We look at why Businesses could do with Going Virtual with their Accountancy
Words by Mark Brooker
Starting up any new business in the current economy is a challenge. You may have an ingenious hook, a brilliant supplier and a brand strategy from heaven, but if you lack the infrastructure and industry know how to navigate the UK’s notoriously labyrinthine taxation system you’re in for trouble. One of the biggest burdens facing budding entrepreneurs is the sheer scale of learning the legal procedures of liability, taxation, accounting and employee/employer legislation.
Outsourced accountancy solutions have shaken up the traditional accounting industry, one that has always been structured around face to face contact. A little like visiting your GP, or going to confession. You give your virtual accountant the reins when it comes to tax and legislation whilst seeding the best of their insights as applicable.
But for many, handing all that paperwork over can be a leap in the dark. The benefit of not having to deal with a traditional accountant in person and the costly meetings, the awkward schedules, is obvious enough. But it’s a big step nonetheless, one that requires sufficient trust and convenience.
In some parts, outsourcing still has a bad reputation, but in essence:
To outsource is to delegate, it’s an act of trusting in another’s skills.
How do we let go of that niggling doubt that demands you meet with your accountant on a begrudgingly regular basis?
For the generation of entrepreneurs and SME’s brought up with Google, Apple and Facebook however, sharing information online with their accountant is as natural as online banking, and there’s a significant opportunity for accountants here too.
A survey from accountancy firm Sage found that 73% of accountants believe the use of online services will represent the biggest shift in their working practices over the next three years. (source: accaglobal.com)
So how can it help?
It’s cheaper and more streamlined: tax is strict, deeply bureaucratic and extremely important. Let's look at two examples.
48 per cent of SME employers said that taxation (including VAT, PAYE, NI and rates) was an obstacle to the success of their business.
Taxation can get in the way, it’s a minefield. That makes it imperative on SME’s to find the right tax solutions that don’t cripple them financially.
The most interesting part comes on page 102:
Fifty-nine per cent of SME employers in England and Wales that sought advice did so (mainly) because they wanted to better understand how to develop and grow the business (or exploit a business opportunity).
So, in other words, 59 per cent sought advice to help them expand, grow and diversify because they weren’t quite able to in their current state. That's where accountants are of vital importance, helping small businesses along their journey.
If nothing else, the studies show that SME’s are always on the lookout for insight and industry understanding. That thirst for expertise is what defines entrepreneurs and the place to find that expertise is accountancy.
Sources: acca.global.uk, Gov.uk