Should accountants do more to support SMEs as business advisors? Posted 09/05/2018 by Jessica Bown & filed under Run your business, Students. Making a success of a small to medium-sized business (SME) is far from easy. A good accountant can be a huge help – especially if he or she is prepared to go beyond the realm of traditional accountancy and offer business advice as well. Colleen Wong, who runs successful start-up TechSixtyFour from her home in Teddington, Middlesex, says her life has become much easier since she switched to an accountant offering more comprehensive advisory services. “Six months ago, I found an amazing accountant who supports small businesses such as mine,” she said. “The company has advised me on everything from VAT to tax-free childcare. “Its a huge improvement on my old accountant, who was not equipped to support SMEs and caused me more stress than anything else.” Little wonder then that many accountants are expanding their services to better cater for the needs of SMEs. Michael Beech, FMAAT, director at Michael Beech Accountancy, said: “Smaller business owners often wear a lot of hats. “Unlike larger organisations, they do not have finance directors with specialist accounting knowledge, and often need guidance on everything from how to set up bookkeeping systems to tax planning.” Here, we investigate how an accountant’s role is evolving – and ask whether accountants can or should take on the role of business advisors to their SME clients. A changing world Technological advances mean accountants now have more financial information at their fingertips than ever before – allowing them to help clients in lots of new ways. “Our sector is experiencing a fundamental shift, largely driven by technology,” said Daren Moore (FCCA), group commercial director at TaxAssist Accountants. “While this is a challenge, it also presents a huge opportunity for us and our clients.” However, new technology such as bookkeeping software packages is also allowing more small businesses to get by without an accountant, which is why firms need to take advantage of the information available to ensure they offer real value for money. “Failure to embrace the technological changes currently dominating our sector is probably the biggest danger to our industry today,” Moore added. “Accountants need to recognise that client relationships and expectations are changing, and that this is likely to continue. “We can’t afford to assume that what has always worked will continue to do so.” A wider role There is no doubt that the role of a business advisor is wider than that of a traditional accountant. “Business advisors should have knowledge of many elements of business, from personnel to marketing and strategic development,” Beech said. “Accountants, on the other hand, have tended to focus more on the reporting element; the year-end accounts and tax planning side.” Business advisors also have to be more proactive. “In my experience, the main difference between a good accountant and a good advisor is mindset,” Moore said. “An accountant will base their client relationships around compliance-based elements, which are largely reactionary. “Business advisors, on the other hand, help their clients understand and comply with rules and regulations, but also use their knowledge and experience to plan for the future.” However, there are lots of ways in which the two roles overlap, making the switch easy for accountants with lots of relevant experience. “Accountants can help SMEs as business advisors because they are privy to a lot of ‘business lessons’ learned via dealings with their clients,” Beech added. “By monitoring their clients, for example, they can gauge which business models work and which don’t. “There are so many lessons to be learned by talking to business owners who are out there on the front line doing business in the local economy.” The future of accountancy? If you deal with SMEs, it is likely you will have to start offering a wider range of services to appeal to clients such as Ms Wong. But that does not automatically mean having to study for a range of new qualifications. Moore said: “These changes are not necessarily going to be driven by professional qualifications, but by broader commercial knowledge and advisory skills that allow us to relate to our clients in different ways.” You do not even need to describe yourself as a business advisor. “Accountants often give SMEs business advice without calling themselves business advisors,” Beech said. “Some do it during client reviews; it’s a means of offering better customer service that I have used myself.” Just remember, however, that it is vital to stick to what you know! “The future of the UK economy depends on helping SMEs. And I believe accountants can play a big part in that,” Beech said. “But if we are uncertain about something within an advisory session, we always go away and research the area. “It’s better to do that than to give misleading advice.”
The ultimate crash course in Excel – part 3 Posted 09/03/2018 by Filtered & filed under Excel tips. Please enable cookies in your browser to watch the videos. Note: we are currently experiencing difficulties with the videos in this article, but are working to resolve it ASAP. Thanks for your patience. Excel tips: Ultimate crash course series Part 1 – Copy, cut & paste in Excel Part 2 – Conditional formatting in Excel Part 3 – Pivot Tables in Excel Part 4 – Mathematical Formulas in Excel Part 5 – Excel formatting guide for a great looking spreadsheet Part 6 – Essential Excel formulas like vlookup Part 7 – Filtering your data in Excel A pivot table is one of the quickest and most effective ways to drill down into large sets of data in Excel. Once you have mastered the basics of the PivotTable in Excel you’ll find a world of data analysis opened up to you. This lesson takes 15-20 minutes, but the knowledge you’ll gain could save you hours every week. (Worth noting: PivotTable™ is the trademarked term for Microsoft Excel’s pivot table function. We use both terms in this article.) The best way to understand what PivotTables are all about is to create one and experiment with it. The following example creates a PivotTable showing the total sales values of the top 10 best-selling products in an Excel table containing just over 2,000 invoices. Below is the original table of sales invoices. The screen is split to show the total rows of data. The highlighted Table Name box in the top left-hand corner shows the table is named ‘SalesInvoices’: It’s possible to create a PivotTable based upon any range of cells, but the advantage of using a table is that the PivotTable will adjust automatically to include any new rows and columns of data added to the range. The above table contains seven columns: OrderID OrderDate CompanyName Country Salesperson ProductName ExtendedPrice ExtendedPrice represents the total sales value of each invoice line – the number of items sold multiplied by the price of each item. A single invoice can have several lines, one for each different product ordered, so you will see the same OrderID for several lines. Just glancing at 2,156 lines won’t easily tell you which products are selling best, which is where a PivotTable comes in. Let’s take a look at how we create and build a Pivot Table using our raw data fields. Filtering by top 10 Now right-click any ProductName and from Filter, choose Top10: From the Top 10 Filter dialog box you can choose whether to display items from the top of the list or the bottom; how many items to display—and whether that figure should just be a number, a percentage of the total, or the number of items that add up to a minimum value—and which field to base the top or bottom calculation on: In this case, you can just leave all the default values set to show the top 10 products by invoice total, so click OK. The Top 10 list displays: The list would be clearer if sorted in descending order of values to give a kind of league table. To do this, again right-click any ProductName, then from Sort, choose More Sort Options. In the Sort dialog box, choose descending order, and then click the dropdown arrow to choose Sum of ExtendedPrice before clicking OK: The Top 10 sellers are now sorted in descending order by value: Drill down If you want to look at the detailed records that add up to any of the totals shown in the PivotTable, double-click the total and Excel will insert a new sheet listing all the records that sub-total to the value in the PivotTable. To finish off, right-click any of the numbers and choose Number Format to select a more appropriate format. In this case, you could format the numbers to show a currency: Recommended PivotTables We’ve just seen how quickly we can set up a PivotTable from our source data, but there is an even quicker way using Recommended PivotTables. We can click in any cell in our source data and, from the Insert ribbon tab, Tables group, choose Recommended PivotTables. Excel presents a selection of PivotTables based on your set of data – you can choose the most suitable with a couple of clicks: In the following video, we are going to explore the four areas of the Pivot Table; Filters, Columns, Rows and Values. The four different areas of a PivotTable We’re just scratching the surface of what’s possible with a pivot table. Next, why not bring your data to life using a PivotChart, Slicer, or Timeline? In the next article, part 4 in the series, we’ll dive into using mathematical formulas in Excel, like SUM, absolute references, powers and more. AAT students and professional members can access a wide range of Excel resources and training.
Setting your business up for financial analytics Posted 08/31/2018 by Mark Rowland & filed under Financial accounting and reporting. Financial analytics is becoming a bigger and bigger part of day-to-day accountancy work, both in industry and in practice. Practices are starting to use analytics (also known as ‘business intelligence’) to paint a detailed and accessible picture of company performance for their clients, while internal finance teams are using it to create team-specific reports to help them identify new opportunities and work more efficiently. Sam Ellis is an accountant and recognised analytics expert. He is also Head of Operations and Finance at business intelligence agency InterWorks Europe. He says: “Analytics is about accessing and combining the right data and asking the right questions. Then you can produce something of value.” While you can do this using Excel, there are more and more programs available, such as Tableau and PowerBI, that allow you to do more with a few clicks. Below are some tips to get started. Sam Ellis will also be hosting an in-depth seminar at AAT on September 13. Identify current issues “There are a few different ways to start on your technology adventure and because there are so many technologies out there it’s good to bring focus to your explorations,” says Ellis. “One place to start is to consider the problems you currently wish to solve. For example, your software doesn’t give you great looking reports, or it takes too long to put something meaningful together.” Identifying problems is a good place to start because it’s inherently something you’ll be driven to solve. It’s not hypothetical; it’s real. You’re invested in finding the solution from the beginning. Research and collaborate If you are passionate about changing something for the better, Ellis advises that you should collaborate in a small working group or do some solo research. “A nice research trick is to try Google images search, especially with a subject like data visualisation. You’ll see a tonne of beautiful visualisations and you can follow the source URLs to the original posts.” Try to absorb as much as possible and focus on one or two technologies that will provide what you need and advance you forward. Take stock of the technologies your business has already put in place and accessible data sources. Speak to stakeholders Bear in mind that there are numerous stakeholders receiving and benefiting from the outputs of your work. The prospect of a hard stop in favour of new technology can be disruptive (in a bad way). “Lightly canvass colleagues, managers, directors and partners to work out who will be the advocates, who will be interested in your research and who will object,” Ellis says. “Advocates will have your back; they’ll support your research and will help keep you going. A group of people giving voice to future technologies is going to have an impact on your success.” Feedback will help shape the offering to be appealing to others. It will be less of a shock to your business if stakeholders are aware of what you’re doing from the outset and have a chance to get on board. Remember, even objections are helpful. Resolving them will lead to a more thorough solution and no one is excluded. AAT Data Seminar Sam Ellis will be hosting a seminar overview of big data, data analytics, business intelligence and why this is relevant to finance teams and accountants. Breakfast seminar – data anlaytics, 13 September. For more on getting started with analytics and producing great reports, AAT members can read the Sept/Oct edition of AT magazine, mailing out on 11 September.
Bookkeeping: what are the implications of zero hour contracts? Posted 08/30/2018 by Mark Blayney Stuart & filed under Run your business. The latest ONS figures suggest there are now 901,000 people on zero hours contracts, a huge increase from 190,000 just seven years ago. The seemingly unstoppable rise of the “gig economy” is having considerable impacts on employers and the trend looks set to continue. So what are the impacts for bookkeepers of zero hours contracts (ZHCs)? What do employers need to bear in mind – and what do the employees themselves need to think about? ZHCs can work well for both employer and employee because they offer flexibility to the worker (they don’t have to work hours they don’t want to), and cost savings for the employer (they don’t have to pay if the demand is not there). However, the benefits for the employer mostly stop there. ZHCs are not, as they are often widely misconceived, a way for employers to skirt the obligations they have to their employees, like holiday pay, sick pay and access to pension schemes. Worker, employee or self-employed? The key for the bookkeeper is to know the difference in law between the three kinds of worker – Worker, Employee, and Self-employed – and be aware of the different rules that apply to each category. Then, you can work out entitlements and how ZHC workers will appear on the payroll. “Zero hours doesn’t haven’t a specific meaning in law,” says Steve Griffiths, Managing Partner of DWA Accountants. “So employers need to ensure that written contracts set out employment status, rights and obligations of their zero hours staff.” There are some additional advantages for the employer; “gig economy workers are seen as self-employed and therefore entitled to the lower National Insurance rates, thus becoming a more favourable option than employment with the lower rates,” says Griffiths, and also for the employee; “it allows you the flexibility of being able to turn down work, which may be suited better to students or parents of young children; and you don’t have to do work even when asked if you don’t want to.” There are some knock-on benefits too. “Accepting a zero hour contract can allow you the opportunity to make yourself known and available to the company should a more permanent role become available.” However, bookkeepers need to be on top of the fact that “zero hour workers are entitled to Statutory Annual Leave and the National Minimum Wage in the same way as regular workers; they are also entitled to the National Living Wage or the National Minimum Wage,” Griffiths says. The scenario is different if the company is using a self-employed person for additional work on a zero hours contract. Use it when it’s right for you, but with caution “These contracts are useful for casual staff or short seasonal work,” says Nicky Larkin, Founder of Goringe Accountants. “However, if the role is essentially a regular full-time or part-time job then an appropriate contract should be given to an employee.” Steve Griffiths adds, “employers with more seasonal demand can make use of this contract type, and when an employer needs to cover sickness it can also be of use. As there’s no obligation on the employer’s part to provide work, employers can take on individuals on zero hour contracts as and when they need them.” Whether this benefits the employee very much depends on their individual circumstances. Whereas some will enjoy the freedom ZHCs offer, “you don’t have guaranteed hours, the hours can be unpredictable which can impact on your social life, and/or it can leave you feeling demoralised in your work.” The biggest impact is likely to be financial. By their very nature, zero hours mean that “your weekly/monthly wage is not guaranteed.” Zero hours doesn’t haven’t a specific meaning in law A continuing trend What are the wider implications of the gig economy? “Employees are less likely to feel motivated whilst they are employed on a ZHC compared to those employees on a full/part time contact,” says Griffiths. “As they may see fewer opportunities to progress within the firm, the employee may feel less invested in the company’s future.” This, Griffiths believes, “will ultimately impact upon morale and productivity of the work force.” The prevalence of the gig economy is likely to increase as workers see the advantages of flexibility – being able to work when they want to, being able to take on more varied and interesting work, creating more of a work-life balance, and juggling family commitments. But the longer-term implications (particularly pension arrangements) are something that as a society, we are still coming to terms with. And are employees ‘choosing’ zero-hours contracts if there are so many of them that they have to take ZHCs in order to get the job they want? Employees need to know that by agreeing to zero-term contracts they may be eroding some of their security and benefits in the long run – and employers need to know that zero hours contracts are not a way to save money wholesale or avoid their commitments to employees’ rights and benefits. “As an employer, don’t just think short term,” says Larkin. “You want loyalty from your staff.” Changing perceptions Is the bad press that ZHCs have received in the past being resolved? To an extent, yes. The image problem generally lies in the way that some very large companies have imposed ZHCs on their employees, and in some cases, where guidelines haven’t been followed. But is this enough? “The government could consider introducing a limit on zero hours contracts,” Larkin suggests. “For example if someone has been an employee for more than 6 months with an average of 16 hours per week, a minimum hour contract should be introduced.” The rights of those on zero-hours contracts were strengthened to an extent in 2015 (in the Small Business, Enterprise and Employment Act) when exclusivity clauses were made illegal – meaning that if a company wants to prevent the worker taking work elsewhere, they will need to be employed. As HR consultant Claire Healy points out, however, that there are exceptions to this: “workers earning £20 per hour and above are exempt from the ban on exclusivity clauses.” The government does offer advice on the circumstances where zero hours contracts are appropriate, suggests best practice and offers alternatives. Those circumstances are most likely to be: New businesses, where demand can fluctuate and be unpredictable Seasonal work, such as Christmas or in agriculture Needing cover for unexpected sickness in critical roles Spikes in demand, such as special events in catering Testing a new service that may or may not be rolled out long-term.
5 ways FE can work smarter with its money Posted 08/29/2018 by Mark Rowland & filed under Financial accounting and reporting. The lack of funding available to UK education system has put immense pressure on teachers, finance staff, and most importantly, the students. In the July/August 18 edition of AT magazine, we explored the “crisis in the classroom” looking at the serious funding problem facing schools across the UK. School business leader Rachel Younger recalls when their budgets were first under extreme pressure. “I was sat in my office late one evening trying to draft the budget and just burst into tears. The amount of money we needed (but didn’t have) was just completely unachievable.” Valentine Mulhoulland, Head of Policy at National Association of Head teachers (NAHT) says: “80% of our members say they have no idea how they will make their budgets balance by 2020.” She warns that as more schools convert to academies, the auditing and financial reporting requirements will become more difficult. “For accountants, they are going to be auditing academies that are increasingly looking like they are not sustainable.” If schools are struggling, further education is suffering more – with FE colleges having to fight for every penny. So how can FE colleges stay afloat? We asked Louise Jones, an accountant and deputy principal of Birmingham Metropolitan College. 1. FE colleges must recognise staff – however they can Whichever college you speak to, you’ll find that between 65% and 70% of costs are spent on staff. We’re asking our staff to perform even better, but it’s difficult to recognise that through financial remuneration. As a college, we got to the position this year where we felt that we just couldn’t ask our staff to do more without giving them some kind of pay rise. So we found the money to give them one. We ask a lot of our teaching staff without being able to recognise that to the extent that we’d like financially, which is common across the public sector. So we have to recognise them in other ways. We have a recognition scheme every Friday – we call it Friday Fanfare. Our culture is built around praise. We would do this anyway, but it matters all the more when your financial options are limited. 2. Digital tools will offer support We have to make sure that every penny we spend that isn’t on teaching staff is spent wisely. We’re constantly looking at being more efficient, doing things better. There’s been quite a lot of work done on this in terms of digital learning. Students are able to access education without necessarily having to have a teacher in front of them. What we’re working on, and I know other colleges are, is a blended model where some of it is online and some of it is in the classroom. Trying to deliver across multiple sites through a broadcast lecture, for example. Which you can do, but the key question then is how you allow students to interact with the lecture. 3. Colleges must share ideas We compare our cost models to other colleges to see, if another college is being particularly efficient, how we can learn lessons from them. It’s certainly something that you can never sit back and say: “I’ve done all that I need to.” It’s constantly scraping the bottom of the barrel to see what else we can do more efficiently. 4. They must invest in apprenticeships While nationally, we’ve seen a drop in apprenticeships, we as a college have increased our number of apprentices. We did a lot of work with employers prior to the introduction of the apprenticeship levy, and I think that has certainly helped us. Apprenticeship is certainly something that we strongly recommend to our students, because it gets them into the skills market much quicker; you can now get degree level qualifications through the apprenticeship route. We are trying to change the perception that as an 18-year-old, the only route is HE. 5. FE needs a big strategy We need to make sure that funding bodies and combined authorities, where the budgets will be devolved to within the next 12 months, are spending money in a way that reflects what we as a country need in terms of an industrial strategy. Big strategic thinking that needs to go on to make sure we’re giving funds to those organisations that can demonstrate that students have a much better opportunity when they leave a college or an education establishment; that they’ve got the opportunity to then earn money and contribute to the economy. AAT members can read the full article in our forth coming Sep/Oct issue of AT.
VAT too valuable to disappear under no-deal Brexit Posted 08/24/2018 by Brian Palmer & filed under Brexit, Members, News. AAT tax advisor Brian Palmer responds to HMRC’s statement on VAT under a no-deal Brexit. The Government has made it clear to all and sundry that a ‘no-deal’ Brexit is in the best interests of no-one – and in their words, ‘remains unlikely’. However, that hasn’t stopped the Department for Exiting the European Union feeling compelled this week to issue a stream of guidances, totalling 25 in all, as to what might happen in the, apparently unlikely, event that no workable deal is secured. One of these papers covers VAT for businesses and has been prepared by the office of HMRC. The main headlines from this paper appear to be: The UK will continue to have a VAT system after it leaves the EU Businesses will need to apply the same customs rules to goods moving between the EU and the UK as they would for the rest of the world Postponed accounting for import VAT will be applied on goods coming into the UK VAT will be payable on goods entering the UK as parcels sent by overseas businesses (currently true for parcels from outside the EU). For parcels worth up to £135, a technology-based solution will be applied where overseas businesses register with HMRC in order to pay VAT The UK will cease to be a member of EU VAT IT systems including the VAT Mini One Stop Shop As has been made clear from this paper, the Government’s priority in the event of a no-deal Brexit is that trade with our European neighbours be protected where possible. This is with the aim of maintain confidence in Britain and our products & services from overseas, in an ultimate attempt to try and stave off recession. VAT might be an EU driven tax but, at 21% of HMRC’s total revenue, it would not be possible for VAT to simply disappear – so trading rules will be established as soon as possible. With the focus on trade, perhaps it is no surprise that the VAT registration threshold hasn’t been mentioned as yet. We hope this is properly considered in due course. A 2017 AAT member survey indicated support from a third of members for a significant increase to the current threshold, which at £85,000 is already the highest in the EU, but another third called for a reduction to the personal allowance or the EU average of £25,000. VAT is a complex area that splits opinion. Reducing the threshold to (say) the personal allowance could make for a simple solution, but would also result in additional burdens for small businesses, many of whom strive to keep their turnover under the threshold.
My experience as an AAT intern Posted 08/24/2018 by Deborah Owoyemi & filed under Inspiring stories. After watching a presentation at my sixth from by Masruba Tasnim, a programme manager for The Brokerage (a City of London based social mobility charity that aims to provide career opportunities for young Londoners) I was inspired to apply for a summer internship. The presentation made me aware of the numerous internships available as well as the assistance and guidance provided by The Brokerage, for example, insight days and masterclasses giving advice on how to develop employability skills. Various benefits of a summer internship flooded my mind; it would make me more employable in the future, give me an insight into working in the corporate world, and make my dull CV more appealing. Furthermore, I wanted to put my summer holiday to use by being productive whilst earning some money, a paid internship was the perfect option. Initial thoughts As a student finishing sixth form, I initially thought working as an intern in a professional organisation would either be very stressful; meeting endless deadlines or being shown how to do things without being given the opportunity to try things out yourself. However, on the first day of my internship I was surprised to be welcomed by many of the AAT staff. From warm smiles to short conversations in the kitchen, I was made to feel comfortable and at ease. Sharing this experience with six other interns, and entering a friendly atmosphere soothed my initial nerves. Then being told that the organisation has a smart-casual, relaxed dress code was the icing on the cake. Entering into the world of work This internship has given me a taster of working life, providing me with appropriate tools and transferable skills essential for university and working in a professional environment. As I had a rotational role, working in three different teams has taught me the importance of flexibility, communication, working under pressure, problem solving and multi-tasking. Public Affairs was my first team. Attending parliament meetings on issues such as segregation in the workplace allowed me to witness the processes in shaping public policy. I was kept on my toes, as every day I was presented with a different task. Working in the Professional Standards team provided me with more insight into how AAT operates as a responsible organisation. I enjoyed working with the Insight Team to create a survey on Green room (AAT’s online research community). I was also given an exclusive tour behind the scenes of the online research forum. In my final team, Change Project Management I learnt the importance of teamwork and organisation, especially after creating a massive programme plan wall chart (which I’m hoping wouldn’t drop). Internships are essentially long-term investments for not only businesses, but for people who want to get their foot in the door Achievements and Highlights One of my biggest achievements was being on time every day, and remaining energised. The first week was a bit of a struggle as my body clock had to adjust to this new routine, and I had to remain focused during meetings. I later adapted to the work-life routine, and found myself routinely grabbing a cup of coffee every morning. On a more productive side, meeting Chris Stephens MP (of the Scottish National Party) was one of the highlights of my internship. My manager, Phil Hall (Head of Public Affairs and Public Policy) and I visited Parliament to discuss AAT members concerns around HMRC staff numbers and training. Being informed of Stephens’ support for workers’ rights, I was able to squeeze in some questions about zero-hour contracts. Overall, delivering work to a high standard has been a great achievement. Some may think that interns are given low-skilled tasks however, as an AAT intern, I was given the opportunity to get involved in various important activities. I have attended external and internal meetings on significant issues such as cyber-security and introducing automation in the workplace. I have also researched and written a comprehensive document detailing alternatives to tax rises to fund the increased investment in the NHS, this was recently announced by the Prime Minister. The document was circulated internally amongst the policy team, and forms the main basis of a campaign that AAT will launch in September to influence policymakers. Looking back AAT has exceeded my expectations, and after the AAT summer fun day event on the first week, it did not take long to get used to the social-friendly culture of the company. The other interns and I even had the opportunity to get to know more about the chief executive of AAT, Mark Farrar and vice versa in a morning catch-up meeting. After attending an EDI (Equality, Diversity and Inclusion) champions meeting, it was very clear to see the great amount of effort AAT puts in to promote diversity, equality and inclusion. Not to mention the self-defence, yoga and mindfulness sessions provided to promote staff-well-being which AAT intern Bilikisu described as “relaxing, fun and exciting”. It was very refreshing to see an organisation placing as much value on the environment, community and ethical issues as they do about their main order of business. Importance of internships In my view, internships are essentially long-term investments for not only businesses, but for people who want to get their foot in the door. You can become equipped with relevant skills and aware of the culture of the company, increasing your chances of being employed by the company in the future. For young people, not only do internships allow students to do something productive during their holidays, but they may also tackle the issue of undergraduates failing to get a job due to lack of experience. Exposing young people to the work environment would help them develop realistic (SMART) future plans to achieve career goals. Internships can provide students with insight into a particular industry so that they can make decisions about their careers earlier on. I believe more needs to be done to increase students awareness of internships available to them. Previously, I thought they were only available to post-graduates, it was not until I signed up to The Brokerage that I realised how much was available. Nevertheless, organisations such as The Brokerage have done a lot to help young people access experiences of work, employability skills and jobs through partnerships with employers. This is demonstrated by the numerous of workshops they run for example, workshops on improving CVs, Into Work conferences and giving young people tips for interviews e.g. the STAR model which stands for Situation, Task, Action and Result. This has been extremely helpful in providing young people with guidance and has made the transition from the school environment to the workplace a lot easier. Image left to right : Diogo Ribeiro Camara, Amali de Silva, Nana Boateng, Khadija Patel, Deborah Owoyemi, Umme Faathimah, Bilikisu Salami. Following the Business Traineeship Programme, The Brokerage awarded AAT, Employer Newcomer of the Year award.
Summer learning: get your data skills up to speed Posted 08/23/2018 by Mark Blayney Stuart & filed under Accountancy resources. As the role of the accountant changes, the importance and usefulness of data increases proportionately. Indeed, being able to understand data and extract insights from it is perhaps the key differentiator that the accountancy profession now has to enable its strategic shift from financial monitor to business advisor. So what can you do over the summer break to get your data skills as up-to-date as possible? Understand the difference between data and insights “Much of the skill is in identifying what your data actually brings in that’s of benefit to you,” says Chris Daly, Chief Executive Officer at the Chartered Institute of Marketing. The trick, Daly explains, is interpreting the data you have. “Aim to get the broader picture, rather than simply analysing only what’s in front of you.” For example, “you can have a fantastic percentage increase but not be generating the impact you’d expect – you need to get under the skin of the figures and bring a human approach.” Look at predictive analytics Perhaps the most latently beneficial technology for accountants is predictive analytics – looking at a range of scenarios and making data-driven assessments. As Dan Somers, CEO at Warwick Analytics puts it, “before the big data phenomenon, finance departments were analysing the known unknowns such as profitability and return on investment.” Nowadays, they are “not just analysing the structured information,” (i.e. spreadsheets), but are also considering “semi-structured and unstructured data, enriching traditional finance data such as SAP or management information systems with data from other departments.” Know the legislation GDPR came into force on May 25 this year and many companies now need to appoint a Data Protection Officer. Good knowledge of the legalities around data protection will stand you in good stead to differentiate yourself in your career –brushing up on GDPR can be a useful place to start. “The two drivers are transparency and accountability,” says Ardi Kolah LL.M, Director of the GDPR Programme at Henley Business School. “It’s a misconception to think about GDPR purely from the point of view of compliance. GDPR is wider – it’s about reputation and controlling risk.” It’s not just about safeguarding rights and freedoms, Kolah explains, but to “deepen digital trust and – ultimately – enable companies to do more with people’s personal data. It’s a framework for the digital age, in other words, which did not exist before.” Aim to get the broader picture, rather than simply analysing only what’s in front of you Find causal links “There’s the potential for huge amounts of data analysis by tracking usage of web sites and apps,” says Charles Nixon, Chairman at Cambridge Marketing Colleges. “But the biggest issue is – can you find causal links between them?” Say you have placed an advert offering services and you want to identify growth from the data take-up. “In the old days, you would be in the dark; you would say, I placed an ad, I have no idea who saw it but sales went up so it must have worked.” Today, the data tracking makes this much sharper; “I can see how many clicked and went to the website.” The caveat for Nixon is that this “is the same scenario, it’s just more digitised. You don’t know whether it actually turned into a purchase because it’s not the same cookie.” For Nixon, this means that “you have the key, but you can’t prove the causality. How much of your data analysis is implied, and how much of it can you actually prove?” Be up to speed on the cloud It may sound obvious but ensure your knowledge of cloud software such as Xero, QuickBooks and SAP is comprehensive and up-to-date. If it isn’t, consider whether you need some training in order to fill the gaps. What areas are you not confident in? What’s new on the horizon? Try the extensive online resources at AAT, ACCA and CIMA for help. Remember that robust data skills are empowering “Technology enables us to automate much of the reporting function that has been the classic role of accountants,” says Sam Ellis, Head of Operations and Finance at InterWorks Europe. “It’s also allowing users to self-serve their analytics.” Typically, Ellis, says, “in the past we’d send a report to a client or a colleague and they wouldn’t be able to do anything with that report – they’d make requests to find out how to change different parts of it. But now, the technology allows you to empower them to make their own changes – for the visualisation they’re actually seeing.” Not only do you get back time to do analysis yourself, “you are also enabling other people to better analyse the data you’re presenting.” Enhance your data analytics skills “Some accountants may look at this new technology and think it’s just replicating what they already do, which is the measurable part of things,” says Ellis; “for example, to produce a P&L or a balance sheet and ask, why is this.” What data analytics can do, however, “is to measure the things they aren’t currently looking at. It’s about freeing you up to manipulate what you’re seeing at the moment, and look it from lots of different angles very quickly.” However, Ellis adds, “it’s all measuring something that is quantifiable. Data analytics is quantitative – not qualitative.’
Why there’s no perfect route to becoming an accountant Posted 08/22/2018 by Jessica Bown & filed under Career, Students. The choices you make at the beginning of your career in finance could have a huge impact on the rest of your working life. So how do you know what courses to take? Or what level to aim for? Here are some words of wisdom from finance professionals and students at different stages of their careers. Faster isn’t always better When you are starting out, getting qualified as quickly as possible can seem like the Holy Grail. However, taking the time to really get to grips with the basics could prove a better approach in the long run. That’s why accounts assistant Ceara Stephenson, who currently works for Tax Assist, chose to take the Foundation Certificate in Accounting when she started studying with AAT in September 2017. “My Tutor and I went through the differences between Foundation Certificate and Advanced Diploma,” Stephenson said. “You don’t need foundation to study advanced any more, but I still decided to start with foundation to get the foundations in place for when I progressed.” Now a commercial finance business partner, Dairin O’Donovan agrees that skipping the basics can make life a lot harder. “When I started my accountancy studies, my local college was offering an Association of Chartered Certified Accountants (ACCA) course, so I went straight into that,” she said. “Thankfully, I had some on-the-job experience from my first finance role as an accounts assistant, which helped me to cope. But if I were starting out now, I would take the accountancy GCSE, then work my way up the AAT ladder first.” Setbacks can make you stronger Taking a wrong turn or facing a setback early in your career doesn’t have to be a disaster – especially if you use the experience to make a positive change. “I got my first job in accountancy after leaving university part way through a civil engineering degree,” O’Donovan said. “It was tough at the time, but I’m so glad I decided to switch to accountancy. It was definitely the right move for me.” While Stephenson also regrets wasting time before starting her accountancy training, she too believes she is now on the right track. “If I could go back and do it differently, I would start AAT straight after leaving high school, rather than doing my AS Levels,” Stephenson said. “But at least I know that now I’m on my way to a great career.” For AAT apprentice Jessica Brindle, struggling with the online AAT Professional Diploma pushed her to go back to the classroom, which has proved a much more productive environment for her. “I studied for Levels 2 and 3 online,” Brindle said. “But Level 4 is a big jump up and I struggled to do it online, partly because the job I had was very demanding and I couldn’t concentrate. Luckily I was able to change to the classroom, which was clearly the right choice as I’m now on my last module.” Taking a wrong turn or facing a setback early in your career doesn’t have to be a disaster Work experience is essential While the right qualifications are vital for a career in finance, there is no substitute for the lessons learned while working in the field. Brindle, who began her apprenticeship in 2014, believes working your way up is the best option. “Personally, I think an apprenticeship is more useful than a degree, because as you’re learning you’re putting it into practice straight away,” she said. “I’ve found it makes what I am learning easier to pick up, especially as I can check things with my colleagues as well as my tutor. So my advice to anyone considering an AAT apprenticeship would be: do it!” O’Donovan agrees that work experience is an important part of your journey to becoming a successful finance professional. “You can’t learn it all from textbooks,” O’Donovan said. “Workplace experience is a key part of the process. It’s also a great way to see how rewarding accountancy can be.” There are lots of ways to use your qualifications Earning AAT qualifications opens the door to a range of further qualifications, as well as a wide variety of exciting careers. “AAT is a great stepping stone to other higher qualifications,” Stephenson said. The options open to you include: Getting a job in accounting or finance. Becoming a chartered accountant by continuing your studies with a chartered accountancy body such as the ACCA. Full AAT membership (MAAT), which is available to those who complete the Professional Diploma in Accounting as well as the AAT’s work experience requirements. Using your qualifications to study to become a tax specialist with the Association of Taxation Technicians(ATT). Going to university – using your AAT qualifications to get a place (the Advanced Diploma in Accounting has A level equivalence and attracts around 56 UCAS points). Becoming self-employed and offering accountancy, taxation or related consultancy services on a freelance basis. You can explore the next stage of your qualification journey by the AAT Skillcheck test
Making Tax Digital: a simpler system or muddying the waters? Posted 08/21/2018 by Brian Palmer & filed under Making Tax Digital. We are now less than eight months away from the first tranche of mandation concerning Making Tax Digital (MTD), which initially affects VAT registered businesses with VATable turnover of at least £85,000. From 1 April 2019 those affected will be required to onboard (register for MTD), maintain a digital record of their VAT transaction and file MTD-compliant VAT returns direct from their own software. Since MTD’s launch by the then-Chancellor George Osborne, way back in 2015, the order of the proposed roll out of MTD has changed. It is, however, still viewed as a key component in the Government’s plans to make it easier for individuals and businesses to engage with their affairs, as well as transforming HMRC into one the most digitally advanced tax administration in the world. Doubts about MTD Right from its launch, I have noticed a gradual acceptance of the move towards digital and to quarterly reporting. Indeed, in some quarters there has been a genuine enthusiasm for it. Which was particularly noticeable at the recent AAT Annual Conference that many of the 300 or so members who were despondent about MTD two years ago were at least more accepting of the new scheme. MTD is designed to be revolutionary, aligning HMRC’s processing of our taxes with how banks and many other financial institutions handle our finances. But doubts clearly remain in place. In a recent webinar I took part in for Accountancy Age, 54% of the 200 or so accountants participating in the event admitted they remain unclear as to what is expected from them under the MTD initiative. Furthermore, 41% said they were not very prepared at all for MTD, compared to 21% who said they were moderately prepared and just 2% claiming to be well prepared. Stats that do not make for positive reading when we are nine months or so from the first go-live date, and when many pilots are already taking place. Simplistic or suicidal? The biggest challenge, as noted by the poll results following the webinar and supported by a chunk of the comments and questions we were seeing, revolves around the move from annual to quarterly reporting, which will start with VAT before income tax follows suit. On the face of it, it’s easy to see why people think this could cause an issue. Switching to digital reporting is one thing and clearly an advantage over having to sift through piles of invoices. But why the need to do this every three months, when many clients barely cope with annual returns? With increasing levels of data capture automation led by cloud-based technology, many accountancy firms are already able to provide real-time information in the blink of an eye, and so a switch from annual to quarterly returns should prove inconsequential. In fact, as advances in technology are harnessed by software developers, the future of accountancy will be less about MTD and more about accountants acting as consultants through advising their clients about their business activities in real-time. At the time of writing, there are at least 30 developers with VAT-MTD ready products, at least 40 more expected to follow and a total of more than 150 stating their interest in providing the necessary software required. Therefore this should be feasible for businesses to do, but many software providers really need to act quickly if they are to prevent their competitors from stealing a march. I believe that MTD presents a massive opportunity for agents as those that can educate businesses who are VAT-registered with what they need to do to move their taxes into a real-time scenario. MTD: an opportunity for efficiency Without doubt, MTD creates more opportunities for accountants than threats, even if this could equate to an initially high workload. In addition, efficiency gains can be made for businesses who may have previously lost many working hours around the time of the annual tax return. All of which, of course, allows the accountant to use their time and effort on greater value-add for their clients, taking more of a consultancy role, creating more trust and most likely longer-term relationships. A version of this article first appeared on Accountancy Age.