Members in business: is it time to do without Excel?

Posted by & filed under Members in business.

Excel has found itself facing stiff competition in recent years. With a proliferation of applications offering instant reports, visualisations and forecasts, it can be hard for the old, manual processes to keep up.

Excel is still an extremely popular tool used by the vast majority of finance teams. But with increasing demand for the finance function to provide more up-to-the-minute insights, spending less time on transactions and more time on value-add activities, the pressure is on to automate as many tasks as possible – and that is not one of the programme’s strengths.  

Before the pandemic, a survey of chief financial officers found that Excel skills had slipped from first to last priority when recruiting. In its place, they prize prowess in other technologies that can rapidly and robustly process and analyse data. Covid-19 has shown the frailties of spreadsheets – and the need for more versatile and robust scenario forecasting tools.

So is Excel on the way out, or can accountants still not do without it? Our panel of members give their views on the value of Excel.

If you get Excel right, you can’t beat it

Clare Elliott, CFO, ILUX

Excel is such a powerful application that I can’t see it ever leaving the accounting world. It might change in appearance and format – it is having to compete with some very pretty front-end applications nowadays – but the back-end is never going to die. In fact, lots of new fancy applications often establish themselves on the base of Excel, and often it is possible to upload your data from Excel into the package, which indicates just how much Excel is used by everyone.

It’s straightforward and easy to use once you understand it (although initially it’s incredibly complex so it does take lots of training and experience!). But further than that, it is possible to present data in a more user-friendly way. It can be formatted in lots of different styles and colours so that presenting to others (be that the board of your organisation, or externally to a client, for example) you can achieve the wow factor in your presentation.

Personally, I’m Excel dependent; I don’t know how I would perform some functions without it. Do I wish I was less dependent on it? Not really, no. I don’t see a problem with it, I don’t see it as old fashioned and out of date (yet).

If anything, I continue to learn from Excel. I still come across functionality that I didn’t realise existed. Each time I think of something that would be good and I search for it I’m surprised that it’s been there all along and I have just never come across it before.

As you can tell, I’m a big fan of Excel, but I’ll be the first to admit it does have some drawbacks. To create a presentation, you have to put a lot of effort into the formatting and styling. In order for it to be clever, you also have to be clever. The power of it is huge, but it’s completely dependent on the user. Compare that to Fathom for example, (another application I use); I simply click a button, and some very attractive reports appear before me, without any effort.

It also depends on the size of your organisation and how many people will be accessing one Excel document at any one time. While Excel can be locked and protected, that’s often not practical. If the team is using a live spreadsheet showing up-to-date information that users are constantly accessing and changing, then an Excel spreadsheet is fraught with risks. Users have to be fully trained to use each spreadsheet, understanding how it has been formatted and the consequences of each of their actions within that spreadsheet, as one small change in one cell somewhere in a large document can affect many other calculations throughout the spreadsheet, and finding that one error can be very time consuming.

Using Excel in the correct way for the correct purpose is almost impossible to beat. The problems arise when it isn’t being used properly in each individual situation.

Excel is a cornerstone of our work, but I wish we were less dependent on it

Farha Jamadar, finance manager, Todd Doors

I guess the answer to this question is how technologically advanced is your organisation? Ultimately, I don’t think Excel is on its way out. It is the foundation for a lot of organisations to streamline and produce reporting. This could change; nowadays everything is replaceable. The function and foundation Excel provides can be integrated into many ERP systems. Excel can be avoided and reporting is customised for your needs.

Using Excel is around 60% of my work, so I’m pretty dependent on it. But ideally, I’d like this element to be automated and essentially use a system where my reports are configured and produced for me. The reason I use Excel is that it enables me to customise and review data in different formats. But systems are becoming more sophisticated, which could eliminate the need for Excel.

Excel is a tool that works how you want it. You customise it and manipulate it to get what you want. But it’s error-prone. There are glitches, shutdowns and corruptions that you don’t need. Excel has a capacity limit and when it hits that limit, it’s redundant. It’s difficult to get it to do the work you need it to do.

I could not work without it, yet there is a lot that could be done to update it and develop it. I feel like it’s still can be pretty outdated, almost as if the core information needs to be developed.

There is always something new to learn with Excel

Sanjiv Bali, senior project accountant, A2 Dominion

Although new cloud systems have the ability to extract, assemble and analyse data, I believe Excel is here to stay due to the unlimited features it holds as well. Due to the unlimited range of functions it has, there is always something new to learn within Excel.

I’d say I was very dependent on it, as any data that I extract from any system is exported into Excel format for analysis and report preparation. From my perspective, Excel works very well in analysing large volumes of data that can then be transformed into various different reporting and graphical options in relaying information to users.

If I was to sum up my relationship with Excel, I’d say it’s definitely a data tool that I always prefer to use.

How to stop your home office taking over the house

Posted by & filed under Hybrid work.

There are lots of advantages to working from home. You can, for example, save time and money by not having to commute to and from an office every day. It’s also easier to work flexible hours that you can fit around other responsibilities such as childcare.

However, while working from home can be positive for your work-life balance, failing to establish strict boundaries can leave you feeling like you’re working all the time.

Here’s how to keep your work and home lives separate and ensure your home office does not end up taking over the house.

The home working revolution

Millions of people have had to adjust to working from home over the last 18 months – whether they wanted to or not.

According to the Office for National Statistics (ONS), the proportion of working adults who did any work from home increased to 37% in 2020, up from 27% in 2019.

Now, despite offices opening up around the country, 24% of businesses plan to allow more home working in the future too. At big four accountant PwC, for example, UK workers will be able to spend 40-60% of their time working remotely, the company announced earlier this year.

The number of remote job opportunities is also rising, with three times as many adverts mentioning home working in May 2021 as in February 2020.

“While the proportion of workers both working from home and travelling to work has remained relatively stable, evidence from the OPN and the Business Insights and Conditions Survey (BICS) suggests individuals and workplaces anticipate increased levels of hybrid models of working after the COVID-19 pandemic,” the ONS said.

5 ways to make working from home work for you

1. Create a designated workspace

Devoting one particular space to working during office hours is a good way to avoid work spilling over into your home life.

“I turned the spare room into an office, and I don’t let myself work from anywhere else but there,” says Charlotte Kitchman, founder at virtual assistant service The Admin Crowd.

“I think it’s important to keep work at work in the same way you would if you were working in an office away from home. So, I bought storage solutions from Ikea to make sure I could keep all my paperwork and equipment stored away in that room.”

2. Make sure you’re fully connected

There’s little more frustrating than trying to work when the internet connection is running slowly or down altogether. 

A high-speed internet connection, with enough bandwidth to cope when everyone you live with is also online, is therefore essential to successful home working.

To avoid the lines between your work and personal time becoming too blurred, it’s also sensible to use a separate laptop or computer for work if you can.

3. Clear work stuff away when you’re not working

Not everyone has a separate room they can use as a home office. But you can still stop your home feeling like a work environment by tidying away your computer and papers at the end of each day.

It’s an approach that works for HR manager Valerie Conroy. “I have been working at the dining room table,” she says.

“But I was very disciplined about shutting down my laptop and clearing all my work papers away every day, so they weren’t in my face in the evenings and at weekends. It helped me to relax when I wasn’t working.”

4. Stick to normal working hours where possible

When you’re engrossed in a piece of work, it’s tempting to keep plugging away at it late into the night. But engineer Niki French has found a novel way of avoiding work creeping into her home life in this way.

“I started walking around the block before I sat down at my desk, pretending it was my commute to work,” she says.

“At the end of the working day, I would then turn my computer off and walk the other way around the block as if I was commuting home again. It helped to give my working day a definite beginning and end.”

5. Do what works for you

We are all different, so while following the tips above can be helpful, the most important thing is to find what works for you.

“I don’t actually think you need a designated space to work from home successfully,” says long-term homeworker Philippa Shipp, director of the Miss Kantoor Virtual Assistant service.

“Personally, I like to mix it up by working in different rooms, which I can do because I store almost everything online”.

In summary

Working from home can be great, as long as you have the discipline to concentrate on work when you should – and not when you shouldn’t. The main dos and don’ts are:

  • DO make sure you have the appropriate equipment – including a high-speed internet connection
  • DON’T slip into the habit of working longer hours and not giving yourself enough time to relax
  • DO keep work stuff out of sight and out of mind when you are not working

Further reading

How to make your business more environmentally sustainable and how to avoid greenwashing

Posted by & filed under Sustainable Business.

Since 1970, carbon emissions have increased by around 90%. It’s everyone’s responsibility to do their bit to ensure our planet stays around for as long as possible.

Large corporations and governments can have the most significant impact, but small to medium size businesses collectively have the power to make sizeable changes too. This will be of benefit to your business as well as to the environment. 

Have you read AAT’s new ethics guidance?

All AAT members are bound by AAT’s Code of Professional Ethics, so have you seen the four new guidance notes?

View guidance

Why should my business be more environmentally sustainable?

A green business considers the impact on the environment and the future of the planet in its activities. This is good for Earth, it feels good and can also be commercially advantageous.

Five commercial reasons to be more environmentally sustainable:

  1. You’ll grow a positive reputation and brand image.
  2. It will set you apart from the competition.
  3. You’ll attract like-minded clients.
  4. It can help you to attract and retain talent.
  5. You can save money by reducing your costs and bills.

What is greenwashing and how can I avoid it?

Greenwashing or “green sheen” is when organisations mislead their customers by marketing themselves as environmentally friendly without actually caring or putting the necessary practical work in place.

Prominent examples of greenwashing:

  • The Volkswagen emissions scandal – Volkswagen was ordered to pay a $2.8 billion fine for “rigging diesel-powered vehicles to cheat on government emissions tests”.
  • McDonald’s paper straws – McDonald’s describe their straws as eco-friendly, but their thickness means that they can’t be recycled.
  • H&M – The Norwegian Consumer Authority accused H&M of greenwashing, saying it provided insufficient information on the true sustainability of its conscious collections.
  • ‘100% recyclable’ plastic bottles – although plastic bottles are 100% recyclable, companies like Coca-Cola only actually use 20% of recycled plastics to make bottles. It needs to be 100% recycled, not recyclable.

Don’t claim you have green credentials unless it’s something you proactively care about and take action on, and it goes without saying not to use sustainability claims to try and disguise your downfalls.

How can my business be more environmentally sustainable?

It’s fine to start small, don’t get overwhelmed but all the different things you could do. Choose a couple of things that will be easiest and most beneficial for you then you can always add to them.

There are three main ways that you can reduce your environmental impact:

  1. By reducing your pollution and energy usage.
  2. By increasing your reliance on renewable energy and recycled materials.
  3. By offsetting any negative environmental impact.

17 ideas on how to make your business greener:

  1. Go paperless or minimise paper waste by printing less and printing double-sided.
  2. Recycle as much as you can, including paper and ink cartridges.
  3. Separate your food waste.
  4. Get involved in local projects.
  5. Plant trees.
  6. Organise a litter pick.
  7. Use local businesses.
  8. Use ethical suppliers – you can switch to an ethical bank and a green energy supplier.
  9. Buy and use recycled materials and products where possible. 
  10. Walk, cycle, take public transport or car share where possible.
  11. Use solar panels.
  12. Work from public spaces instead of working from (and heating your) home.
  13. Be mindful of your data usage – every email you send, every website you visit uses energy.
  14. Minimise use of water and electricity.
  15. Put on an extra layer before putting on the heating.
  16. Work with people who share your values.
  17. Donate a percentage of your annual profits to a green cause.

Write a social responsibility policy

If you are keen to operate your business in a way that is mindful of the planet and you aim to keep your impact on the Earth’s resources to a minimum, then create your own social responsibility policy to tell people how you’re doing it and what you’re committed to.

Your social responsibility policy can be broken down into four areas:

  1. Environmental – how you aim to be greener
  2. Ethical – operating in a fair manner
  3. Philanthropic – how you aim to make society a better place
  4. Economic – financial decisions aren’t just made with profit in mind but also with social responsibility in mind

Don’t be afraid to talk about what you’re doing on your social media and in your marketing – you will help to inspire others, attract like-minded partners, and you can gain a competitive advantage.

Further reading

Why do accountants hire business coaches (and should you)?

Posted by & filed under Members.

An increasing number of accountancy firms are hiring business coaches to help them achieve their financial and personal goals. So how does it work?

Business owners know that when the pressure is on it can be difficult to service clients and also focus on growing the business. Sometimes outside help is the answer.

Gary Keating has been a leading business coach for more than 25 years and his company ActionCOACH Bristol has accountancy firm clients. He also advises lawyers and independent financial advisors who he says have similar challenges.

“Many people running accounting firms just see themselves as being in a job,” he said. “They have not thought properly about where they want to be in five years’ time. They do not have a proper vision beyond thinking they will sell their book or be bought out.”

He adds that although accountants work with entrepreneurs, they do not consider themselves to be such creative business people. They may have dreams of buying a yacht, working a two-day week or retiring, but their current business and financial model means such a future is a fantasy.

“A business coach would work with you on a five-year plan and assess how your current financial situation aligns with your life goals. Often someone is at full capacity and putting so many hours into the business they are not spending enough time on the business.”

So, what is the answer?

Mindset

Keating says accountants need to work to the clock and not the activity they are being asked to do.

This means improving their time management by focusing on what is important but not urgent and ensuring that if they are busy they are working on things that will help them achieve their aims.

“The secret is to prioritise what will get you closer to your five-year goal,” said Keating. “Accountants, like lawyers, do not make good entrepreneurs. Entrepreneurs run their business as if they are going on holiday every Friday – until they are.”

Andrew Bunn works for the Launchpad Programme and advises businesses, particularly start-ups. He says no business owner should be afraid to ask for coaching advice.

“It can also be helpful to consult member organisations such as the Federation of Small Business and your local Chamber of Commerce. Both organisations provide a wealth of useful resources for business owners,” he said.

The role of a good coach is to provide real-world advice and a fresh perspective on the issues facing a business. Many accountants talk about working to live, but if their professional and personal lives are not aligned the reverse is almost certainly true.

Accountants need a strategic plan to grow their business and achieve their goals.

Many firms are built on referrals, but this is not always the route to success because the quality of clients being referred may not be as good as the ones a firm already has.

Changing perspective

A good coach would get a business owner to work on all several areas of the business at the same time. For example:

Lead generation: What are you doing to get leads and what is your conversion rate? Find a method that plays to your strengths. Maybe you are great at networking and meeting people at events? Do this rather than being in the office working on something that could be delegated.

Be confident about your pricing: Accountants can be terrible at putting up their prices because they fear they will lose clients. A business coach will boost your confidence in this area by advising on how many clients you might lose if you raise your prices by, say,10%. The reality is you would not lose that many because clients tend to be loyal. Also, undertake some competitor research to see where your pricing sits in the local market.

Boost your number of transactions: One key to business growth is making more money from existing clients by upselling. If you are asked to set up a new company ask the client if they might also want help with their tax? Would they prefer to work with a junior or a senior partner?

Grow your own gross margin: Accountants can be poor at studying their own accounts and looking at where they could cut costs to improve their gross margin.

The idea of coaching is having another pair of eyes – a professional who can help you identify strengths and opportunities, set clearer goals and accelerate results. Often this requires a change in thinking.

Coaching made me think differently

Sara Whitton is co-director of cloud accountancy firm My Management Accountant and says working with a business coach has helped her to think differently.

She and her business partner Martin Brown meet regularly with The Alternative Board (TAB), a specialist company providing coaching and mentoring support.

“I quickly realised that I could be very single-minded when it came to the business,” she said. “Now if we have issues with staff I can focus on alternative thinking. Coaching has improved my leadership skills because I can use different tactics to get people to adapt to change, for example.”

TAB also provides peer board support which means Sara can see how other businesses are experiencing similar challenges and share advice.

The result

She is now focusing on the business and not just the work she has to do.

“Our vision is much clearer and we can communicate it to the wider team. The coaches have helped us fill any gaps and find alternative ways to cope when, for example, there is no spare cash around to solve a problem.”

She cites the example of recruitment and on-boarding which have been difficult.

“We identified other resources and looked at who within the business could be trained to do something that was not being done.”

So, will she continue to use business coaches?

“Yes, but we always change the type of coaching we have based on the requirement of the business at a particular time. A good coach will understand your needs and adapt.”

The sceptic who turned his business around

Paul Light is Managing Director of Lite Tax in Bristol and was sceptical about business coaching before he began working with Gary Keating at ActionCOACH.

“I thought I knew how to do things and bringing in a coach looked expensive, like having another member of staff,” he said. “But I can honestly say he has turned the business around.”

Light says turnover and profits have doubled over the four years he has worked with a coach and he is currently working on his next five-year plan.

“We were just going about our business but Gary got us thinking more about sales and marketing, so I started to concentrate on that.”

He added: “He has also become a listening post for me because there is illness in the family and I need to make sure the business keeps ticking over if I have to take time out.”

Light meets his coach every Thursday from 0830-10 am. Over the past year, the sessions have been via Zoom, but face-to-face coaching has restarted.

“I am 60 next year and my vision is to get it to a stage where I can come into work two or three times a week if I want to and look after my family.”

Where to find a business coach:

There are online resources such as Find a Business Coach , but it is advisable to ask your network for recommendations. You could talk to your local Chamber of Commerce or put a message on LinkedIn.

Solving talent problems in the finance team

Posted by & filed under Career, Members in business.

Business finance teams are facing twin challenges when it comes to talent: attracting new candidates to cover an expanding workload, and retaining and upskilling existing staff.

The pandemic has pushed most teams into a more digital finance environment. Up-to-date scenario planning and the need for more support on decision making has put emphasis on the soft skills that finance team members can offer as well as their technical abilities.

The economic impact of the coronavirus has also put some businesses in a precarious position. Are teams in a position to be able to recruit? Our members in business panel let us know how they’re approaching recruitment (if at all), the skills they’re looking for in new talent, and their approach to upskilling.

It pays to take a chance on someone

Clare Elliott, CFO, ILUX (a workplace IT provider)

We have been heavily recruiting in recent years, and in the last 18 months alone, have increased our workforce by over 220%.

We’re not actively recruiting for specific roles at the moment, but we are always looking for talent that would be too good an opportunity not to be missed. Some of our best people have been those we took a chance on in the moment, but they have brought so much to the organisation.

Knowing that our plans are to continue to grow is a great position to be in when someone amazing pops up in your emails, as you never have to give that automatic “no”; you can always be open to the possibility.

Regardless of your role and level of role within a finance team, everyone has a very important function, and the responsibility on each and every person is huge. Therefore there are certain characteristics I look for when recruiting, for example: independent thinking, a questioning nature, the desire to delve for information, the drive to find errors and inconsistencies, and strategic thinkers who have the big picture in mind. A finance role demands someone have extremely good attention to detail while being disciplined enough to keep that top-level thought process.

In my experience, there are some excellent people looking for work who you wouldn’t think ordinarily should be looking, which brings both benefits and disadvantages. There are people looking for something at a lower level than they are qualified or experienced to do, and at the other end of the scale lots of young people who have the drive and energy to exceed expectations as they want to be successful and build their career.

So while I believe there is a lot of amazing talent available, it is always hard to reach the person you’re specifically looking for as you both have to be in the right place at the right time. You also have to just go with your gut feeling and take a chance. Some people are incredible during interview and getting through the door, and then not quite live up to the dream they have sold you. I’ve also recruited people who didn’t set my world alight during the interview but there was something about them that made me want to give them a chance, and they’ve turned out to be fantastic. I feel so lucky to have them as I know they could easily work anywhere else if an employer knew how amazing they are!

There are two approaches to upskilling: transferrable skills (so those within the industry and generic to their role), and company-based knowledge (so very specific to their role within your business, and client-specific too). Both are equally as important as each other, as both increase engagement and commitment from, and to, the employee, which will deepen loyalty to each other too. Ultimately though, whilst the company needs to think about the needs of the business, in order to retain someone you need to give them access to further development that they are really keen to do, as that will increase motivation and the chances of success, which further increases the drive to push harder and become even better. If the arrangement is reciprocal then both parties will benefit the most.

Personal skills and resilience are the priority

Andy Murray, finance lead, Manna Pro UK

We’re not currently recruiting, however if the workload continues at this current pace and the business growth remains strong it is sure to be a prompt requirement.

The most valuable skills within a finance team (accounting aside) would be a combination of the following soft skills; communication, social Intelligence, and a great personality and sense of humour.

As well as the above, we cannot forget the ability to work as part of a team, to have accountability and flexibility, and being able to multi-task a varied workload while under pressure.

Upskilling is a key necessity and forms part of the annual review plan, where all employees are taken through this process. Upskilling is vital to all members in the finance team. Upskilling subjects have included extra system training to become a ‘subject matter expert’, Excel courses, soft skills training and wellbeing courses, to name a few.

All team member development plans are reviewed quarterly to check on individuals progress and to identify any additional needs or requirements to support the employees.

The role of finance is changing, and so are the skills

Farha Jamadar, finance manager, Todd Doors

We are currently recruiting, but not within the finance function. We’re looking for operations – drivers in particular – and sales assistants. Mainly due to the loss of staff while on Furlough.

Finance is no longer the dated image of a bunch of people kept to themselves. It’s now about understanding and working with different Departments to achieve the organisation’s goals, answer questions to highlight variances and forecasts so that you can make changes and be flexible as an organisation.

Finding staff is not a check box activity. It’s juggling between finding someone who has the technical expertise and the experience in producing work, but also the communication skills and the ability to fit into the organisation to ensure business partnering (a crucial part of the job) goes well.

With existing staff, we’re reviewing tasks and duties to automate the mundane, developing our people to understand the overall objectives and implementing tasks and duties around that. Most of these require updated Excel training but also soft skills like communication, being able to understand requirements and deciphering the needs of senior managers.

Heather Hill becomes new AAT president

Posted by & filed under AAT news, Members.

Heather Hill has taken over as AAT President, succeeding David Frederick who stepped down at the AGM.

She will remain AAT President until September 2022, with Christina Earls taking over her role as Vice President.

Heather began her accountancy career in the early 1980s whilst working for a local authority in the finance department gaining experience in different areas, including IT and housing benefits. During this time, she passed her AAT examinations and later went on to take her Association of Taxation Technicians (ATT) membership examination.

Heather is a Fellow member of AAT and ATT and has been a professional member of AAT for 31 years. She maintains a passionate interest in the organisation, supporting local branches and events. Heather has also served as an AAT Council member since 2016, including as Chair of the Management Board.

After relocating to Wiltshire with her husband, Heather set up her own successful accountancy practice in 1993, with clients including unincorporated businesses, limited companies and charities, with a focus on financial and management accounting and tax compliance.

Her sound financial advice, managerial guidance and hands-on support also led her to prevent a number of these businesses and charities from failing. She also provided support to help businesses grow by acting as a sounding board and advisor.

Heather is keen to support the resumption of in-person meetings and networking. There will be an early chance to meet her on Wednesday 27 October when she attends the Leicester branch’s first face to face – Trading with the EU after Brexit.

Outside of work, Heather volunteers at a local branch of an international charity where she helps members of her local community, including providing one-to-one IT training and employment support. Her other interests include country dancing and singing with the Military Wives’ Choir.

Following her appointment, Heather said:

“It’s a great honour to have been elected President of AAT. I’ve enjoyed my role as Vice President, including supporting  David in his role and engaging with AAT’s members and students.

“As President, I look forward to working closely with our new Chief Executive, Sarah Beale, alongside the senior management team to help steer the strategic development and future direction of AAT, as well as representing the organisation over the coming year.

“Although this remains a challenging time for many businesses, I look forward to leading AAT in finding new ways to respond and adapt to the rapidly changing world of business, whilst continuing to support our students and members both in the UK and internationally.”

One-year delay for MTD will help businesses but could feed complacency

Posted by & filed under Coronavirus, Making Tax Digital, Members, Policy.

Relief greeted the delay to Making Tax Digital for Income Tax and Self Assessment (MTD ITSA), but also concern about delaying preparations.

The Government has announced a one-year extension to the start date for MTD for Income Tax Self-Assessment (MTD ITSA) from April 2023 to April 2024 to allow businesses more time to recover from the pandemic.

The move is the second time the Government has soft-peddled on MTD because of Covid-19 and follows lobbying from stakeholders. HMRC will also benefit from more time to carry out testing. Its statement reads:

“A later start for MTD for ITSA gives those required to join more time to prepare and for HMRC to deliver a robust service, with additional time for customer testing in the pilot.

Lucy Frazer, Financial Secretary to the Treasury, commented:

“[A]s we emerge from the pandemic, it’s critical that everyone has enough time to prepare for the change, which is why we’re giving people an extra year to do so.

The revised timetable has been written into legislation and imposes the following commitments:

  • Individuals with self-employment income or property income will need to comply with MTD ITSA for the year beginning 6 April 2024.
  • General partnerships will need to comply from 5 April 2025.

MTD ITSA will be introduced for 4.2m taxpayers with business or property income over £10,000 a year. That includes business owners, sole traders, landlords and partnerships.

Like MTD for VAT, businesses must keep digital records and use third-party software to submit their income tax returns to HMRC. Under the changes, people required to file under MTD ITSA will need to send a quarterly summary of income and expenses, plus an end of year report, using MTD compatible software.

Accountants shared their responses to this announcement as the news came out.

A relief – but we should press ahead with preparations

 Clare Bowen, Director for MHA Monahans

The delay to the Making Tax Digital (MTD) rules came as both a surprise and a relief for many small business owners up and down the country. After 18 months of uncertainty, this extra breathing space to master MTD policies was welcomed with open arms. And as an accountancy firm, we can only agree that the extension of the deadline is brilliant – but it doesn’t mean that anything should be done slower.

In recent research undertaken by MHA Monahans, we found that one in three business leaders predict a decline in revenues over the next 12 months. And with the furlough scheme due to finish imminently, 17% of businesses say that they are likely to implement hiring freezes. This is where MTD can really come into its own.

By digitising accounts, as well as filing every quarter, no longer will small businesses need to worry about high levels of uncertainty. What the digitisation of accounting records required for MTD will do is give business owners a much better understanding of their own business. There will be no more unhappy surprises in the forms of large tax bills after filing at the 11th hour, cash flow will be managed in a much more streamlined way and decisions can be made in a more informed manner, avoiding knee-jerk reactions.

Next step: The extension of the deadline removes the sense of worry from many business owners’ minds. There is now more time for them to work with their accountancy firms to implement MTD tools and technologies and reap the benefits. Any hiccups along the way can be ironed out efficiently long before the new rules are even implemented, getting SMEs off to the best start possible.

Verdict: The delay is welcome, and the digitisation of accounting records will benefit struggling businesses.

A good move by the new Financial Secretary to the Treasury

Phil Hall, AAT Head of Public Affairs & Public Policy

This was a welcome move by the new Financial Secretary to the Treasury, just a few days after being given responsibility for HMRC.

The 12-month delay for businesses and landlords -24 months for general partnerships – not only offers some much-needed breathing space to 4 million-plus people and their accountants; it provides HMRC with a chance to make improvements, to ensure the software has been fully tested and is more widely available and most importantly, to preserve the integrity of the tax system.

It’s imperative this extra time isn’t wasted. HMRC need to raise awareness and understanding of new MTD requirements to landlords and businesses, but they are not alone, professional bodies including AAT, must use the time to further help, inform and guide the agent community too.

Next Step: HMRC and professional bodies must use the extra time to help agents and businesses better prepare.

Verdict: A good move from the new Financial Secretary to the Treasury.

It’s a missed opportunity, but for many it will be a relief

Oumesh Sauba, Director, Sauba and Daughters Co

I have mixed feelings about the delay. I can understand the reasons why HMRC and the Government felt they had to delay it, but I do think it’s a missed opportunity. After Covid-19, most businesses have moved online and this is a great chance for all business’s tax affairs to be moved online too. However, it’s welcome news in that it will give accountants and businesses more time to prepare, which is beneficial for everyone involved.

Next step: We are continuing to prepare clients to move online and supporting them through this process so that they are ready for when MTD is introduced.

Verdict: While it seems a shame to delay the progress made digitalising businesses, the additional preparation time is welcome.

While it’s welcome, we shouldn’t be complacent

Lee Murphy, Managing Director at The Accountancy Partnership

The news that the compulsory date of MTD for Income Tax Self Assessment has been pushed back might be welcome news to many. That said, it’s essential that accountants and bookkeepers use this time to help clients prepare for the transition, and that those affected put MTD processes in place.

Next Step: MTD goes beyond compliance, and there are lots of advantages to embracing digital bookkeeping sooner, rather than later, including greater efficiency, and improved collaboration between accountants and their clients.

Verdict: We can’t ignore MTD ITSA even if it is delayed.

How important is mindset in running a business?

Posted by & filed under Career.

Sharon Burrows is a freelance accountant running her micro practice STB Accountants in Brentwood, Essex. Her accountancy business has been going for 12 years, and she had run other companies previous to that.

We spoke to her about her experiences of being her own boss and asked her if it gets easier as time goes on.

What was the catalyst for you starting your business?

I like to work with the type of client who wants someone who’s been there, who knows what it’s like to be in an entrepreneur’s shoes and understands a lot of the pitfalls that can occur. I have that experience to share.

I’d been in business with my husband. We’d supplied consumables to the construction industry. The accountant we had wasn’t brilliant. He’d been recommended to us by the bank and wasn’t qualified; he was an ex-bank manager.

Then I’d moved into accountancy; I’ve been doing it for 30 years now. I worked in the City and then set up another business in troubleshooting.

I’d always wanted my own practice, so I went back and qualified with AAT after starting my qualifications through ACA. If you’re going to start your own practice, then AAT is an excellent, practical route to doing that. I began by doing bookkeeping then moved on to tax returns and accounts.

What were the main lessons you learnt in your first two years of running businesses?

The most important things I learnt were to set good foundations in place, whether in terms of time management, budgeting, logistics or systems. From a time and money perspective, everything will always take a lot longer than you think.

Does it get easier?

Yes, once you’ve got your processes in place and you’re happy with them. Tricky things will always come up now and then, but you get increased confidence in yourself with time.

There’s greater flexibility in working for yourself, but you continually work hard. I love what I do and enjoy helping people. It’s great to be able to go out in the sunshine in the week and work the weekend when it rains; it’s the little things like that.

How important is mindset in running a business?

You’ve got to believe in yourself, and you’ve got to be prepared to make mistakes as with anything you do in life. Mindset is a big part of it, and it comes with experience.

Everyone suffers from imposter syndrome, but if you’re the type of person who sets up a business in the first place – if you’ve worked for someone else before and you believed you could do it better – then you must have something inbuilt.

What do you wish you’d known when you started?

To just take one step at a time, be a bit bolder and braver, and have more confidence in myself.

What advice would you offer to others thinking of starting their own practice?

Make sure you always stay up to date with your licence, CPD and keep your finger on the pulse. I do this by being a member and secretary of the AAT Essex Branch; I subscribe to tax magazines and visit the AAT website regularly.

Keep it personable with your clients. I get in touch with mine at least once a quarter, especially those I do VAT for. I try to make it as seamless as possible for them as it helps in the long run.

Get some good software in place – it doesn’t have to be the most expensive but make sure you’re happy with it. The costs can run away with you, so start small and grow slowly as you get more clients. Add-on software can help streamline your processes but make sure you’re getting it because it’s relevant for you, not because you think you should or because someone is trying to sell it to you.

Why did you decide to become a licenced AAT member, and how has it helped?

I wanted to have my own practice, so I needed to be a licenced member. I’m now a fellow licence member, so I can do extra things like sign off mortgage applications.

The CPD is second to none, and I had the practice assurance done on my practice earlier in the year. The checks were thorough, and it was a beneficial exercise.

Being licenced makes you more reputable and marketable. Recruiters often approach me because of it (even though I’m not looking for employment!).

Further reading

Members in business: how are finance managers plugging their data gaps?

Posted by & filed under Data analytics, Members in business.

Data is an essential component of any finance and accountancy work, but teams aren’t capturing enough of it. The pandemic has exposed how historical data doesn’t provide enough usable insights in a fast-moving world.

Some teams are moving into real-time data and automation to help streamline and consolidate data and capture more up-to-date information to improve planning, forecasting and decision making. But many more finance functions are still figuring out their approaches.

We asked our members in business panel how they capture data, where their data gaps lie, and how they’re addressing it.

Capturing some data can be tricky – no matter the method

Clare Elliott, CFO, ILUX (a workplace IT provider)

There is one specific piece of data that we fail to capture successfully, which is specifically how long it takes each person to complete each task. Not in general terms, but specifically – for each person, for each client, and for each unique scenario. Capturing such detailed data is time consuming, and not always as easy to capture electronically as it may sound. Systems have to be given very specific parameters and often multiple tasks can be running concurrently, even though we all know that one person can actually only perform one task at any given time. Capturing it manually is very time consuming, but capturing electronically may give rise to slightly inaccurate data. Both of which are not helpful.

There were two big data gaps that we uncovered at the start of the pandemic. One: client-specific documentation that was readily available to all. We became aware that sitting next to each other in the office meant information was more easily shared verbally, but that left gaps when individuals left the organisation and made it harder for individuals to work when separated from each other.

Two: detailed analysis of employee skills. This became apparent when we employed new schedulers who needed to understand the exact skills of their team but didn’t have the personal history to reflect on. Without the documented list of tasks and individual skills, the process slowed down.

The pandemic was literally the perfect storm; highlighting both what you do brilliantly and exposing your gaps. The most important thing was to learn from that exposure and try to plug the gaps. If the pandemic has taught us anything, it’s that any eventuality really is a possibility and not just a “what if” conversation!

The systems we use to capture data from across the organisation. Programming these systems takes time and often needs to be tweaked over time to reflect the change(s) in process. Therefore, it needs to be continually monitored. Having software that can be programmed to capture the specific data we need is invaluable, but that is both time-consuming and costly, so the benefits must always outweigh that cost.

But having the ability to do that is also invaluable, when it works well it brings greater efficiencies and highlights areas for improvement. We are continually looking to improve data capture across the organisation, and are currently in the middle of changes to our bespoke software to help capture even more data, in order to drive efficiencies even further down the line.

We need our data to keep up with the world

Farha Jamadar, finance manager, Todd Doors

I wish we captured more information on future trends and events that affect our specific industry that can be combined to build a better forecast. More collaboration with suppliers and customers would ensure all needs are met, developing our business and industry into an ecosystem that can work together and grow rapidly and meet the needs of shareholders.

While data is readily available all the time with the help of technology, it’s converting this into useful information that matters. Historically, we converted our historic data into information and used this as a comparative and benchmark tool. However, with consumer and trends changing at a faster rate than ever before, you need to be able to forecast and tailor your forecasts to this. It’s all about looking into the future, not relying on the past. This was the case when it came to the pandemic, as previous data became mainly irrelevant.

We currently capture information from supplier shipping times and stock levels, marketing information the interaction we get from different demographics and for which stock lines. Alongside this, the daily updates on the pandemic of whether the rates are up etcetera.

I think it’s a case of developing infrastructure to be able to convert all data into relevant information, then utilising finance to deliver this information to management, so that the long and short term strategy can be set. Information and systems go hand-in-hand. When this works, the company has the power to increase profits and market share by pivoting toward trends and markets.

We’re still manually gathering some data – that needs to change

Björgvin Vigfússon, finance manager, Westmorland Linen Rental and Laundry

As accountancy/finance function and many other functions have realised in the last few years, data capture and analysis is slowly(already) becoming a major part of day-to-day operations. We currently are able to capture majority of the data we need. Automation is where we have identified shortfalls in our data capture.

Currently, a good portion of the data is manually gathered and processed. It is not a high portion overall, but if we could have it automated, we could use that free time on adding value to the business. So we are looking into ways of upgrading our systems.

The pandemic didn’t expose any data gaps for us. If anything, the pace slowed due to our client base being predominantly in hospitality. We managed to analyse our data and understand it a bit better. We have then used the lessons learned to our advantage now that business is almost back to “normal”.

Career profile: Assistant Accountant

Posted by & filed under Career profiles.

Ellie Garratty is an assistant accountant with Mazars, an international audit, tax and advisory firm.

In our interview, she talks about how she decided to become an apprentice rather than finishing her second year of sixth form, how she has found the AAT qualifications practical and invaluable at work, and how technology and communication skills are a surprisingly important part of her job.

What is your role?

I am an assistant accountant at Mazars UK.

What made you decide to become an accountant?

When I was at school at Bacon’s College in Southwark, London, I loved Maths and Business and in school I was pushed to go to university. If you were interested in a career in finance then university was seen as a natural progression. However, I was not keen on going to uni, as I wanted to be earning money as soon as possible.

In Lower Sixth I was at City & Islington Sixth Form College and I started studying Maths, Business and Psychology. I was thinking of studying Maths & Economics or Maths & Business at uni.

During my lower sixth year I went to a lot of careers talks and I became really interested in accountancy. They discussed options to become an accounting including University and ACCA, but I thought rather than study for three years there must be a quicker way. I was interested in an apprenticeship because I wanted to learn on the job and earn money in the field.

Where can an AAT qualification take you? The choice is yours

An AAT qualification can open so many doors for you in your career, giving you the change to explore roles in any industry you can think of – from fashion and sport to banking or forensic accounting. After all, every business needs someone to look after its finances.

Find out more

How did you break into accountancy?

In the summer of Lower Sixth I joined a programme called Leadership through Sport and Business.

I decided to go on the programme with LTSB rather than going back to sixth form, so I had my AS Levels but I didn’t finish my A Levels. Over the three months between September and December 2017 I was studying AAT Level 2 and being supported by LTSB with help on interviews, getting a job, finding the right career opportunities. I also had a part-time job, first tutoring and then working in Waitrose.

Why did you decide to follow this career route?

Through LTSB I started studying AAT Level 2. I found it really interesting, and I enjoyed it. It gave me a really good insight into what accountancy is and what is involved. LTSB said that Mazars was interested in my CV. They had recruited two other people before me via LTSB and I had the interview in January 2018 and started work later that month.

What is the most interesting part of your job?

What I like best about my job is the variety and being able to speak to different clients. I can never say that I’m bored. I’m interacting with clients on a daily basis and I like that they trust me and come to me for advice.

The most surprising part of my job is how much technology is involved. At AAT Level 2 it was quite a manual process but Mazars is a large accountancy firm, and they are at the forefront of new technology and software, so there is not a lot of manual processing.

What made you choose Mazars?

I chose Mazars because it was a bigger firm, it was not just focused on one aspect of accountancy or clients. There was a wide range of clients, and I felt that I learn best when I was exposed to a wide range of clients.

I had two apprenticeship offers – one from Mazars and one from a firm based in the City of London.

They both offered me a role, but Mazars paid better and the other company was smaller and more focused on investment.

What does a typical day look like?

Every day is different. I have a lot of different clients in my portfolio and the bigger ones take up more of the week. I check my emails and I have a weekly and daily checklist.

Every Monday we have a team group meeting. I’m also responsible for some of the juniors and so I check in with them.

 I review transactions that have been processed or payment runs that have been done. I answer questions from clients that can take up a couple of hours of the day. I do payment runs for one of the larger clients. The first week of the month is always hectic because we are finalising VAT returns.

How has AAT helped you?

I was offered a job with Mazars, and I started working at the end of January, 2018, and I’m still there now, that’s three and a half years on. I studied for Level 4 between 2019 and 2020.

Level 4 was helpful in my job, particularly the “understanding the financial statements” module, even down to notes in the financial statements.

AAT study has certainly made me more independent and I really recommend it to other people. For example, when I was learning the Indirect Tax Course with AAT I was working on VAT returns at work, so I had more context and it helped me understand what I was preparing.

I found that very useful, going through all the exams and applying what I learnt to my daily job. My advice to others at the early stage of AAT is to use your time to reflect and think about what you enjoy, as that will give you an insight into what you might want to do in the future.

Any tips on how to break into the profession?

  • Research and explore your options, and whether you want to be with a larger or a smaller firm.
  • Think about the different routes into accountancy – do you want to join as a graduate or after leaving school?
  • Consider an apprenticeship. When I was at school I was encouraged to go to university. Apprenticeships were seen as more suitable for people who were not going to university. However, for me it worked out better taking an apprenticeship.
  • Don’t just go for the first job offer you receive. Research the company. You could be the right fit for them, but you need to make sure that they are the right fit for you.
  • Find out what study package they are offering.
  • Once you are in the role ask as many questions as you need to. There is no such thing as a silly question. I am now training some graduates who have joined my team and I encourage them to ask any questions they like.
  • When you are in the workplace ask questions from other members of the team so that you can learn on the job.

What skills do you need?

Communication and technology skills are really important. We use cloud based software and it can decipher relevant information from an email so you do not need to upload anything to an Excel spreadshet.

What are you studying now?

I’ve got my synoptic exam and then I will be fully qualified. I don’t need to book time off for study leave as it is provided by my employer.

My work is very flexible. Although the hours are nine to five, I asked if I could work nine to three because I’m working from home, and I felt that it was hard to study at the end of the day. So now I finish at 3pm, have a break for an hour and then I start study from 4pm. I’ve been well supported by my manager.

What has your role given you?

I started work at 17, and I always wanted to have a career in accountancy. AAT has helped me develop my time management and learn on the job.

Communication skills are a big part of what I do. First, I was a bit shy but now my confidence has definitely grown. Initially, I was so scared to pick up the phone. Now I just call clients whom I’ve built relationships with, or I go to the offices and have conversations with them. I have a large range of clients, and I take every opportunity to develop those skills because they have been very beneficial.

Where can an AAT qualification take you? The choice is yours

An AAT qualification can open so many doors for you in your career, giving you the change to explore roles in any industry you can think of – from fashion and sport to banking or forensic accounting. After all, every business needs someone to look after its finances.

Find out more

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