MTD: Your 5 steps to success: Part 2
Making Tax Digital is the biggest immediate challenge facing accountants across the UK and, with many still trying to get to grips with it, we’re giving you a big helping hand. The team at IRIS have broken down the essential stages into our 5 step programme. In part 1 of our blog series to accompany this, we look at…
Step 2: Profiling the practice
So, we’ve been through stage one - carrying out a review of your client base. The second follows a similar thought process but this time it’s about evaluating your practice.
Why is this important? Simply put, you need to assess whether your practice is fit for purpose as it stands today. Is it geared up for the post-MTD world?
Pausing and reviewing
As with the exercise of profiling your clients, this is about using this time of change as a chance to pause, review and reflect to see how you might re-shape your practice to allow you to be more effective and profitable.
The easy thing to do is just to keep on going as you are but that may not be in the best interests for developing your business.
Looking at what you currently offer, you might consider whether you’re missing a trick. Could you also be offering Financial Planning and pension services, for example? Perhaps you have lots of start-ups who might want your professional guidance to know how to grow faster and access finance.
Questions to ask
Some basic questions to start your practice profile with:
• How many staff work in your practice?
• What is their skill/ qualification level?
• What services does your practice currently offer?
• Has your client audit indicated there are other services your clients need?
Drilling into detail
As you drill down further into these areas, you should then think about these questions:
• Bookkeeping: Does your practice offer a bookkeeping service? Or do you expect clients to come with rough books already prepared? Does your practice currently support clients in maintaining their records?
• Profit v loss: Which services are the most/ least profitable? Do you understand which are generating the most revenue and which are at a loss?
• Outsourcing: Would you consider outsourcing some of services – doing in a different way? Could you turn around something from loss making to profit making? Are there different ways to do it?
• Capacity: Does your practice currently have the capacity to handle additional client record keeping activities?
• Right tools: If all your clients come in with paper receipts and you need to digitise, do you have the tools to do that?
• Training: Are staff willing to do the kind of work required such as assisting clients in maintaining digital records and do they have the right training and skills?
Post-MTD for VAT world
So, having done a thorough assessment and tackled all of the questions above, what services would the practice like to offer? What would the practice structure need to look like to achieve this?
To help you tackle the process of profiling your practice, you could use IRIS Practice Audit, our consultancy service. Our experts will visit your offices, thoroughly assess and review the practice and deliver a report with key insights, including whether you’re getting the most from your IRIS Accountancy Suite. They will offer support and in-depth knowledge of how our solutions can eliminate bottlenecks and streamline your processes.
If you conclude you haven’t got the capacity that you need then you may consider IRIS OpenResourcing. This outsourcing service is a flexible and cost-effective means of completing routine accounts and payroll work without the costly overheads associated with additional staff.
Once you have made these crucial assessments of your client base and practice, you can then start to look at what technology you require. We’ll be addressing this in part 3.
Our team is here to help plot the appropriate route through MTD. E-mail them today at MTD@iris.co.uk.
Look out for part 3 of the series, coming soon.