Buying guide: Compliance and reporting tech for accountants

Buying guide: Compliance and reporting tech for accountants

Buying accounting technology is an investment – and expectations are high

Buying guide: Compliance and reporting tech for accountants

“We expect our software suppliers to be proactive in their account management, to share their roadmaps and be transparent about new features and collaboration – that’s critical to our decision making and keeps us ahead of the curve on client solutions,” says Nicki Savill, director of business outsourcing at Moore Kingston Smith.

When taking the plunge, many UK accounting firms look to cherry-pick the best features from software. Automation, cloud-based infrastructure and digital sign-off are features of the present, and are pushing accountants toward greater productivity and accuracy.

As these conveniences become more commonplace, accountancy practices may look forward to expanding their offerings. In addition to basic tools, powerful analytics and integrations place more decision-making power in the hands of accountants.

Technology trends to watch out for

Forward-looking firms are also anticipating the impact of technological advances, with enormous potential. Big data, artificial intelligence and blockchain have the potential to provide real-time verification and audits of huge financial data sets – reducing error, and fees.

But the industry is moving and accountants are no longer expected to just analyse historic performance. Advice and insights are the least clients expect.

Cloud-based computing advances have created opportunities for accountants to access client and financial data at all times. Cloud-contained processing power is encouraging an expectation of faster, easier and cheaper services.

And the next level of internet speed will only magnify technological developments. The roll out of 5G across networks is anticipated to have wide-ranging implications.

According to assurance and audit partners Alessandro Miolo and Fabien Lussu at Deloitte Switzerland 5G could underpin the transmission of vast amounts of inventory data from drones to audit teams. The team expects that 5G will significantly encourage the disruption of traditional accounting business models.

Getting the basics right still matters to accountants

While future technology is on the horizon, procuring accounting software still has a foundation in reporting.

“For those new to accounting and running their own finances, we have found Xero to be a great option. It’s really end-user friendly, as there’s no “accountant jargon” to contend with. We love the advancement of working with sector-specific add-ons,” says Savill.

Along with Sage and QuickBooks, Xero’s cloud-based platform performs bookkeeping, profit and loss, and balance sheet record keeping, and there are many others out there on the market. The reporting outputs can be used for tax, corporate secretariat work and preparation of financial reporting.

Traditional Corporation Tax (CT) returns are also prepared from each platform’s bookkeeping system. A benefit for companies preparing accounts, Xero’s platform has specialised tools for FRS102 and FRS105 requirements. These tools feed into the CT filings and can also be used for accounts sent to Companies House.

Large scale automation is rolled out for regulatory reporting

HMRC’s Making Tax Digital (MTD) pushes businesses with £85,000 or more of taxable income into the digital space. VAT filings are mandatory on at least a quarterly basis, so large quantities of draft reports need to be churned out.

Reporting and regulatory software makes it easy for accountants to comply with new regulations. A boon, automation eliminates manual entries.

DNA Accountants looks after around 450 limited companies. The task at hand is one of volume, for both VAT and corporation tax filings. The firm is benefiting from having VAT and corporation tax inputs housed under a single platform.

“Before Xero Tax we were manually entering trial balances, from selected bookkeeping platforms to our then tax software, which was an incredibly onerous and time-consuming process. Xero and Xero Tax take this step out altogether saving us precious time and eliminating any chance of manual errors occurring,” said Gillian French, founder of DNA Accountants, in an email.

For accountants with many individual clients, auto-population of static data saves time. Special tax incentives and schemes are also accommodated on Sage’s 50cloud Accounts and QuickBooks.

“When dealing with our charity and NFP clients, we find that Sage 50 is ready (out of the box), both in terms of its interface terminology and fund reporting – plus it’s gift aid ready,” says Savill.

For construction industry clients on QuickBooks, Savill adds that, “construction businesses have the benefit of inbuilt CIS [construction industry scheme] modules, providing them with the ability to verify subcontractors, create monthly statements, and submit data to HMRC at the click of a button.

Increasing accessibility through the cloud

For the foreseeable future, cloud computing is bringing additional conveniences to a world disrupted by the pandemic.

The ability to access financial reporting data and results at any time is the new standard.  Xero, Sage, and QuickBooks all offer mobile phone and device applications.

“As cloud-based software, QuickBooks enables accountants to access their clients’ information for end of year reporting – anywhere, at any time,” said Ben Brown, head of engineering at Intuit QuickBooks, in an email. “This has been especially helpful the last few months when visiting client offices has been tricky and will remain important as working environments evolve.”

Ahead of regulatory submissions, client approvals are sought online allowing business to continue no matter what the circumstances.

“Using Xero Tax enabled us to continue serving our clients [during lockdown] because we no longer had to send out paper accounts for signing – it’s all done in the cloud,” adds French.

Integrations across business lines, platforms and more

Software providers are increasingly branching out from core accountancy reporting functionality.

In an interview, AIMS Accountants for Business says that “It won’t be just about accounts but will be about signing up to services. Even at our end of the market, for the smallest of businesses, it will be about continuing services [ in addition to core accounts] over the next five to six years. As additional taxes shift to digital, including CT, many of our clients will move away from Excel, and ask us to take on more than reporting.”

There is an expectation that accounting software packages will evolve and cater to additional operational needs. The trend in acquiring new business lines is already prevalent.

“Right now, a lot of the software packages they all do the same thing. There’s a lot of ‘me too’ out there. We expect to see software packages tying up with businesses with other technology, like photographic invoicing. We expect to see a lot more consolidation,” says AIMS Accountants for Business.

Pursuing an aggressive buying strategy over the last few years, Sage has acquired AutoEntry in 2016; Inacct in 2017; and last year, CakeHR and Fairsail. Unsurprisingly these integrated offerings cater to more business functions outside of accounting and regulatory reporting.

Introducing more automation and cloud-based services to manage people, Sage’s technology makes sense for growing businesses.

“My practice is growing really quickly so Sage was the only contender when choosing an end to end suite of tools all in the cloud; from data capture with AutoEntry, bookkeeping with Sage Accounting supported by integrated year end accounts, CT600 and personal tax services,” says Samantha Mitcham, SJCM Accountancy.

Alongside improving efficiency and operations, regulatory reporting software is an investment in people. This is true regardless of the software.

“As a client-focused business we have always taken a software agnostic approach, to enable us to handpick the best technological enhancements as they are developed and, ultimately, provide the best service and solutions to clients,” says Savill. “This requires significant investment in the training and development of our people, to ensure they remain at the cutting edge.”

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