The brackets, commas and colon are all essential for the function to work and if they are omitted or used incorrectly then the formula is unlikely to be accepted or an error message will be returned. Excel will automatically add the correct basic ‘grammar’ though, if the function arguments tool is used. Click into the cell you want the VLOKKUP in and then click on ‘fx’ just to the left of the formula bar. Then search for and/or select the VLOOKUP function: The argument box for the VLOOKUP function has four boxes which splits the formula up into its four elements: Lookup_value Enter the reference of the cell that contains the information you are supplying Table_array Enter the range of columns and rows that you want checked for a match with the cell in box 1 Col_index_num Enter the number of the column that will contain the information you require, for example, column C will be number 3 Range_lookup Enter False if an exact match is required or True if a non-exact match can be allowed Note: The VLOOKUP, with the required basic ‘grammar’, is produced in the formula bar as the information is entered into the argument box. Using the function argument tool gives a structure to writing the formula for a VLOOKUP and is really helpful if, like me, you struggle to write formulas from scratch. However, there are a couple of issues to note about the VLOOKUP function because without be mindful of them, the formula won’t work correctly, even if we have used the function arguments tool to help write it. Firstly, VLOOKUP looks in the leftmost column and return information to the right only. Given the structure of the data in our inventory master sheet and the table array selected (all the columns and rows containing information) we can look up anything from a product code because A is the leftmost column and everything else is to its right: However, if we wanted to look up information based on the re-order level, a VLOOKUP would only be able to return the supplier or re-order time, and the table array would have to be selected to start from column F: Knowing which way the VLOOKUP looks, means that we are in a position to either alter the position of data in a spreadsheet in order to have the right information in the leftmost column or we can select the table array appropriately. Secondly, VLOOKUP will default to matching approximately unless told otherwise. The final element of the formula instructs Excel to either allow a non-exact (TRUE) match or requires an exact (FALSE) match. Unless you state that a FALSE (exact) match is required, Excel will return an approximate match if it cannot find an exact match. If this last section of the formula is omitted, it will still work as if the word ‘TRUE’ had been included. If we want to know the cost of a product we need an exact match: However, if we apply a mark-up percentage based on the first digit of the product code we would need to allow a non-exact match: Notice that the table array has had to be changed to make J the leftmost column. Lastly, we need to be aware that if a non-exact (TRUE) match is used, either specified or by default, then the information in the spreadsheet most be sorted by the leftmost column either alphabetically or numerically in ascending order. If the raw data isn’t sorted in this way then the VLOOKUP is likely to return an incorrect value. See if you can use the VLOOKUP function to find out the supplier, unit cost and correct mark-up percentage for product code 4015, then click on this link to check your answers. Look out for other articles in this Excel ‘How to….’ series. Read more tips on Excel here Browse the full range of AAT study support resources here