How do you get motivated when you study by distance? Posted 10/13/2021 by The content team & filed under Students. If work or personal commitments make classroom learning difficult, then studying remotely is a fantastic way to achieve your AAT qualifications. Here’s how to get motivated and make a success of it… Today, increasing numbers of AAT learners are watching webinars and lectures away from the classroom, whether it’s at their kitchen table, at their home office, or even in a local park. Appreciate the flexibility It’s a flexible way of studying that works for those AAT students juggling other commitments, such as full-time jobs, looking after children, or caring duties. Classroom learning would also be impractical for Sam Cosgrove, who at the time of writing is a fourth-top scorer in the Scottish Premiership. “Football is not your average nine-to-five job,” he says. “There’s lots of waiting around. You could come home after training and play PlayStation, or do something productive with that time. If I get a couple of hours to focus, it’s good.” One of the biggest draws of AAT remote learning is that students sit assessments on a date convenient for them – these take place at an AAT-approved assessment venue, rather than at home. Remote invigilation for selected AAT assessments Assessments can be taken at any time and most are available for scheduling every day, allowing real flexibility when completing your AAT qualifications. Find out more Avoid interruption Balancing studying with other commitments isn’t easy, though. “If there’s nobody pushing you like a tutor or deadlines, you can become complacent,” says Sam. Distance learning requires ironclad self-discipline. If anybody knows about being motivated, it’s 47-year-old Maria. At the start of 2019, she was a Level 1 AAT student with a hare-brained plan: “I wanted to finish all four AAT levels within one year. My tutors thought the idea was crazy, but still supported me.” Level 2 was done-and-dusted within five weeks, while she passed Level 4 in January this year. To achieve this, Maria made big sacrifices in her personal life. “I would get up at 4.00 am most mornings to squeeze in three to four hours of studying before work,” she recalls. “For exams, I’d wake up at 3.00 am.” Avoiding interruption is key. When she’s not getting-to-grips with cost-benefit analysis on the Central Line, Maria retreats to a local library because “if I study at home, I often end up doing housework”. Make use of technology For some students, distance learning is less about flexibility, and more about cost – it doesn’t involve traveling to college. It’s also little surprise, perhaps, that the rise in distance learning at universities has coincided with a hike in university tuition fees. This rise in distance learning has also been enabled by the tech revolution. AAT’s distance learning courses involve a range of innovative teaching materials that enrich learning, such as webinars, e-seminars, video lectures, and Skype chats with tutors. Overcome alienation Using your living room as a lecture hall has its drawbacks – namely a lack of face-to-face interaction. “You can feel a little lonely,” says Cristina, who studied AAT levels 1−3 in the classroom. “I missed interacting with other students, plus I couldn’t discuss any doubts with the teacher immediately.” Indeed, working from home can be an alienating experience– research by Utah’s Brigham Young University showed that lack of social interaction can affect health as badly as smoking up to 15 cigarettes a day. Sharon, who suffers from anxiety, found an AAT webinar on mental health useful, along with AAT’s Facebook forums, which enabled her to feel part of a community. “Ever since I found these forums, I feel more connected to other distance learning students out there,” she says. “If I’m stuck on a question, I simply ask somebody in that group – there’s always somebody to answer it.” Ultimately though, the most effective method for resisting the distractions of home-working is reminding yourself why you’re studying in the first place. Five ways to motivate yourself 1 Create a study timetable “I make monthly, weekly and daily plans,” says Maria. “These timetables show me any slots I might have free, such as 6.00-7.00pm, which I could then dedicate to studying.” 2 Don’t procrastinate “It’s easy to think that if your exam is a month or two away, you can put off studying,” says Maria. “But the best thing is to get stuck in now. The longer you wait, the more demotivated you’ll become.” 3 Download an internet restriction app Try rationing time online by only checking email or social media once every couple of hours. You could also try an internet restriction app, such as Freedom or Anti Social, which allows users to block the internet for a set period of time. 4 Get family and friends onside Distance learning can place stress upon partners and family members. “When I started AAT, I spent everysingle spare minute studying,” recalls Cristina. “My partner complained and our relationship started to suffer. We were on the edge of splitting up, but when I explained it could lead to a job in finance, he understood.” 5 Make time for you “Even though I would wake up at 4.00 am, I still ensured I got eight hours’ sleep,” says Maria. “It’s important to rest and enjoy life, so make sure you see friends and family at weekends.” Remote invigilation for selected AAT assessments Assessments can be taken at any time and most are available for scheduling every day, allowing real flexibility when completing your AAT qualifications. Find out more Further reading: The new AAT Lifelong Learning Portal has been launchedStart exploring the AAT Learning Portal todayHow to keep what you’ve learned and carry on
How to critically reflect on your studies Posted 10/12/2021 by The content team & filed under Students. Critical reflection (also known as reflective practice) is a process undertaken by skilled professionals in a variety of industries. The concept itself can be as detailed as required, but the fundamental principles behind it focus on the ability to identify, question and assess our current understanding, beliefs and knowledge to align these with our goals and aspirations. Why is critical reflection relevant? As a student, you will aim to gather as much information as possible from a variety of sources to help you throughout your studies – this includes tutor support, peer-to-peer support, and a wide variety of books and online content (amongst other things). All of this information is of great benefit to you, but there is a hugely important source of information that is often overlooked and ignored – yourself! A heightened sense of self awareness is a considerable contributor to your overall effectiveness in studies, revision, and exam attempts. Applying critical reflection allows you to identify and address multiple aspects of your studies, such as identifying areas of strength, areas of weakness, and even the most effective ways in which you learn, providing valuable confidence and motivation to tackle your targets. What to do and what to avoid Critical reflection can be relatively easy to perform, but requires tuning to your individual needs to yield the greatest benefits. In general, however, there are traits and processes a good reflector should aim to do, and avoid. A good critical reflector: Reflects objectively. Try to focus on yourself and your studies without bias or prior conceptions altering your judgement.Focuses on their strengths as much as their weaknesses. Focusing on the negatives alone can erode confidence and self-belief – make sure you identify what you are good at, as this in turn also allows you to apportion your time on areas that require further development.Is not “looking for faults”. A good reflector understands that when they identify areas that require additional development, they are not doing so with the assumption their efforts up until that stage are not good enough, rather they simply require more focus and support.Continues to reflect. The beauty of critical reflection is that once the ball is rolling, you can constantly evaluate the steps you are taking and alter them as you gain a better understanding of your objectives, and yourself.Wants more, for the right reasons. Linking with the point above, a good reflector does not lose sight of the concepts behind the process and understands that while they continue to set new goals and objectives as they develop, they also acknowledge their efforts and skills to reach that stage alone – completed goals do not become irrelevant as soon as we set new ones. A poor critical reflector: Sees the glass half empty. It can be easy to focus only on what is going wrong without understanding what was also done correctly along the way. This in turn can create a precarious situation in which the process becomes less “reflection” and more “critical”.Aims for perfection. A considerable mistake made by reflectors is the idea that you are striving for perfection – this is not the case and can cause more harm than good. The prospect of continually developing should be the goal. Nobody is perfect and critical reflection is not a tool for achieving it!Rejects change. Sometimes, a change to your targets or plans is simply beyond your control. A poor reflector chooses not to react to these changes, instead ignoring them and electing to pursue their original goals. This creates a crisis in confidence if the original goals are then not met. How to reflect critically To help you get the ball rolling with the ideas behind critical reflection, a great place to start is by looking at the written questions on the synoptic assessment. To do this, you simply need a practice assessment from AAT or your training provider and access to the model answers. Complete your written questions as normal and do not peek at the answers!Compare your work against the model answers. Award your marks fairly and in line with the requirements of the question.It’s time to do some critical reflection. Look over the work you have done and make a note of where you gained marks and how you did so. Then take note of areas that you touched on in your answer, but did not meet every point. Finally, of course, focus on areas that you may have missed in your answer. Can you identify to yourself why you missed them?Make an action plan based on your feedback. Is there a topic you need to revisit? Or perhaps there is a common occurrence in your answers that you need to address?Share your findings with your tutor or mentor. To become a better reflector, always share your findings with a professional who can offer guidance and additional support. See if your tutor or mentor agrees with how you scored yourself, and if not, discuss why. Key takeaways: Critical reflection focuses on the ability to identify, question and assess our current understanding, beliefs and knowledge to align these with our goals and aspirations.Applying critical reflection allows you to identify and address multiple aspects of your studies, such as identifying areas of strength, areas of weakness, and even the most effective ways in which you learn, providing valuable confidence and motivation to tackle your targets. Further reading: How to consolidate your learning to memory10 things to help you develop and recall your synoptic skillsHow to keep what you’ve learned and carry on
Modern roles – is Finance Business Partner for you? Posted 10/11/2021 by AAT Comment & filed under Career profiles, In business. As the industry changes, traditional accounting roles are transforming alongside it. We look at the types of roles that are emerging in the modern accounting industry. Video series: how to become a finance business partner This AAT video learning series will teach you how to marry the powerful skills of finance business partnering with digital technology to advance your career. (Free of charge to members.) Get the series What a finance business partner does “Finance business partners are part or fully qualified accountants who improve the impact and understanding of financial reporting on business reporting,” says Kathryn Heeler, a consultant at recruitment firm Sellick Partnership. “They work closely with a business unit to create a partnership between operations and management and provide ‘real-time’ support and analysis to assist with business decisions. Depending on the organisation, they can report to the senior finance business partner, finance manager or head of business support.” Fast facts Salary range of £35,000 to £60,000Provide support and analysis to assist with business decisionsWork within a larger organisationExcellent stakeholder management and presentation skills required Typical responsibilities Financial management – including the month-end and year-end processes in-line with company deadlines and financial procedures.Investigating and reporting on significant budgetary variances, analysing the month-end financial position and looking into any variances.Producing monthly financial reporting and meeting with budget holders to assess financial performance, and providing financial management information.Year-end and financial planning – supporting year-end financial management and reporting, including assisting with the completion of annual accounts and the preparation of future year budgets.Analysing the impact of service changes and providing the cost implications of service redesign, adjusting budgets in accordance with changes in service provision if necessary, and working with senior managers and service leads to prepare business cases and bids for new business and/or service redesign. Skills required for the role A finance business partner should be able to influence day-to-day decisions, as well as being a translator between finance and operations. Heeler says: “They should have strong stakeholder management and presentation skills,” she says. “A person in this role should be commercially aware, with an ability to understand and anticipate the needs of both operations and the management of an organisation.” Earning potential Depending on the size of the business and experience of the candidate, Heeler says companies will likely pay between £35,000 and £60,000 per annum. Sharpen Your Tax Skills 2021 online Stay on top of current and future tax changes with expert help and in-depth analysis from our live virtual mastercourses, places available on 24 and 26 November and 6 December. Book now Where you can find a finance business partner role “Finance business partners tend to be needed within larger organisations where departments aren’t able to successfully develop strategies and carry out suitable analysis to determine business needs,” says Heeler. “In smaller organisations, the most senior finance professionals will have business partnering incorporated into their role.”
5 future-proof steps to listen to clients (and get results) Posted 10/11/2021 by AAT Comment & filed under Members. Personal client relationships have always been at the heart of an accounting firm’s success. But remote working has changed the game – starting with how to listen to customers, writes Paul Roberts. The pandemic magnified the importance of listening and responding to client needs and expectations. Those who could do this quickly gained a competitive advantage. Now the challenge has evolved. How do you continue making sense of the growing volume of client feedback, without the process becoming overwhelming? This article shares 5 simple tips that all firms can try out today. Sharpen Your Tax Skills 2021 online Stay on top of current and future tax changes with expert help and in-depth analysis from our live virtual mastercourses, places available on 24 and 26 November and 6 December. Book now Forward-looking businesses are moving on from traditional customer feedback processes. Sporadic research and annual surveys are being replaced by an ‘always-on’ model of customer feedback. This provides fresh and relevant insights that are always available to decision-makers. But, this isn’t as complicated or expensive as it sounds. In fact, you can take great strides using the tools and people you have today. 5 tips for future-proof client listening: 1. Always be listening Traditionally, formal feedback has only been collected at the end of a client project. While this provides a valuable snapshot, actionable intelligence is being missed. That’s because feedback provides the richest insights when it’s fresh. For example, the best time to ask about how clients found your firm, is at the start of the engagement. The best time to ask about how you can improve their experience is when you still have time to change things. Always be listening, means collecting feedback across the whole client journey. This doesn’t mean sending lots of surveys. It means consistently asking 1 or 2 questions at different touchpoints. For example: While onboarding a new client – “what was it that made you choose us?” When a project starts – “what would a great experience look like to you?” Halfway through a project – “how are we doing?” You are probably asking these questions already. Future-proof client listening means asking all your clients and recording the responses. 2. Ask open questions As you already know, the best way to understand your client’s perspective is to ask open questions. The same is true when collecting feedback. Open questions give people the space to share what’s on their minds. In contrast, multiple-choice questions limit the responses to what’s on the firm’s mind. While this makes the data easier to analyse, the simplicity comes at a price. By limiting responses, closed questions create blind spots. If your existing survey reports are greeted by “we already knew that” or “so what”, then you’re probably asking too many closed questions. A good rule is to: Use multi-choice questions to collect facts.Use rating questions to measure experiences.Use open questions to discover the ‘why’ behind the ratings. My two favourite questions are simply: “what are we doing well, and what could we do better?” Future-proof client listening means avoiding assumptions. This comes from asking open questions that reveal client experiences in their own words. 3. Centralise your feedback data Clients are willing to share more feedback in more places than ever before. As well as surveys and interviews, they’re sharing online reviews, verbal comments, and complaints. This isn’t just personal clients. Corporate clients are also getting used to rating services and writing reviews. Most likely your feedback data is ending up in different places, which makes it hard to analyse. Our recent survey across professional services revealed that feedback is most likely to be stored in individual documents, people’s heads, notebooks, and email inboxes. To be able to spot emerging themes, root causes and new testimonials, you need all your feedback in one place. To start with this could be a shared folder or a shared spreadsheet. Somewhere that everyone can save relevant documents, research, and anecdotal feedback. We’ve also heard of firms sharing client feedback through Teams or Slack channels. Future-proof client listening means having a single source of truth. One central place where everyone goes to find client feedback. 4. Include your employees’ view Accounting is a people business, and your people have a crucial role to play in client experience. As a result, they have a different perspective on client experiences that often gets overlooked. Specifically, your people have two valuable views: Inside-out view: your people get to see the experiences that your clients are having. They will be noticing what instructions and information they need to repeat, what confuses clients and what brings them joy. Outside-in view: your people will also be seeing how your processes, policies, and culture impact client experience. They see what works well, what could be improved and how those changes would benefit clients and the firm. Collecting these staff views doesn’t require more surveys, and it’s not about traditional suggestion boxes. Instead, give people a simple and consistent place to share what they’re seeing. This could be a shared spreadsheet or dedicated Teams/Slack channel. If something more private is required, create a simple capture form on your intranet. Future-proof client listening means collecting all client-related feedback. This includes feedback from clients, employees, and your wider networks. 5. Close the loop Having collected, analysed, and summarised your client-related feedback, it’s time to close the loop. Report back to clients and employees about what you’ve heard and what you’re doing in response. For your clients, this could be creating a regular section in your client newsletter that has a ‘you said’, ‘we did’ table. This consistent transparency has two important benefits. It shows the clients who are sharing feedback, that you are genuinely listening. It also shows the other clients that their peers are sharing feedback and getting a response. Both benefits build trust and improve future response rates. Secondly, you must close the loop with employees. Share what you’ve heard from them and your clients, what you’re planning to do about it and how it may impact them. Also, take the opportunity to celebrate success. Make sharing and collecting feedback a positive experience, by highlighting examples of great client experiences. Some of our more client-centric firms even have quarterly awards for staff who get the best customer or peer feedback. Future-proof client listening means closing the loop with both clients and employees. This builds trust, drives up future response rates and creates a platform for celebrating success. Summary – from disconnected data to shared feedback intelligence Forward-looking accounting firms are developing feedback intelligence by adopting an ‘always-on’ client listening process. This enables them to reduce decision-making blind spots by hearing from more clients, more often. To start realising these benefits, your firm can adopt 5 principles today: Always be listening.Ask open questions.Centralise the data.Include your employees view.Close the loop. About the author Paul Roberts is CEO & co-founder of MyCustomerLens.
Why digital skills are career-critical for everyone, from the CFO down Posted 10/11/2021 by AAT Comment & filed under Career, Digital skills, Members in business. The times (and technologies) are changing. So too must finance directors, says David Carrick, CFO of Apex. A decade ago, financial teams and their directors stuck to the numbers. Those days are over. Today, in addition to budgets and accounting, finance teams must work closely with other departments to manage the impact of digital disruption and technological evolution, balance innovation with operational effectiveness, and make data analytics a key priority for their organisations. This expansion of responsibilities – and the requisite skills – began before the coronavirus pandemic. But the Covid-19 crisis, with its accelerated push for digitisation due to remote work, sped up the transformation that many finance departments and their respective leaders are undergoing. What do these changes mean exactly for finance teams, their directors, companies, and operations in the future? If they can rise to the occasion, they will have opportunities to play key roles in shaping increased collaboration, greater efficiency, and heightened growth throughout their respective industries. Video series: how to become a finance business partner This AAT video learning series will teach you how to marry the powerful skills of finance business partnering with digital technology to advance your career. (Free of charge to members.) Get the series From silo operation to active partner Finance directors and select members of their team were stepping out of their departmental silos long before the pandemic thanks to the onset of the digital transformations that began impacting businesses several years ago. Finance departments were already moving toward digitisation, using new technologies to manage the company’s finance and accounting functions more efficiently, and using data to inform strategic decisions on finance, operations, and strategy. The start of the pandemic saw companies scrambling to elevate their digital operations as teams and clients went remote. More than 18 months later, after vaccinations have reopened some offices, many professionals are still working at home or in a hybrid arrangement, and it’s unlikely that work will go back to the pre-pandemic business as usual anytime soon. The changing conditions have compelled finance middle management to become much more digitally literate and to transform how they operate. That’s not just in terms of skills. There is variation between firms in terms of how digitally mature their operations are. There is variation within teams between individuals and layers from the top to new professionals entering finance. Digitally advanced middle management has had the opportunity to gain leadership opportunities, or needed to learn how to manage up when directors are reticent to make leaps forward. Meanwhile, directors have had to gauge how much change their teams can manage all at once. It’s not just remotely accessing data and engaging with it digitally. It’s also contending with the proliferation of applications digitized data enables and prioritizing each, and the learning curve of each. Finance teams have often become the primary overseers of application programming interfaces, blockchain, cloud computing, data analytics and robotic process automation. Their education in accounting practices has been pushed up against information technology trends. Digital foundations These technologies, generate enormous amounts of data, which is translated with the help of artificial intelligence and machine learning tools into more effective, objective insights around financial performance, greater security around the data, and fewer costly mistakes in decision making. And that is the key, to drive toward standards upon which better workflows can sit. Finance directors managing these processes are finding themselves working to achieve common standards across traditional finance functions, promoting open-book approaches to company data, and staying on top of markets, regulatory changes, and risk management issues that might affect them. That’s further driven the need to work across all departments, from sales to acquisitions to human resources to obtain the most representative data that paints the most accurate picture of their enterprises. In other words, technology doesn’t just help financial directors get things done. It is a business enabler that makes directors essential players who work with C-suite leaders to create strategies for growth and business transformation. Among directors-to-be this creates openings for middle managers who have invested in digital skills, potentially taking in courses and conferences beyond those required in the past to advance. These managers can be pulled up into more strategic roles where their digital familiarity can aid leaders with experience, but without a grasp of new technologies coming online. What type of accountant should you be? Take the quiz and find out which area of accountancy suits you best…. Take the quiz Challenges and opportunities All of these changes entail operational and procedural challenges, of course. But I believe this transformational period will create great opportunities as we continue as well, both in terms of operations advantages and career opportunities. Communication provides one example. A few years ago, it was easy to take for granted face-to-face communications with leaders and team members. Now, financial directors must be proactive and flexible with colleagues, especially in their cross-functional communications with other departments. Managers that can build best practices can earn an edge. Collaboration is another issue. Where there were once traditional operational hierarchies are now blurred lines. In this time of transformation, the best finance directors are enablers who can inspire and manage departments that work outside of their silos in the interests of pulling together enterprise-wide strategies and pursuing organisational goals. At the same time, teams can demonstrate merit more visibly to colleagues. Be part of the change For growing businesses, expansion places new demands on the finance functions to be flexible and nimble as they integrate new acquisitions and information technology systems and implement different accounting standards and regulations into their workflows. With financial responsibilities becoming increasingly global, the finance function needs to navigate across different cultures, working practices, languages, and time zones, too. To rise to the occasion, finance directors and their managers have become more technologically savvy, more elastic in assuming new roles and more proactive in upgrading skillsets – all with the goal of better participating in the most important discussions in their companies. The best ones know that the ability to access relevant data and quickly propose solutions will be critical to delivering growth in the years ahead. David Carrick is CFO of Apex Group.
What is the best expenses policy for modern finance teams? Posted 10/11/2021 by Mark Rowland & filed under Members in business. Expense management is a big challenge for finance teams at the moment, particularly when there’s so much pressure on cash flow. Those teams using automated systems fared extremely well during the pandemic, but for those with manual processes, it can be tricky. Businesses face the question: should they cut down expenses to only the most essential things, or let things continue as normal and keep a close eye on things? Our members in business panel share how they manage expenses and if things have changed during the past 18 months. Video series: how to become a finance business partner This AAT video learning series will teach you how to marry the powerful skills of finance business partnering with digital technology to advance your career. (Free of charge to members.) Get the series It’s worth automating the expense process Clare Elliott, CFO, ILUX We automated our expenses process about four years ago, from an original paper-based system to ExpenseIn, which has both an online platform and an app. Our engineers travel country-wide, and as they incur expenses, they simply photocopy the receipt and upload it immediately via the app. We have an approval process, so depending on which team the employee is in will depend on the process for that approval, but generally, it quite simply goes through their line manager. That all gets centralised by our Admin team and processed for payment to the employee. We sometimes re-charge our expenses too, so the Admin team ensure those expenses have been appropriately allocated to the clients’ monthly invoice. Automating the process makes it easy and streamlined, everyone knows the rules, it can all be done remotely by all employees, managers and the Admin team, and everyone knows the status of the approval process. The manager is notified when expenses are awaiting approval, the employee and admin team are notified they have been approved, and the employee is further notified when payment is authorised. Nothing is lost or missed, it keeps everything up to date and charges are reflected through the accounts on time too. Everyone understands what can be expensed, we have a very clear policy on what the company will approve, and what it won’t. By setting the rules, financial limits, standards and expectations, we don’t have a problem with anyone pushing boundaries and asking for excessive expenses to be reimbursed. They also have to stipulate exactly why they have incurred the expense, and we have also automated that by setting up Projects and Categories within the system. Each engineer needs to choose the type and reason for the expense, and that can be validated by the Admin team by cross-referencing that client’s work on that day. We use ticket numbers for this, which follows every single job through the company, so everything can always be cross-referenced easily. We’ve chosen to automate our expenses in this way, rather than giving employees credit cards because it ensures they supply the correct documentation at the outset. They cannot claim for an expense without a vat receipt, so there’s no need for the Admin team to do any chasing at a later date to prove the validity of the expense. It forces the employee to be accountable for their expenses, otherwise, they cannot make a claim. Whilst this works for us, as it ensures the process is dynamic in how expenses are processed, there is still Admin time behind the scenes to validate and check every expense. For example, the vat on each expense must be checked to ensure the correct rate has been chosen at the source. The expenses are exported from ExpenseIn to our accounting system to process for payment, which is now via an API so that’s as efficient as it can be, but they still need to be further categorised within the accounting software, they also need to be re-charged on to invoices (which is a manual process) and the payments processed too. It would be great to further streamline that process to ensure no time is wasted unnecessarily. We do everything manually – I’d like a more rigorous system Farha Jamadar, finance manager, Todd Doors Expense management hasn’t changed much for us, other than ensuring we reconcile soft copies to hard copies. We already had to process expenses electronically as we have different locations across the UK, so processing expenses was already electronic. We do not have a solidified expense system, just a template-produced excel sheet that needs to be submitted fortnightly to coincide with our payment runs and authorised by a director. The system is not automated so it is passed as an email attachment. All expenses are signed off by the directors, the volume is not large so is manageable. Our only issue is late expenses, which can be difficult to manage when it’s a significant amount. We have a company card system, but the credit limits are set to a specific amount so there cannot be an overspend. All receipts are reconciled monthly and signed off by a director. I’d like to see more visibility and authorisation of expenses before it is incurred in the future. If it could all go through a PO system so we can reconcile it, that would be great. The onus is heavily on finance to reconcile expenses and I feel this should be passed to the employees. We tightened up expenses spending during the pandemic Andy Murray, finance lead, Manna Pro UK We took a very proactive approach to expenses during the pandemic as we knew our cost base would be heavily influenced by it, like many other businesses. As an organisation, all travel was put on immediate hold – not just employee level, but executive-level too. We communicated to all colleagues that all expenses that were deemed ‘non-essential’ would not be authorised nor reimbursed if paid personally. One key area which needed to be tightened up was the process control surrounding expenses and therefore we decided to implement a new sign-off procedure. This was to ensure that any expenditure deemed necessary had to be signed off at director-level (where previously it could be approved by a head of department). At the start of the pandemic, the finance team carried out a heavily detailed analysis of our current cost base. Certain budgets were capped to further control cost, but also from a risk perspective, this extra control was deemed vital for expense management. As we have quite a small employee base in the UK our expenses are still handled via a simple Excel spreadsheet. This Excel template includes all of the necessary fields for use by employees when submitting their expense claims. Finance can process them once the form is correctly completed (signed, accompanied by receipts and approved by their line manager or director). These expenses can then be included in the monthly expenses payment run. The expense claims received on a monthly basis are still of a fairly low volume, however as we continue to grow our employee numbers, automation will become a greater consideration, from an efficiency point of view but also to avoid any manual entry and omit any potential errors. Finance is always on hand to offer support to a colleague should assistance be required in completing the expense form. We send out a monthly email to all employees to act as a ‘gentle reminder’ prior to the monthly expense submission deadline to ensure they are submitted in time. Should any expenses be received past the deadline then they are deferred to the next expense payment run (a month later!). The email that is distributed stresses the strict requirement of submitting expenses complete and on time as we want to be sure that all costs are captured in the correct period and of course that employees are reimbursed for any expenditure in a timely manner! The same process is conducted for our corporate credit card programme, employees have to submit an expense form for anything charged to their company card, this then allows the Finance team to reconcile the cards on a monthly basis. In the future, I would like to get away from as many manual processes as possible within the Finance function, i.e. by eliminating the use of Excel spreadsheets for employee expenses. There may be scope to use an app that integrates directly to our ERP Finance system. Therefore automating the expenses process, improving the overall efficiency by streamlining the entire process. Photograph shows Farha Jamadar, finance manager, Todd Doors
Does hourly pricing serve either accountants or clients well? Posted 10/11/2021 by Annie Makoff & filed under Members, Pricing. The timesheet versus value pricing debate has raged across the accountancy sector for decades. In the past, there was the sense that accountants needed to track client time to maintain efficiency and ensure jobs weren’t eating into profit margins. It was also a good way of analysing which clients and services were the most profitable. But as accountants are moving more and more into the business advisory space, timesheets have become – to some – anachronistic. Spending valuable time with a client and getting under the skin of their business is a crucial part of an accountant’s role, as is relationship building and many other ‘soft’ skills. Translating all this into timesheets could therefore give the false impression that the service was running at a loss in some instances. By their very nature, timesheets fail to take into account the intrinsic value accountants bring to their clients and the overall client retention rate. Not everyone agrees, however. Many firms still use timesheets as a way to justify cost and to keep track of employee productivity yet operate a value pricing or a fixed fee model in the main. Others may use timesheets and hourly billing for transactional jobs but use value-based and/or a fixed fee model for advisory/consultancy services. The main pricing and billing models include: Time-based with a set hourly rate.Fixed fee – the client is charged a set cost for a specific service.Value pricing – a fee is agreed prior to service delivery, based on the value a client places on the service.Value billing – the client is charged based on the value the firm places on the service. We asked accountants for their views on timesheets and hourly pricing structures and which pricing model they favoured. Value pricing can have a transformational impact Bob Evans, accountant and business adviser at Robson Laidler For accountancy firms wanting to move away from hourly rates and are considering fixed fee billing, the new model should be approached in an open and collaborative way where both parties accept that fees will be reviewed with experience. For example, if the actual amount of time spent in preparing a set of accounts is less or more than originally anticipated, then the next 12 months of fees will be adjusted accordingly. Similarly, for bookkeeping and payroll charges – there should be more frequent reviews based on monitoring the volume of transactions as they fluctuate up or down. Fixed fee billing has pros and cons: Fixed fees can provide peace of mind of the client as prices are fixed for at least twelve months.Fixed fees can improve cashflow for both clients and firms: firms can collect fees in advance of preparing year-end accounts and tax returns and clients won’t be surprised by one large bill at the end of the year.Fixed fees are an open and honest approach which can be reduced or increased in line with transaction volume and/or complexity. It builds trust between the accountant and their client.However, if the initial estimate of work is wrong, the client may be either over or undercharged. Value pricing on the other hand focuses, unsurprisingly, on value. Ultimately, in the economy, if markets are working as they should, prices are set not by cost-plus-profit but by value. If prices were simply set by cost-plus-profit, no business would ever go bankrupt. But businesses go bankrupt all the time because they don’t produce things people want & they don’t offer value. Next steps: For an accounting firm wanting to implement value pricing, they should hold a ‘value conversation’ with the client to ascertain: What the client is trying to achieveWhat is their end objective. The focus should be on making a transformational impact. The highest point of value is taking a customer from where they are to where they want to be. Verdict: Value pricing can help accountants make a transformational impact on their client’s businesses. Value-based models enables accountants to provide an exceptional service Fiona Westwood, partner, MHA Monahans Timesheets are a brilliant management tool. They help employers keep on top of employee workload and understand the profitability of individual clients. However, they don’t take into account the nuances of everyday working practice. In addition: Timesheets don’t consider whether an individual has gone above and beyond the scope agreed with the client.They don’t show whether work has been turned around quickly. They don’t consider the output of an employee, instead focusing too much on ‘time spent’.They may drive unwanted behaviours: an employee may worry about making an account or client unprofitable so additional time worked may not be charged for or staff may simply stop going above and beyond. Clients can be a considerable hurdle to jump when switching up fee models. If their expectation is that firms charge for time, switching to a model which may be viewed as more ‘arbitrary’ may cause friction. Clients will often ask for summaries of hours spent or rate cards and so on. Next steps: no business has got it exactly right, but there are steps to take to get this change off the ground: Leaders must work together to agree on pricing structures, then train staff to think about fee costs more laterally. Agile thinking and customer awareness are critical in determining pricing David Owens, CEO South West England and Wales, Azets Accounting firms can find themselves wrestling with what they did last week and how to recover time costs – but the industry wants to move to a brave new world of pure value propositions. We require pioneers to make paradigm shifts in business modelling thought. Consumer preferences have also changed, and clients can impact dynamics as they re-evaluate what they need. Therefore, we should ask how strong our relationships are before we determine what price sticks. Next steps: If professional service firms want to resolve practice economic conundrums and move towards smart recoverability, it won’t be enough to transform MI and modelling; agile thinking and customer awareness will be critical. The suitcase of KPIs and old ways are out of date. Instead, we should evolve into a growing ambitious profession, where the future will belong to those most interested in it. The opportunity is to create an industry where the charge out rate features less so and we deliver quality services on the money. Verdict: Agile thinking and customer awareness are critical when it comes to pricing structures. Ensure all team members are on the same page with value-based structures – it will avoid any discrepancies which, if found out by the client, could cause serious issues. Create a pricing ‘menu’ to help standardise certain practices and take the headache out of individual pricing per client.Review rates regularly. Ensure you’re consistently sharing profitability statistics amongst the team, and across the whole firm, focusing in on where margins might be able to be, realistically, increased. Verdict: Value-based structures frees up accountants to focus more on advisory, value-add services rather than focusing on time and budget constraints. Price should be based on value not just time Eunice Onyema, ENO Accounting ENO Accountants has always adopted a fixed price method for our clients. I find that it makes pricing easier and gives clients peace of mind especially as they are mostly small businesses and start-ups. Our prices are fixed based on the value provided to each client and not time-based. It helps me remain competitive even though for some services, the profit margins are small. In order to be profitable, I concentrate on services that provide more value to the client and are not readily available.Next steps: I think accountants should price based on the value that we provide. An hourly pricing structure limits us. We often help with financial projections and growth, not just recording figures, and in that regard, we can be partly responsible for our clients’ success, so we should charge accordingly. Verdict: Hourly pricing structure can be limiting – price should be based on value.
How to address CIS VAT repayment delays? Posted 10/06/2021 by Annie Makoff & filed under Members. HMRC is facing a higher number of repayments under the VAT reverse charge for construction, resulting in some delays. The Construction Industry Scheme (CIS) VAT Domestic Reverse Charge (DRC) has created significant cash flow issues for sub-contractors. In addition, these companies may also be due repayments from HMRC if they have not paid VAT on their sales invoices. The domestic reverse charge for building and construction companies came into force earlier this year and changes the way VAT payments are made for VAT-registered businesses. Known as the Construction Industry Scheme (CIS) VAT Domestic Reverse Charge (DRC), it aims to address tax fraud which has been prevalent in the construction sector. Under the new system which broadly applies to business-to-business transactions and where both parties are VAT-registered, the end-user is now responsible for paying VAT on projects and services directly to HMRC rather than to the supplier. The basics of the scheme are as follows: The supplier is no longer required to account for VAT and cannot therefore include VAT on their invoices.The end user declares VAT on their tax returns as ‘output VAT tax’ and can claim it back as ‘input tax’.This system prevents ‘missing trader fraud’ whereby a supplier or trader ‘disappears’ after receiving payment from the customer along with the VAT. But the new system has created significant cash flow issues for sub-contractors. In addition, these companies may also be due repayments from HMRC if they have not paid VAT on their sales invoices. There have also been reports of delays with VAT repayments from HMRC, creating additional cash flow issues. We spoke to several accountants with clients across the construction and building sector to find out how they’d been affected. Consider moving to monthly VAT returns if a business expects regular HMRC repayments Andrew Norman, VAT Director, Menzies LLP The introduction of the domestic reverse charge has undoubtedly changed cash flow management for businesses. Those that buy-in labour-only services to make onward supplies of construction services have found that they are now in a VAT repayment position. Although HMRC is normally very reliable when it comes to authorising repayments, there’s no doubt that some repayments will be delayed. Next steps: There are several steps businesses can take to mitigate these issues: Submit repayment returns ASAP, especially before due date.Ensure repayment claims are justified with supporting documentation.Businesses receiving regular repayments should consider moving to monthly returns rather than receiving quarterly repayments.Businesses should ensure they know their rights: HMRC has to pay a supplement of 5 per cent if a repayment is not processed within 30 days, unless HMRC has already been in contact.Organisations should also consider their cash flow projections and the timing of large purchases: If a purchase falls at the beginning of a VAT quarter, the business must be able to fund the VAT for four to five months before getting the repayment from HMRC. Verdict: Consider moving to monthly VAT returns if business will require regular HMRC repayments. Ensure contact details on returns is up-to-date with supporting records easily available Sarah Hughes, head of VAT, Haines Watts Birmingham Businesses caught by the introduction of Domestic Reverse Charge Rules now find themselves in a repayment position for VAT. This is resulting in far more enquiries being raised by HMRC before repayments are issued. Repayment delays can have a huge impact on businesses, particularly as payment terms with subcontractors can be quite short and so cash flow is essential. Even where a repayment is authorised by HMRC and they have existing bank details on file, HMRC cannot automatically use these details to issue a repayment. Further delays can then occur with cheques posted out to businesses, which then need to be banked and cleared – it all adds further to the strain on the businesses’ cash flow. Next steps: We are advising clients to submit VAT returns ASAP, ensure HMRC hold up-to-date contact details and that all records are readily available. For businesses previously caught by the Payments on Account regime for VAT, they must remain within the regime until they have agreed a monthly payment revision or are able to leave the scheme. Verdict: Ensure details are up-to-date and supporting documentation is accurate and readily available. Prepare a ‘basket of evidence’ for HMRC if repayments are queried Richard Staunton, partner and VAT expert, Gerald Edelman LLP The new domestic reverse charge rules means that certain businesses will be in a VAT refund position where previously they made payments to HMRC. HMRC may be slow to realise that the status of the business has changed and are likely to stop VAT repayments until they make enquiries. Clearly this can have a devastating effect on cash flow. We generally help our clients prepare a basket of evidence that they can provide to HMRC, so as soon as a repayment return is queried, HMRC receive all the information they need. Delays when VAT returns are queried are normally down to miscommunication which means knowing what HMRC want, and in what format, generally speeds the process up. Next steps: Send VAT returns ASAP – ideally the day after the period end, which is normally at least 5 weeks before the return must be submitted.Businesses who expect to be in repayment positions can apply for monthly returns which will reduce cash flow issues by two thirds.If a large repayment is likely, it is sometimes worth sending the information to HMRC at the same time the return is submitted. This means that if it is rejected the information could be on hand to clear it without a formal enquiry being opened. Verdict: Put together a ‘basket of evidence’ to send to HMRC if repayments are queried. Knowing what HMRC want and need can speed up the process.
Global accountancy bodies come together for net zero Posted 10/06/2021 by AAT Comment & filed under Members in business, Sustainable Business. AAT has joined twelve other professional accountancy bodies from around the world – including AAT, ACCA, ICAEW, ICAS, and the Association of International Certified Professional Accountants – to fight climate change by committing to reach net zero greenhouse gas emissions. The accountancy bodies are part of The Prince of Wales’s Accounting for Sustainability Project (A4S) Accounting Bodies Network. This network represents more than 2.5 million professional accountants and students, who work with businesses and governments in 179 countries. The bodies have committed to reach net zero emissions as soon as possible and will publish plans to do so within the next 12 months and report annually to show progress. The announcement comes as AAT reveals it is moving office and switching to a hybrid working model to reduce its Central London footprint and lower emissions. Accountants are well placed within their organisations and with their clients to drive action on the climate crisis. The bodies have therefore also committed to provide their members with training, support, and resources to help them create their own net zero plans and reduce their emissions. In addition, the bodies have pledged to provide advice to help governments create the policies and infrastructure necessary for transitions to net zero economies. The profession is already at the forefront of helping societies adapt by using accounting practices to help governments adjust economic policy in ways that minimise climate change. Heather Hill, AAT President, said: “Following the 2020 call to action by the professional accounting bodies, AAT is pleased to support this statement of commitment to net zero. Climate change is a crucial issue and every one of us, as individuals and organisations, has a part to play in driving the effort to achieve net zero. At AAT we will continue our organisational activity to improve our carbon footprint, but to also help equip our members to engage in this crucial collective effort, and to bring our influence to bear on the government where appropriate.” Helen Brand OBE, ACCA Chief Executive, said: “Making these commitments is important to create positive business change – and professional accountants are core to this. They are in a unique position to drive good business decisions with positive impacts on sustainability, including on climate action, in the organisations they lead and work for. ACCA is proud to support these commitments and play our part.” Michael Izza, ICAEW Chief Executive, said: “The fight against climate change requires urgent global action, so we were pleased to join our fellow bodies from around the world to confirm our commitment to a zero-carbon society. “We were the first major professional body to become carbon neutral and have brought in measures to help us reach net zero, such as setting up carbon-reducing projects. We will continue to look for ways to minimise our carbon footprint, guide our members on their own net zero journeys and support global action.” J Bruce Cartwright CA, ICAS Chief Executive, said: “ICAS is proud to be a signatory to the Accounting Bodies Network commitment to net zero greenhouse gas emissions and to commit to provide training, support and resources to help our members establish their own net zero pathways based on our experience. The accountancy profession can be a key enabler in the transition to a net zero economy. I believe that if we pool our collective efforts and resources we can achieve our climate change ambitions and make the creation of a healthy and sustainable planet a reality for future generations.” Barry Melancon, CPA, CGMA, CEO at the Association of International Certified Professional Accountants, representing AICPA & CIMA, said: “Over the past decade, we have been witnessing the direct and indirect impact of environmental-related risks on our communities. It is now abundantly clear that to address these risks and achieve climate-goal ambitions, we must work together and lead the accounting profession by example. Public and management accountants have an important role to play improving an organisation’s integrated thinking and decision-making capabilities to promote responsible and sustainable business practices. They have the necessary skills and expertise to help effect meaningful change in this area. As an organisation, we are fully committed to doing our part and will continue to help our members, their organisations and their clients across the globe support with this mission”.
AAT moves to Canary Wharf to meet net zero target Posted 10/06/2021 by AAT Comment & filed under AAT news, Members, Sustainable Business. AAT announces a major shake-up in which it will switch offices and adopt hybrid working to boost sustainability – for staff and the environment. AAT announced this week that in spring 2022, AAT staff would leave their present building in Aldersgate Street for spanking new offices at 30 Churchill Place, Canary Wharf. The move will be much more than a relocation: it will usher in a new era of hybrid working for AAT’s 220-strong workforce and herald a major step in reducing its carbon footprint and towards the legal goal of net zero. It comes as accounting bodies have been called on to reach net zero greenhouse gas emissions as soon as possible and encourage their members to take similar steps by providing training, support and leadership. Jannine Edgar, Chief Operating Officer, comments: “We are excited about this major move to improve AAT’s environmental footprint and create a new working culture that will take the experience of employees and our customers to the next level.” “When Covid arrived, there was a high level of concern that we would not be able to work from home. But actually, we found the opposite to be the case. That started us thinking we don’t need the 25,000 sq ft of space we have at Aldersgate, and that in turn led us to start asking: how do our people want to work going forward? Carbon footprint AAT’s ambition to reduce its carbon footprint has played an important part in the new workplace strategy. Occupancy of the space at Aldersgate Street was below 70% pre-pandemic, and moving from a 25,000 sq ft space to just under 11,000 sq ft represents a major downsizing of the physical footprint, with the energy savings that entails. “It’s a reduction of just under two floors,” says AAT’s HSE and Facilities manager Mark McGrath. The new building – 30 Churchill Place – will be a serviced space managed by WeWork, meaning the building is both designed and furnished. The potential advantage of partnering with a property specialist is that they can focus on achieving best in class throughout the building. AAT will occupy the tenth floor. So how does Churchill Place measure up? Well, it is rated ‘Excellent’ by BREEAM – the Building Research Establishment’s Environmental Assessment Method – which is one of the world’s leading sustainability schemes for buildings. That places it among the top 10% of new non-domestic buildings in the UK on a broad range of measures including energy, waste, health & wellbeing, materials, pollution and land use. McGrath adds: “The building is also accredited with LEED (Leadership in Energy and Environmental Design) which means, for example, that we are supplied with sustainable finishes as part of our floor space. WeWork uses a variety of ethical supply chains, Renewable Green Electricity is sourced and a smart BMS system to supply efficient HVAC (Heating /Ventilation /Air Conditioning) for the building. “Everything from water to electricity will be carefully managed to monitor usage even down to the rubbish being composted. The furniture has been sustainably sourced too. Thought is going into every aspect.” Further improvements AAT achieved carbon neutrality in 2021 (meaning and greenhouse gas emissions from its activities are balanced by measures to remove carbon elsewhere). However, like all businesses, it needs to make further progress towards the tougher target of net zero (whereby a business no longer emits any greenhouse gases). AAT aims to reach net zero by 2030. “Our focus in the years to come is going to be: reduce, reduce, reduce. We asked ourselves, could a landlord help achieve that strategy? And the answer was yes.” Although it is too early to forecast the improvement in numbers, not least because measurements for all organisations were significantly skewed by people working at home during the pandemic, he predicts: “If you look at Aldersgate versus Churchill Place, there will be a big improvement in the coming year. Aldersgate had an EPC rating of D, and that was not likely to improve.” Sustainable employment Adopting a more sustainable footprint as part of the move to hybrid working has wider implications for AAT. HR Director Olivia Hill points out: “Sustainability will be higher up our agenda in terms of what we promote when we’re looking to recruit new staff, because we do think it’s becoming more and more important, certainly to the younger generation, but actually to most generations now.” AAT consulted employees when making its decision to move to a new style of hybrid working. Regular staff surveys showed that this was the clear preference for a majority of AAT employees. New business culture The rapid move to a new office and a new way of working has been born out of the cultural change programme underway at AAT. Launched last November, this change initiative was designed to increase AAT’s agility and effectiveness in a more volatile world. Edgar explains: “When I came on board three years ago, we weren’t delivering projects on time and they were often over-budget. So it was really important for us to have more focus, address some of the inefficiencies and get teams working better together.” The culture change programme identified five behaviours – pace, accountability, challenge, decisiveness and passion – as being important to delivering that. “We talked a lot to staff to get their feedback, and they said wanted more wellbeing, but they also wanted to see more collaborative working,” she adds. The office move – and the shift to hybrid working – is designed to deliver that. The space AAT is moving to is the 10th floor of WeWork’s flexible workspace building at Churchill Place in Canary Wharf, and it has been carefully chosen with the new working model in mind. There will be far more collaborative space in Churchill Place, including a reception with an open-plan café-style area and no less than 13 meeting rooms fully equipped with video-conferencing facilities at their disposal. Working arrangements Staff will generally be expected to spend one day in the office with the people from their division of AAT, and at least one other day around cross-functional projects and business needs. There will be desks for around 90 people to come to the office each day using a booking system, but some employees may want to come in every day. Edgar says it is important that people plan their work to ensure that time spent in the office is used well: “We’re saying: don’t come into the office and sit on a zoom call; plan face-to-face meetings where you can. “My expectation is that the desks will often be pretty empty because people will be in the meeting spaces and collabarative areas. But actually, that’s okay because we’re already starting to see ideas around new efficiencies, new projects, new growth opportunities, just by people having those conversations.” There will also be significant benefits to the office move in terms of wellbeing; in addition to in-house features such as foosball and pool tables, host WeWork offers a programme of activities including breakfast, yoga, fitness, cooking and Spanish lessons, and there’s a much wider choice of services from shopping to gym membership available in Canary Wharf. As Olivia Hill puts it: “Our current office is very much just an office, and that’s how it feels. Whereas I think this will be a place that people actually enjoy going to.”