Accountants react to the King’s Speech

Posted by & filed under Members, Policy.

The new Labour government promises to “take the brakes off Britain”, but do the announced bills help?

In the first monarch’s speech delivered under a Labour Government in 14 years, King Charles this week unveiled 35 bills plus four draft bills centred around economic growth and wealth creation for ‘all’ communities.

The ‘packed’ speech is the busiest since 2005 when Tony Blair’s third government unveiled 50 bills in total.

The 2024 plans, which will ‘take the brakes off Britain’ includes establishing a new Industrial Strategy Council to set targets and monitor progress and setting up a new publically-owned Great British Energy provider headquarted in Scotland to excelerate investment in renewable energy.

Plans to accelerate housebuilding, along with giving renters greater rights and protections were also included, along with plans to renationalise railways, reset the relationship with the EU and remove VAT exemption for private school fees.

Of particular interest to accountants, bookkeepers and their clients, were:

Draft Audit Reform & Corporate Governance Bill: establishing the Audit, Reporting & Governance Authority in place of the Financial Reporting Council (FRC). It will have greater powers to tackle bad financial reporting to improve corporate governance and audit reporting.

Budget Responsibility Bill: future fiscal measures will now need to be independently assessed by the Office for Budget Responsibility.

National Wealth Fund Bill: allocates £7.3bn across UK Infrastructure Bank to kickstart investment.

Planning and Infrastructure Bill: includes measures to speed up housebuilding by streamlining and fast-tracking the planning stage.

Employment Rights Bill: bans zero-hour contracts and fire-and re-hire practices while strengthening existing employee rights around flexible working, paternal leave, sick pay and unfair dismissal.

Skills England Bill: introduction of new skills body for England made up of businesses, providers, unions and local authorities. It will also include reforming and expanding the Apprenticeship Levy.

Pension Schemes Bill: includes measures to improve value for money on pension schemes.

Digital Information and Smart Data Bill: improves data-sharing standards and systems around data verification services.

Cyber Security and Resilience Bill: expands the regulation of digital services and improve cyber security measures.

Sustainable Aviation Fuel (Revenue Support Mechanism) Bill: encourages investment in the production of sustainable aviation fuel.

So what do accountants think?

The Employments Rights Bill may have a significant impact on smaller businesses

Wendy Ross, Founder and Director, Tonbridge Accountants

The government have committed to securing economic growth and to help people move on from the cost-of-living crisis, so overall it is very positive. However, this is a huge task and people will want to see action in order to build trust.

The Budget Responsibility Bill is key to this. The public will have more faith if tax and spending changes have been thoroughly assessed by an independent party. The National Wealth Fund Bill could also be very positive, especially if the mission to deliver growth extends down to smaller businesses.

However, it’s surprising that from 40 bills there was relatively little on tax reform. Removing the VAT exemption for private school fees, although politically topical, isn’t likely to have a significant impact on the wider economy. Most of the measures outlined will take a very long time to develop and, as a result, there is nothing that will be of particular benefit to our client’s businesses in the shorter-term.

The Employments Rights Bill may have a significant impact on smaller businesses with few employees. Employment law is already complex and if the changes to workers’ rights aren’t rolled out in a sensible way they could prevent the hiring needed to drive the desired growth.

Given the long-term nature of the plans, we look forward to the next budget, which will give a feel for the more immediate plans in supporting business and boosting the economy.

Verdict: The Employments Rights Bill may have a significant impact on smaller businesses as employment law is already complicated.

The King’s Speech was cautious, emphasising stability

Stephen Leonard, FCCA ACA MAAT, Partner, J L Winder & Co

After several false starts under the previous government, the long-awaited ‘no-fault eviction’ legislation will finally get over the line. Tenants will gain much needed protection, but it will have a negative effect for decent landlords who will find it harder to obtain their properties back in genuine situations.

The planning reforms aim to help the government achieve their 1.5 million new homes target, which is welome. Yet it’s unclear if this includes affordable homes to help Gen Z get on the property ladder. There are also likely to be objections about the use of ‘grey & green’ belts sites.

Employment laws are also on the agenda. Proposals such as the right to flexible working from day 1, a ban on zero-hour contracts and the equalisation of minimum wage across all age bands will create an increase in admin and be a financial burden for businesses.

While these laws aim to prevent exploitative practices, it will create issues. Some zero-hour contracts may genuinely benefit some employees for example while a 16-year-old school leaver on the same wage as an experienced 25-year-old may not go down well. It will also be costly for many small businesses.

There was little about taxation changes or reforms as this will be saved for the Chancellor’s Autumn budget.

Verdict: The King’s Speech was cautious, emphasising stability and acknowledging that growth will take time.

I was hoping for an increase in personal allowance and tax bands

Ben Rose MAAT, Partner, Martin Seitler & Co

The main point that stood out is the planned VAT on private schools. Some parents may be forced to move their children out of the private school system. This will mean state school funding will have to increase to cope with greater demand. We could potentially have fewer high caliber students too, meaning fewer high income earners in the future.

Moreover, many parents with children in private schools aren’t necessarily wealthy. So this tax is aimed at the wealthy but is actually going to affect the working class, too.

However, the accelerated house building scheme looks interesting and many of our construction clients will feel that this may help them grow their businesses. 

We also have many clients who own and rent out property. The new rules giving tenants more rights will obviously affect them. We’ll see a few people struggle with the more difficult tenants.

Plans to nationalise the rail network could, one day, boost the economy if the exortionate cost of train travel is addressed. It should not cost £300 for a return ticket from Manchester to London.

I would have liked to have seen more tax cuts and help for small businesses, including an increase in the personal allowance and tax bands. Small business and middle income families will continue to struggle and will fight until something changes.

Verdict: I’d have liked to see an increase in the personal allowance and tax bands to help small businesses and middle income families.

Beware the energy costs of using AI

Posted by & filed under Artificial intelligence, Energy crisis, Sustainable Business.

Generative artificial intelligence has great promise, but it also comes with worrying energy demands.

The past two years have seen an explosion in the widespread use of artificial intelligence (AI). From writing emails to booking a flight, AI has become embedded in many areas of our lives – both in the office and the wider world. And, as is usually the case, evangelists for the technology have been out in force to explain why AI can solve many of society and industry’s problems – from climate change and burnout, to cancer diagnosis and legal disputes.

However, alongside existing concerns over privacy, intellectual property and security, a new worry has emerged around AI- how much energy it uses. And the numbers are scary. Consider this: A query run through the AI chatbot tool ChatGPT needs nearly 10 times as much electricity to process as a Google search, according to estimates by Goldman Sachs.

Meanwhile, Cornell University estimated that training one LLM emits about 300,000 kg of carbon dioxide. For context, that’s roughly equivalent to making 125 round trip flights between New York and Beijing.

Estimates on the magnitude vary, but there’s no doubt of the direction of travel – more AI, more energy consumed. John Pettigrew, CEO of the National Grid, stated that the power consumed by AI and quantum computing would increase six-fold in the next decade.

Even sooner, data centres’ electricity consumption in 2026 is projected to reach 1,000 terawatts, roughly Japan’s total consumption, according to a Yale study, while another industry analyst projects that data-centre energy use could triple between 2023 and 2030, with AI accounting for 90 per cent of the growth.

Even the companies investing in and promoting AI admit this is a significant issue. Google says that since 2019, its emissions have increased by 50%, largely due to the boom in GenAI. The firm estimates its electricity consumption grew by 17% in 2023 and its data centres accounted for as much as 10% of all data centre electricity consumption globally, while water usage also increased by 17%. Meanwhile Microsoft says its emissions are 30% higher than 2020 levels.

Under the hood

So why do AI-related tasks demand so much more energy? “AI models demand high energy usage for a couple of reasons, such as training and constant processing,” explains Ramprakash Ramamoorthy, Director of Research at ManageEngine.

“The AI models require GPUs to process massive datasets efficiently. GPUs excel at processing these datasets in parallel due to their thousands of cores, and their data-optimised architecture makes them ideal for the task. Once trained, the AI models need to be up and running to perform their tasks, whether recognising faces in photos, predicting anomalies, generating content, or recommending products online; these computations require ongoing power.”

Naturally, many of the tech giants driving the development and adoption of AI have downplayed the concerns. For instance, Bill Gates has said AI, rather than posing a problem for the environment, is actually far more likely to drive the solution by helping create more efficient energy systems. It’s worth noting that Microsoft has recently announced a $3.3bn investment in Wisconsin to spur AI innovation and economic growth – just the latest in big dollar bets on the technology.

So are these concerns justified? “Yes, they certainly are,” says Peter Wood, Chief Technical Officer at Spectrum Search. “Just consider how much computing horsepower is needed to train and deploy large-scale AI models – it’s quite staggering.

“We’re not just talking about powering up servers here, there’s also cooling systems, network infrastructures, and the non-stop operation to keep these high-performing environments going. The carbon emissions from all this energy use can’t be brushed aside. And as we move further into the AI era, the energy demand will only increase, underlining the urgent need for greener practices.”

Grappling for control

Not surprisingly, calls are growing for greater regulation, both here and in the US. “Unchecked and unregulated, AI use has the potential for disastrous environmental consequences, not to mention the additional ethics, accuracy and privacy risks,” says Maxime Vermeir, Senior Director of AI strategy at ABBYY, a company that specialises in developing Small Language Models (SLMs), a specialised subset of AI that requires less computing power.

As greenwashing continues to be a problem, Vermeir says we need to make sure businesses are held accountable for the environmental impacts of the development of their own AI. “An important part of this is proper legislation and regulation. Early AI legislation has mostly focused on privacy and other ethical concerns which are essential for responsible AI use, but the environmental implications are largely overlooked.”

Even with improved regulation, legislators can only go so far. “Organisations must take responsibility for how they leverage AI themselves. One thing they should consider is pivoting to purpose-built Small Language Models (SLMs), which specialise AI for specific tasks and goals.”

How to fix it

As to what else companies that are using AI should do about this, core accounting skills will be vital. “Businesses should start by defining a strategy to make sustainable decisions across the entirety of their IT estate to reduce their digital carbon emissions,” says Luis Rosenthal, Innovation Lead for KPMG’s Ignition innovation lab.

“When it comes to AI, measuring and then managing the environmental impacts of the technology is key. This can be achieved by creating a baseline using a common set of measures and then monitoring the change associated with the implemented AI models.”

Spectrum Search’s Peter Wood says businesses should be considering how to harness Gen AI to bring down their energy use. One of them is pouring investment into energy-efficient infrastructure: “This could take the form of upgrading to more capable hardware, tweaking software to cut energy use, and incorporating advanced cooling technologies,” he suggests.

“Another strategy is to switch to renewable energy sources, which could drastically shrink the carbon footprint of data centres. Not only would this be good for the environment, but it could also make financial sense as the cost of renewable energy continues to drop.”

Businesses could also use AI itself to manage and reduce their energy usage. For instance, AI-powered energy management systems can predict and adjust power consumption on-the-fly, making sure that energy is used in the most efficient way possible. “It’s also worth considering the life cycle of AI models,” says Wood. “By regularly updating and enhancing models to be more efficient, businesses can cut the amount of energy needed for training and deployment.”

ManageEngine’s Ramamoorthy suggests that businesses should consider developing domain-specific GenAI models and training them with smaller datasets and efficient algorithms. This not only ensures less energy consumption but also less financial strain on the businesses.

Powered by contextual intelligence, domain-specific models also deliver promising results. “Businesses can also use cloud platforms that prioritise efficiency and sustainability,” Ramamoorthy says. “They can look for providers who power their data centres with renewable energy sources, like solar or wind energy, to reduce their carbon footprints.”

Why might this matter to you?

The ISSB’s Global Sustainability Disclosure Standards (which AAT members can read about on Knowledge Hub) are a key milestone in creating a global baseline disclosing the effect of climate-related risks on a company’s prospects. They include reporting for Scopes 1-3 of emissions, which includes calculating the emissions directly and indirectly generated by a company.

That means accountants need to keep an eye on their companies’ energy useage.

Increased energy use that is directly attributable to AI-related tasks will be difficult to track in terms of which of Scope 1-3 emissions it falls into.

The example of Microsoft is instructive in that the company has attributed the increase in its emissions as largely due to indirect emissions (Scope 3) from the construction and provisioning of more data centres to meet customer demand for cloud services.

According to the Register, “Scope 3 accounts for more than 96% of Microsoft’s total emissions, which includes those from its supply chain, the life cycle of its hardware and devices and other indirect sources.”

For the record, Microsoft has said that it “aims to address the Scope 3 issue through steps such as getting suppliers to use renewable energy.”

As this issue shows, companies will need to take more care to track energy use throughout the supply chain.

What should HMRC’s key priorities be under the new government?

Posted by & filed under Members.

Accountants discuss which problems the department should address first, given Labour’s goals.

HMRC has been making headlines lately but unfortunately, for the wrong reasons. In one case, it failed to prove a valid discovery assessment when a nom-dom fell foul of complex remittance basis rules and, in another, failed to impose a penalty on a high profile £14m tax avoidance scheme. Despite HMRC’s powers to tackle tax evasion, the department hasn’t fined anyone involved in tax fraud or tax evasion for five years.

It’s also recently been reported that HMRC knowingly ‘withheld’ offshore tax avoidance figures during the election.

In addition, the department is currently facing a huge wage bill despite staff cuts, because it’s having to rely on overtime to address the backlog.

And when it comes to service levels and performance – accountants, agents and bookkeepers continue to experience frustrations. They cited:

  • huge delays in receiving VAT numbers
  • long telephone wait times
  • lack of reliable and timely support from HMRC staff
  • lack of staff training
  • correspondence delays.

It seems that HMRC has a long way to go to improve its customer service reputation as well as its ability to deal with tax fraud and tax evasion.  However, in their manifesto, Labour committed to allocating HMRC around £855m in funding to help recruit new compliance staff.

So with all this in mind, we asked accountants what HMRC’s key priorities should be under the new government.

We’d like to see investment in HMRC’s R&D unit

Stephanie Hurst, Tax Director, Monahans

HMRC phone call waiting times are the longest they have ever been, at around 40 minutes on average, and actions such as issuing self-assessment refunds or responding to letters can often take months rather than weeks.

Labour has previously pledged to invest around £855m in HMRC, primarily to tackle tax avoidance by increasing registration and reporting requirements, strengthening HMRC’s powers, investing in new technology and renewing focus on large businesses and wealthy people.

But we would like to see some of this investment directed towards the R&D unit of HMRC. Over the last year, HMRC has changed the way in which it conducts R&D enquiries and the industry has seen a significant rise in R&D activity.

However, HMRC’s approach falls very short of the service levels we should expect. Communicating with the R&D unit is very difficult and businesses are, in certain circumstances, waiting more than 6 months for a written response. As a direct result of HMRC’s conduct in this area, some small businesses are reconsidering whether or not it is viable to continue with their innovation projects and have been exploring alternative funding and revenue options. Instead of encouraging UK innovation, HMRC appears to be actively discouraging genuine claimants.

Verdict: There needs to be investment in HMRC’s R&D unit.

Crack down on tax avoidance and progress umbrella company regulation

Paul Newsham, Partner, RfM Accountants and CEO, Payroll Compliance Authority (PCA)

After the election hiatus, HMRC should now focus on cracking down on tax avoidance schemes as a priority. Labour is coming in with guns blazing, setting many plans in motion, but these will all cost money. A critical step will be to bolster treasury coffers and focus on tax avoidance, which is a monumental issue in the UK and is a sensible place to start.

Furthermore, given the party’s focus on supporting workers across the country, I strongly feel that Labour should progress with regulation of the umbrella company market, which was mooted by the previous government earlier this year through a due diligence regime. This would protect thousands of contract workers and hiring firms that are at risk daily.

A thorough due diligence regime is the only realistic way to shut down the myriad of tax avoidance schemes run by fraudulent umbrella companies and should be a key priority for HMRC under the new government.

Verdict: Crack down on tax avoidance schemes and implement umbrella company regulation.

Recruitment drive is needed to get on top of delays

Toby Ryland, Corporate Tax Partner, HW Fisher

There is nothing more frustrating than trying to get in touch with HMRC. Call waiting times are at an all-time high, responses take forever, and getting hold of the person you need is borderline impossible. This is causing serious delays at all stages of interaction. Tax enquiries are taking too long to solve, and repayments are slow to process. The next government must commit to staffing HMRC properly to stop the needless cycle of delays and the frustration it causes for everyone involved.

Banks also need to be quicker at opening new business accounts, especially for those that are inward investors into the UK. It is shocking that an overseas business can incorporate a UK subsidiary company, register it for tax, VAT and payroll within a short time, but cannot open a bank account for months and months. If the UK is serious about attracting more overseas investment to create new jobs and wealth, this issue needs to be fixed sooner rather than later.

Verdict: HMRC needs a big recruitment drive to get on top of delays.

Improve response times and provide better customer service

James Wood, Accounts Partner, JS Accountants and Business Advisors

The key priorities for HMRC should include focusing on improved response times, customer service consistency and enhanced training programmes.

Improved response times

One of the most pressing issues we encounter is the variability in response times, particularly with VAT registrations. Some applications are processed within days, while others can take months. This inconsistency not only delays our operations but also causes uncertainty for our clients. HMRC needs to streamline its internal systems and processes. This could involve increasing its workforce to handle the volume more efficiently, or improving internal communication.

More consistent customer service

We frequently experience situations where we receive different answers to the same query depending on who we speak to. This inconsistency undermines our credibility with clients and creates unnecessary frustration. Implementing better training programmes and internal systems for recording and tracking conversations can help ensure that all operatives provide accurate and uniform information.

Addressing phone line accessibility

The intermittent plans to close some phone lines have further compounded service issues. Reliable access to phone support is crucial for addressing urgent matters swiftly. Maintaining and potentially expanding phone line availability should be a priority to meet the service expectations of both businesses and individuals.

Verdict: HMRC’s priorities should be on improving response times and providing better, more consistent customer service.

Step by step: How to sign up for AAT SummingUp Newsletter

Posted by & filed under Training providers.

Here we will show you step by step how to edit your MyAAT communication preferences in order to be able to receive the SummingUp newsletter, if you’re a Training Provider or an Assessment Venue staff member.  

Make sure you’re signed up for our SummingUp newsletter –  for the latest updates, support, and information on your qualification/ assessments.  

SummingUp comes out every Friday and includes essential updates, resources, event webinars, conferences, articles, important deadlines and so much more.  

1. Log into your MyAAT account

2. Click on the three dots next to your name (top right corner) 

3. Go to ‘Edit my details’ 

4. Scroll towards the Email preferences towards the bottom of the page, where Essentials Updates is located and click on ‘Edit’ on the right-hand side 

5. Select ‘Yes’ to opt into Essential Updates 

6. Click on ‘Update’

7. Click on ‘Confirm my details’ to save your changes. You should get the next Essentials news emails in your inbox in the next circulation. Please ensure you check your junk/ spam mail

You can manage your communication preferences here.

How to boost your business through effective PR and media relations

Posted by & filed under Marketing, Members.

PR and media relations should be an important part of any accountancy firm’s marketing plan, but you need to appreciate the rules of engagement.

We all know of those media-savvy accountants who appear in the local paper, on the radio or have a strong presence online. They make it look so easy, but PR (public relations) and the ability to deliver effective media interviews are skills that can be learned.

But why should you bother? Well, being interviewed by a journalist costs nothing but your time (if you are not using a PR agency) and it is an opportunity to share your personal and company’s expertise with thousands or sometimes millions of people.

PR boosts a business’s credibility and can be an important asset to protect your reputation.

Coverage in the local newspaper or being positioned as a money expert on local radio following the Budget can often have a greater impact than other forms of marketing.

“Any accounting firm can raise its corporate profile through PR, with or without the help of an agency,” says Daniel Hill, a PR specialist at marketing agency Vertical Leap. “The benefits include enhanced brand visibility and client acquisition.”

PR starts with the content you place on social media, particularly LinkedIn. This is one place where journalists will seek out sector experts.

“This content can take the form of articles, blog posts, whitepapers or case studies and should address current trends, regulatory changes and best practices in accounting and finance,” says Hill. “You may also want to share client testimonials and case studies to enhance credibility and demonstrate your firm’s ability to deliver results. You will also appear on a journalist’s radar if they see you at industry conferences speaking on panels or at local business events.”

Who is your audience?

For media relations to be effective you must be clear about the audiences you want to reach. Who do you want to read your words or hear you on the radio during an interview? Who is actually reading and listening?

Are you speaking to a business audience via the trade press or to the public via local radio or television? How old are the readers or viewers likely to be and are you talking to more men than women – or vice-versa?

You must also consider a particular audience’s knowledge of what you are talking about because this will affect what you say, the language you use and the examples you bring in to illustrate your points.

What is a story and how to make it interesting

Once you know your audience you must consider why people should care about what you are saying. You may think that what you have to share is interesting but the media might feel differently. News is something that is happening now, has just happened or is about the happen.

As an expert on an issue (such as the Budget or tax) you need to find a relevant story for the media. A journalist will only quote you if what you have to say will benefit the audience. The test is usually around saving time or money – or both.

One top tip is to ensure your story is topical. Can you link it to the time of year, the cost of living crisis, summer holidays, Christmas or even the football World Cup? What the journalist will be thinking is ‘why should we cover this story today?’

In addition, think about why your story is unusual or different. Maybe you are the only accountancy firm doing something, or this is first time something has happened. Perhaps you have won an award or launched a new service.

You also need to think about the human element of your story. Who is affected? Is it the consumer or a business owner? What is the real human impact on them of what you are talking about?

You should bring your story to life by talking about real case studies (named or not) or use research and statistics as this will add to your credibility.

Should you work with a PR agency?

An experienced PR agency will have established relationships with journalists, but that comes at a cost.

If you are looking at investing in a year-long PR campaign to raise your firm’s profile and secure coverage in top-tier publications and broadcast channels it may be worth the investment. After all, effective media relations is time-consuming.

“As well as increasing exposure and helping with content, a PR agency will use tools and metrics to track the effectiveness of campaigns, measure brand sentiment, and analyse media coverage, providing valuable insights for future strategic planning and decision-making,” says PR specialist Daniel Hill from agency Vertical Leap.

If you want to work alone, it is possible to look online to discover which local journalists cover business stories and who the editorial teams are on trade publications.

Making the most of the media interview

Once you secure a media interview it is important you make the most of what is a great opportunity.

Do not treat it as a question and answer session but more as a presentation. You are presenting the topic to an audience in the same way you would if they were sitting in front of you at an event.

Choose three or four things to say that will be relevant to the audience and hopefully help you win business. But don’t be overly salesy as you won’t be invited back. Talk about trends.

You should always prepare for an interview, and this includes thinking about how a specific audience perceives the topic.

Do they view it positively or negatively? Similarly, how knowledgeable is the audience of the topic? Do you need to give context and background? Finally, consider what behavioural change you want to see from the audience once you have finished. Do you want them to act differently? Don’t forget to mention your firm’s name.

It is also important to consider what tricky questions you might be asked. Run through these with your colleagues or PR team beforehand and work through your answers. These would be the type of questions people might ask you at the end of a presentation.

There are some other rules of engagement when talking to journalists. You can also ask them questions. For example, what exactly are you after from me today? Have you spoken to anyone else?

You should always be succinct. One technique is to use the rule of three. You might say: “There are three important points to mention when it comes to the changes in tax announced yesterday. The first is…”

Ultimately journalists want stories. With this in mind you need to use case studies and examples to help the reporter and the audience visualise what you mean. This is certainly true for radio where you need to be able to paint a picture with words. Using anonymised client stories can really help here.

Top tips for accounting firms considering their PR strategy

  • Create useful content (research, whitepapers and articles) that people want to read.
  • Maintain an active presence online and at industry events to remain present in key ongoing conversations.
  • Share expert opinions on changes to your industry and areas that resonate with your team.
  • Leverage your client’s testimonials to support stories for your audience.
  • Clearly define what you’re looking to achieve through PR, how you measure impact and report on success.
  • Work with a PR agency that can create compelling content with you, has relationships with journalists and editors, has their hands on the pulse of your industry news and provides insightful reports on PR activity.

Case study

Lucy Cohen is co-founder and CEO of Mazuma Money and is no stranger to using public relations and media interviews to boost her business.

By positioning herself as an accountancy industry disrupter, this female entrepreneur will always attract the interest of journalists.

The company had an interesting story to tell because she co-founded it at the age of 23 with another woman, Sophie Hughes. They used the media to introduce the concept of subscription-based accountancy services to many people for the first time.

“When we launched we didn’t have much money for marketing so we used public relations to build brand recognition,” says Cohen. “We had a good story in a male-dominated industry, but we are always innovating and trying to do things differently, which gets media attention.”

Cohen tends to get approached by journalists when they need spokespeople on different finance topics. The company is also proactive and produces press releases when Mazuma Money has news to announce.

She has also used the media to raise awareness of issues that are close to her heart.

For example, she led a campaign for better pain relief and information for women suffering after an IUD (intrauterine device) fitting. She told her personal story and more than 1,500 women shared their experiences with her. She launched a petition and the campaign was covered extensively by the media including the BBC, ITV, the Daily Mail, Metro, Cosmopolitan and The Times.

“Whether the subject is about health or accountancy the media need to see your passion for the subject and understand why what you are saying is relevant to their readers.”

But has the PR coverage and time spent actually improved the business’s bottom line?

“It is hard to track the return on PR because it is mainly about brand building. It certainly helps to bolster other marketing and adds to your company’s credibility, especially if you are a relatively new business.”

Governance fit for the future: How AAT Council is set to change for good

Posted by & filed under AAT Governance, Members.

Important changes to how AAT is governed are being considered. Here’s what you need to know.

What could be changing?

A new trustee board

Trustees are considering shifting AAT’s chief governing body from the current council to a new, slimmed-down trustee board, which meets good practice for large charities like AAT.

The board would be tasked with achieving the strategic goals of the organisation, ensuring AAT’s legal and regulatory compliance (among their other fiduciary responsibilities), and importantly: protecting the membership voice.

The board will ultimately oversee AAT’s £30m annual turnover, scrutinising operational performance. To do so as effectively as possible, appointments will be made to the new AAT Board which ensure a full range of skills, as well as diverse voices, are at the table. This will help ensure different perspectives are brought and the right questions asked.

AAT members will be eligible to be nominated to the new board, as will those with outside perspectives. All trustees will need to be knowledgeable of AAT and our work, and contribute vital skills and diverse perspectives to enhance decision-making.

A member-focused council

Trustees have also been reflecting on how best to ensure an effective, representative voice for AAT members and our communities. To this effect, consideration is being given to redefining Council to become a new ‘AAT Members’ Council’.

In practice, existing AAT trustees are likely to shift across to this new body but with a mandate more focused on being a voice for the membership. There will be a connection in place linking the AAT Members’ Council and the Trustee Board, ensuring the ongoing voice and influence of the AAT membership at the decision-making table.

What’s not changing?

Under the proposals, how AAT members nominate, run for, and are elected to, the new AAT Members’ Council are likely to remain largely unchanged from as it is now. Similarly, the method for choosing the AAT President and Vice President are unaltered in the proposed changes.

What’s on hold?

  • Current Trustees have deemed it both necessary and appropriate to temporarily suspend elections for the Council in its current form, for a period of up to 12 months from October 2024.
  • This allows members to have a say on the proposals at the AGM – AAT’s highest decision-making forum.
  • The suspension also allows for the new structure, if adopted by members, to be bedded in prior to members nominating and electioneering for roles that may be subject to change.
  • It is expected that elections will take place before the 2025 AGM.

What members say

Heather Hill FMAAT is chair of the nominations and governance committee of the AAT Council. She has been an AAT member for more than 30 years and joined Council in 2016.

“Under the current considerations, we will have an AAT Members’ Council, and AAT members will sit on that council and it is intended that they will be elected through the same process as we have now,” explains Hill.

“However, the Members’ Council will be the voice of the membership and lead community representation, along with retained oversight of their representatives appointed to the new AAT Board.”

Why are these changes being considered?

The origins of these proposals can be traced back to the governance changes that began in 2016, which saw the Council reduce in size to 20, the creation of the AAT Members’ Assembly, and the parting ways of AAT and our original supervisory bodies.

While the changes made set AAT’s governance on the right path towards greater effectiveness and more agile decision-making, there are improvements to be realised.

“As AAT Council members, we are non-executive director trustees who provide independent control over, and legal responsibility for AAT’s management and administration. As part of our role, we also endeavour to represent the wider membership” Hill explains. “We are doing both jobs together but if we separate them, we can become more agile and effective. The change would also more align AAT with the seven principles of the Charity Governance Code.”

Recent updates to the UK’s Charity Governance Code had AAT’s current governance structure potentially offside with the widely accepted guidance given our quite large Council and prevalence of a single occupational background around the top table.

“As governance standards continue to rise, and as AAT clarifies how we’ll secure future relevance for the organisation and the wider profession: it is good practice to ask ‘what’s working?’, ‘what could be improved?’ or ‘tightened up’, to support improved decision-making and greater compliance,” said Hill.

Hill said it is normal for organisations to review their governance arrangements periodically to ensure best practice in effective decision-making.

Our governance structure should support the organisation, its branch network and its wider professional community, its students and staff to reach potential. It should contribute to AAT’s relentless pursuit of our three overarching themes, delivered via four clear strategies.

AAT wants to align with the good practice standards contained in the Code to ensure AAT lives up to its values as a responsible organisation, particularly on issues of diversity, effective governance and sustainability.

What are the seven principles of the Charity Governance Code?

Organisational purpose: The board is clear about the charity’s aims and ensures that these are being delivered effectively and sustainably.

Leadership: Every charity is led by an effective board that provides strategic leadership in line with the charity’s aims and values.

Integrity: The board acts with integrity, adopting values and creating a culture which help achieve the organisation’s charitable purposes. The board is aware of the importance of the public’s confidence and trust in charities, and trustees undertake their duties accordingly.

Decision-making, risk, and control: The board makes sure that its decision-making processes are informed, rigorous and timely and that effective delegation, control and risk assessment and management systems are set up and monitored.

Board effectiveness: The board works as an effective team, using the appropriate balance of skills, experience, backgrounds, and knowledge to make informed decisions.

Equality, diversity, and inclusion: The board’s approach to diversity supports its effectiveness, leadership, and decision-making.

Openness and accountability: The board leads the organisation in being transparent and accountable. The charity is open in its work, unless there is good reason for it not to be.

What does this mean for members?

The new structure being proposed to the upcoming AAT Annual General Meeting (AGM) was agreed by Council on 25 April 2024, and will continue to be honed and developed in the coming months. The proposals require significant changes to the Articles of Association and the scheme of delegation, and members will vote yes or no to the proposed changes to the articles of association at the AGM in October (details below).

AAT continues to listen to members in many ways, and it’s important members engage in the AGM process to express their views, should they have any, on these proposals.

“It’s important that members focus on the new structure,” Hill explains. “The [changes to the articles of association] need to be looked at by themselves. Members need to feel comfortable with it and understand them, and then they can vote on that, which is a major vote.”

Have your say at the AGM

This year’s meeting will be held on 25 October at AAT’s offices at 30 Churchill Place, London E14 5RE. The event will be run as a hybrid meeting enabling members to either attend in person or join remotely. Members will be able to vote in advance of, or during the meeting and to submit any questions.

The AGM will include the presentation of AAT’s Annual Report for the year ended 31 March 2024.

Following the meeting the President and Vice President for 2024/25 will take office.

For more details email [email protected].

To read more about the changes, please see AAT President Kevin Bragg’s column in AT July/August 2024.

Accountants discuss their clients’ business sentiment

Posted by & filed under Members.

Has the general election changed business sentiment about the economy and future prospects?

The past fourteen years have been rather turbulent, marred by four general elections, two hung parliaments, Brexit, Covid-19 and ongoing economic uncertainty. So it’s no surprise that businesses aren’t necessarily feeling particularly optimistic at the prospect of a new government.

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New research from Eden McCallum suggests that the mood among many British businesses about the national economic outlook is rather downcast:

  • 4% of British businesses said they feel ‘very optimistic’ about the UK economy
  • 47% of British businesses said they feeling either ‘somewhat pessimistic’ or ‘very pessimistic’.

We asked UK accountants to share how their clients are feeling about the future of their business. How hopeful do they feel about future business success?

Clients have exciting plans but are cautious

Damon Brain, Chief Executive Officer, Duncan & Toplis

There are mixed feelings. Many clients have some exciting plans but they’re cautious to implement them during times of wage inflation, labour shortages, supply chain issues and government uncertainty.

Whilst many are supportive of the sentiment of the national living wage, it has caused wage inflation issues throughout the labour markets, increasing by nearly 10% at a time when the Bank of England is striving to bring inflation down to 2%. This then leads to higher interest rates and delays the ability to invest in growth.

Government support has also been found wanting and some clients feel that even a change of government will not improve things. Some clients are scaling back capital investment.

For a new government to have any impact, there are many things that need to be changed or revisited. Bringing in meaningful trade deals, bringing certainty over tax rates and incentives for investment and growth and ensuring that the country does not become over-regulated are all on the list of needs for businesses that we work with.

Accountants have a key role in guiding clients through change to achieve their goals. We aim to unlock the optimism, despite the economic and political uncertainties. Engaging with clients to explore new opportunities and innovation is vital to unlock economic growth and support their ambitions, whilst also mitigating risk.

Verdict: Clients have exciting plans but labour shortages, wage inflation, supply chain issues and government uncertainty are leaving them cautious.

Clients are anxious but many are taking a wait-and-see approach

Kevin Fitzgerald, chartered accountant and UK MD, Employment Hero

There’s a fair bit of anxiety among our clients who are predominantly SMEs. It’s natural to feel anxiety when there’s a change in government because a lot of businesses are going to be thinking: what’s going to happen next? How will policy change impact me? What will the financial cost be to my business? It could be a policy change, regulatory change or a withdrawal of funding or investment.

Cash flow is the lifeblood of SMEs in particular, so any changes are likely to cause a lot of stress, particularly when regulatory and legal changes can be so complex and difficult to interpret.

We recently surveyed our clients who typically employ between 20-500 staff. One-third said they were worried about the upcoming general election, a bigger number said they feared new policies would disrupt business models, and 26% are concerned about regulatory hurdles and complexities.

Despite these concerns, SMEs remain objective when it comes to the next government fixing or addressing issues. They know it’s going to take time before any economic improvements are felt, so it’s more about when can the government fix these things rather than if they can.

There’s a hope, too, among many of our SME clients that the government will provide more funding opportunities for small businesses as that’s desperately needed.

So for many, it’s going to be a wait and see approach.

Verdict: Clients are anxious about the outlook and potential changes but many are taking a wait and see approach.

Short-term optimism runs alongside long-term apathy

Jamie Skelding, Director, Prime Accountants

Among our clients, the mood is reasonably optimistic in the short term ability to trade well, but much more pessimistic in the long term.

The feeling is generally that whoever wins the election is going to have a huge job on their hands. There’s apathy about the problems which need sorting out and a feeling they run too deep to be solved quickly.

Inflation coming down has been helpful, and the energy price cap is a big factor for businesses. There is the looming tax burden some fear if Labour win, however we are expecting that to be capital tax based, which is offsetting the longer-term pessimism.

The main concerns we’re hearing are mainly around the lack of certainty. Interest rates seem to be going the right way, but there are elections across the world at the moment so the uncertainty is wider than the UK alone.

However, in professional services, change is always an opportunity. People will seek out more advice in an environment of change than they will when there’s a fairly straight road ahead. It’s a good opportunity to help clients navigate their way through it.

Verdict: There’s short-term optimism but long-term apathy about business and economic challenges – many feel they run too deeply to be solved quickly.

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Take your presentation skills to the next level

Posted by & filed under Members, Presenting.

Even the most experienced public speaker can improve their delivery in person and virtually by using the 5 Ps and Bridging techniques.

Early in your career the thought of standing up in front of colleagues, clients or at an industry event would lead to sweaty palms and an accelerated heart rate as the nerves kick in.

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Presenting gets easier with practice as you learn to control your nerves and remind yourself that you’re an expert on the subject you’re talking about.

During the pandemic, many executives lost their confidence around face-to-face presenting as everything moved online. Virtual presenting has its pros and cons but it is arguably even harder to read the room and be engaging.

This article looks at some advanced skills for in-person and virtual presenting that can help accountants reach their objectives when public speaking by delivering information in a confident and powerful way.

Who is in the room?

Whether you are presenting online or in person, you need to ensure that your slide deck and the information you share is relevant to the people who are investing their time listening to you.

Are you presenting to an internal or an external audience, what is their level of knowledge of the topic, do you need to recap for some people in the room and are you likely to get tricky questions at the end because the audience is particularly knowledgeable?

“You have to prepare your presentation with a ‘why do my audience care about what I am saying’ or a ‘what’s in it for them’ perspective,” says Lucy Morgans, Creative Director at soft skills experts Hendrix Training. “You need to be able to change your presentation and slide deck to suit the audience. Maybe the order of slides needs to change or some slides removed and replaced to be more relevant. If online, maybe add a video to keep people interested.”

Don’t let your body language let you down

Your presentation doesn’t start when you open your mouth or show your first slide. It begins the moment you enter the room or greet people on Teams.

Your audience will be making judgements about you before you speak. When you enter are you looking shy, confident, nervous or in a bad mood?

Presentation trainer Karen Bartholomew says body language shapes initial and final impressions when someone is presenting at work.

“We say more with our bodies than our actual words, and it determines our engagement before we even say a single word,” she says. “Body language reflects our thinking, so a strong mindset is part of generating open and confident impressions. We also need to be ‘present’ and actively listen, being fully aware of our posture, gestures and eye contact. All these contribute to positive first impressions.”

You should walk into a room or to the podium in a neutral way and be confident and professional. Centre yourself with your feet shoulder width apart and stand tall. Imagine a piece of string at the back of your head gently pulling you up, and roots in your feet keeping you steady on the ground. This will help your posture.

Make eye contact with everyone but do not linger on one audience member as this will make them, and you, feel uncomfortable.

Using your voice to best effect

A neutral posture can help unlock your voice and improve how you sound to your audience.

“It allows more breath into the body and enriches the vocal resonance. Small adjustments centre your mind and body and aid a good breathing technique providing vocal support. Posture also affects articulation and clarity and increases confidence in your delivery,” says presentation trainer Karen Bartholomew.

In the acting world, there is what is known as the 5 P’s which can help accountants become more polished presenters.

Pace: Are you speaking too fast or too slow? Are you racing over important points or statistics because you are nervous? If you have a strong accent or English is not the first language for all of your audience, you may need to slow down.

Pausing: Using a pause can add power to your presentation and help to retain the audience’s attention. Take a two-second pause after you say something very important to let it land in the room. Or pause before you make a big announcement to build suspense. Also use pauses in normal speech if you feel you speak too quickly.

Projection: Can everyone in the room hear you? Are you projecting correctly for the size of the room? There are few things more likely to knock your confidence than someone at the back shouting that they cannot hear you.

Power: Don’t be afraid to accentuate and stress certain key words. These might be words linked to your main messages around ‘innovation’ or ‘growth’. Think about which words would be underlined or in bold if you were writing out your presentation.

Pitch: Think about how high or low your voice is, and how it’s impacting your communication and credibility. It is easy for your pitch to falter during the Q&A section if you are feeling uncomfortable. If this happens, remember to take a deep breath into your diaphragm.

How breathing techniques can calm your nerves

Even the most seasoned presenter can feel nervous before making a speech, especially if the audience is an important client or senior colleague.

Proper breath control helps the voice to work more efficiently, it keeps the heart rate even and brings a sense of calm and connection to our bodies.

People who present regularly should work on taking breaths from the diaphragm rather than the lungs. When people get nervous and panicky, they tend to become short of breath. This affects their voice and throat as they struggle to speak effectively and clearly.

To find your diaphragm, put your thumb on your last rib and place your hands on the bottom of your stomach. If you are breathing correctly your shoulders will not move up and down.

“The diaphragm acts like a set of bellows and it is how we breathe when we are born. Watch how a newborn baby’s stomach, rather than their shoulders, goes up and down as they lie on their back asleep,” says Hendrix Training’s creative director Lucy Morgans. “Learners can practise breathing in to their diaphragm and then slowly releasing their breath to counts of 10, then 15 and then 20. This will help them to feel much calmer before and during public speaking, rather than running out of air due to nerves.”

Improve your storytelling

Your audience does not want to watch a boring presentation.

Even a subject you might consider to be relatively dry can be brought to life with some thought during your preparation.

The content of a good presentation does not just talk about ‘what’ is happening or ‘what’ needs to happen. It focuses more on the ‘why’ and the ‘how’.

Thinking about a presentation in this way makes it easier to produce entertaining slides and to talk about real-life examples and consequences.

Think about using more pictures in your slide deck and telling a story around one or two pictures rather than using too much text.

Accountancy has many good stories to tell around helping businesses and finding solutions. Think about case studies (even anonymous ones) that allow you to share experiences and more easily convey your messages. Your examples are your rocks you can cling to during a presentation if you sense your audience is a bit lost on the topic.

Handling tricky questions during the Q&A

The Q&A section is where things can go wrong. You may be polished and confident during your presentation but if you cannot answer a question at the end, that can be the audience’s final memory.

There is an advanced technique used in media interviews which work very well during presentation Q&A’s. It is called Bridging, where you move a negative question onto a positive answer. It is a simple A, B, C, D and E communication technique that requires some practice but which most of us use every day.

A: Don’t avoid the question, but at least Acknowledge that it has been asked. “That’s an interesting way of looking at it…” or “I can see why you might think that…”

B: Use a verbal Bridge to get yourself onto more comfortable ground. “But that is not what we are seeing..” or “However, when you look at how the company has responded in this area…”

C: Communicate one of your positive messages from earlier in your presentation. “We are investing significant sums in this area…”

D: To really convince your audience and be credible you need to Develop your answer.

E: You do this by using an Example which illustrates to your audience that you have actually done what you say. “For example, we have invested extensively in employee training in cybersecurity at work in the past six months and all our staff will have been on the training by the end of the year…”

The Bridging technique helps you to stay in control and remain confident until the very end of your presentation.

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AAT’s view of what party manifesto promises mean for the economy

Posted by & filed under Members, Prompt payment.

What we can take away from what’s included, and what’s missing.

With the General Election little over a week away, the parties are in last-minute campaign mode, with politicians racing across the country desperate to persuade the unpersuaded.

For many voters, the decision will already be made. But for others, where to put their X is still up in the air. For those in the accountancy profession, the last few weeks will have offered some insight into what to expect from the two biggest parties. The Conservatives and Labour both published manifestos to the usual fanfare, followed by the customary opposition attacks on both the plans and – most importantly – where the money was coming from.

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Tax revenues are the main source of government spending, and the respective parties’ tax plans have been scrutinised ad infinitum, and indeed tax policy has served as a key battleground issue. But experience suggests that short-term tax policy and long-term tax reform can never be truly discerned from a few paragraphs in a manifesto; so attempting to analyse that many-headed beast at this point seems pointless. Better then to adopt a watching brief as the next Chancellor rolls out their vision for the UK’s tax policy in the coming months and years.

A different lens

Perhaps a more useful vantage point comes from looking at the parties’ plans for smaller businesses. As a quick reminder, there were 5.5 million small or medium-sized businesses (SMEs) in the UK in 2023, representing over 99% of the business population. SMEs are businesses employing 0-249 people, including sole traders. SMEs accounted for 61% of UK employment and 7% of business turnover.

Supporting the health and growth of smaller businesses makes both political sense – it’s popular – and delivers economic benefits, particularly at a time where public spending is squeezed. So, it’s no surprise that the Conservative manifesto trumpets its commitment to SMEs, saying “Small and medium-sized businesses are the lifeblood of our economy and we are making the UK the best place in the world to start or grow a business.”

Similarly, Labour extol the virtues of small and growing businesses, and say, “That is why, in partnership, Labour has developed a plan for small businesses – the lifeblood of communities and high streets across the country.”

Beyond the platitudes, there are some clues as to actual policy. Labour says it will focus on easing cash flow pressures on smaller business brought on by late payment. It will also remove barriers to finance, support exports, and make it easier for SMEs to access capital and to give them greater access to government contracts. Meanwhile the Conservatives have made improving access to finance a key pledge, along with creating Regional Mutual Banks and promoting the usage of digital invoicing.

Drawing the road map

From an AAT perspective, these promises give us a good sense of the parties’ priorities for smaller business, and are encouraging in their focus. Take late payments: the Prompt Payment Code (PPC), introduced in 2008, was designed to ease the pressure on SMEs by enforcing fair payment terms across the supply chain. In 2022 SMEs were owed on average an estimated £22k in late payments. This is a barrier to growth with small business owners and managers spending a disproportionate amount of time chasing payments, and has an impact on cash flow and can cause good firms to struggle.  

Given that research conducted by the FSB throughout 2022 found that on average, 52% of small businesses experienced late payments and 25% reported an increase in late payments, this is a significant problem.

Labour has recognised this in its plan, and the manifesto states specifically that it will ‘take action’ on late payments to ensure that small businesses and the self-employed are paid on time. Similarly, the Tories have highlighted late payment as a pain point for small businesses, and have promised enhanced powers for the Small Business Commissioner (OSBC) to tackle it.

Both of these promises echo the AAT’s consistent campaigning on this issue – we have long called for the PPC to be compulsory for any organisation employing 250 or more staff and for the powers, scope and awareness of the Small Business Commissioner to be expanded and strengthened.

In practice, we have said that requires empowering the OSBC to undertake investigations and draft reports as well as the teeth to impose financial penalties on businesses who persistently pay more than 95% of their invoices in more than 30 days. And it also requires a more concerted effort to engage with larger companies on the need to support their suppliers with prompt payment.

Where the rubber hits the road

Both parties mention the phrase ‘access to finance’ in their manifestos, but fail to adequately explain what they plan to do about it. Recent insight from the British Chambers of Commerce indicated that 49% of the businesses it surveyed who accessed finance considered that it had become more challenging to access funding over the last three years, with only 13% saying it had become easier. Without a commitment to open the books on this, address the key issues (de-banking is a growing problem facing the SME sector) and to regulate how banks operate in this area more closely, it’s hard to see how either party will create genuine change.

However, while it is always worth scrutinising what appears in the various manifestos, we can gather a lot from what doesn’t appear. Take skills: it’s one of the knottiest problems to unravel – how to create, maintain and reward a skilled workforce ready to take the country into the next few decades, where both digital and technical skills will be in great demand. A recent government report estimated the cost to the UK economy of the digital skills gap is £63bn per year, with 6.8m people in the UK having “ultra-low” digital skills. 

Neither party has mentioned much on this topic. While some deride politicians for the ‘vision thing’ as putting style over substance, the lack of a joined-up, inspiring and coherent skills policy for the next decade is hard to miss. That is disappointing. If the government can measure the digital skills gap so accurately, is it not fair to ask why it (or the party that wishes to replace it) cannot put similar resources into plugging it? and where is the focus on financial literacy? If the nation faces tougher times to come, then empowering the generation to understand how budget, save, invest and plan must be a priority.

Ultimately, as voters, all of us have to balance out our own priorities with those of the politicians asking for our votes. What we decide will have a significant impact on the future of the country.

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How integrated app stacks are helping practices thrive

Posted by & filed under Members.

This content is brought to you by Xero.

It’s hard to believe that cloud-based software for accountants and bookkeepers hasn’t been around forever. Judging by practices’ proficiency, you’d be mistaken for thinking this software was always the norm.

Now, we’re entering an era of customisation. Instead of practices bending to make the technology work, cloud-based software is becoming more customisable, adaptable, and flexible for teams and clients alike. It’s a whole ecosystem that you can use to power your practice. Much of this is thanks to app stacks.

As we discovered in our latest piece of research, ‘Leveraging the app advantage’, the practices using apps with Xero save time, are more productive, and see more revenue, profit, and client base growth. Here, we share how you can apply this research and start building an app stack that works hard for your practice and clients.

Benefits are abundant for app stack users

If you’re new to app stacks, they’re a collection of tools that connect or ‘stack’ together to form a complete system. Instead of using standalone tools, you can link up separate software and apps so that data flows between them and processes and tasks are automated or simplified.

An example from the Xero app library is Dext Prepare. Your clients can use Dext Prepare to snap a photo of their receipts or bills, and email it directly to their Xero organisation for you to match and code.

Right now, we’re seeing practices use apps in two different ways: for managing the practice and managing client services:

  • Managing the practice involves tasks like scheduling work, handling client comms, and dealing with sales and marketing. We’re seeing practices choose apps that cover invoicing, document management, and maintaining client details. And they’re reporting saving time on manual daily tasks and increasing practice productivity as a result.
  • Managing client services covers bookkeeping, compliance, and advisory – tasks like bank reconciliation, filing tax returns, and creating forecasts and budgets. The most commonly used apps in these categories are for recordkeeping, billing and payments, and payroll.

You don’t need heaps of apps to see an impact. The smallest practices use an average of three, and the average number of benefits experienced per app is eight. Just adding one app to lift the administrative burden on your team could make all the difference.

When practices choose apps, their clients are rewarded too. According to our research, clients using apps with Xero save time on manual daily tasks, operate more effectively, and work more efficiently with their advisors.

Aside from saving time on daily tasks, there’s a clear commercial case for apps. We compared revenue and profit for practices using apps with Xero versus those that don’t, and discovered those using apps are more likely to experience revenue and profit growth. For those who achieved this growth, 24% attributed it specifically to apps that integrate with Xero.

App advisory

So much of the value accountants and bookkeepers provide is through advisory. Getting to know a client’s business exceptionally well, combining this with expertise and hard-won experience, and delivering the right guidance at the right time will always have a place in accounting.

With the growth of app stacks and the digitalisation of business, many of your clients will be curious about how they can make technology work for them. Practices offering app advisory can tap into this need and provide a vital billable service. Our research also shows practices offering app advisory have much to gain: they add more clients to their roster than those that don’t provide app advisory.

The ingredients for an effective app stack strategy

It all starts with your accounting software – this is your hub, and every app you use should integrate neatly with it. Your hub provides most of the functionality, so you don’t need to add apps for every single task, just a curated few that meet your practice and client needs.

It’s helpful to think about apps in the context of your client journey. Services look different from practice to practice, but you’ll likely recognise these tasks and processes:

  • Onboarding
  • Data capture
  • Document management
  • Invoicing
  • Payments

Start with one of the regular processes in your practice, and consider how it can be improved or developed using apps. Perhaps your onboarding process is slow, and requires lots of back and forth between your team and clients. In this case, you could try a tool that offers proposal templates and automates contracts so that once they’re signed, client information automatically flows into your accounting software.

You can also build your app stack based on practice pain points, client needs, or opportunities for growth. You could replace that niggly document management system that takes up desktop storage, or choose an analytic tool that gives you deeper insights for client advisory.

It’s worth considering the impact of legislative and industry change, too. As MTD for IT comes into place, digitising document capture could help you and your clients with compliance. And as late payments continue to be an issue for small businesses, your clients might appreciate swifter billing with digital payment options.

Whichever apps make sense for your stack, we recommend adding one at a time. The idea is a curated stack, not an overflowing one. Test it with your team and clients before adding something new. Because it’s not the number of apps that makes the biggest difference, it’s how well you’ve integrated them.

What appstacks tell us about the future of accounting tech

Our research confirms that adding apps to your accounting software can have a huge impact on your practice and clients. You can all expect to save time, increase productivity, and work more effectively together.

Practices using apps see more revenue and profit, and add more clients to their books. But even if growth isn’t your goal, apps can help you continue servicing your clients to a high standard. As technology becomes more deeply embedded into practice and client processes, being able to offer app advisory and support your clients with tech decisions is becoming a sought-after skill.

The practices we surveyed plan to continue adding apps for more functionality. But you can start seeing the benefits of these integrated tools with a single app. Check out Xero’s full report today.

This content is brought to you by Xero.