Visibility and the pressure to go green has been bubbling under for a few years now, but COP26, held in Glasgow, brought climate change to the top of the policy agenda. Now, there’s more awareness that everyone – accountants included – must make positive change. And what better way to get that message across than by appointing Alok Sharma – an accountant and member of ICAEW, as President for COP26?
We live in incredibly fast-moving times, and technology has the potential to not only increase efficiency for accountants – it can also help practices be more environmentally friendly at the same time. Not sure where to start on your journey to meeting both business and green goals? Follow our tips to set you on the right path.
Move to the cloud
Embracing core cloud accounting software, such as Xero, Quickbooks or Sage, and a suite of add-on tools increases accounting practices’ efficiency considerably. It allows them to leverage automation capabilities from day-to-day tasks related to bookkeeping and data entry.
This helps to drive down the cost of serving clients and increase the profitability of jobs by staff being more productive. Rather than being restricted to how many transactions they can complete by the hour, the output of accountants is instead measured by how efficiently they can set up software to take advantage of automation. For example, setting up rules to auto-match vendor-specific transactions minimises the manual intervention needed during bookkeeping within core software.
And moving to the cloud helps practices go green without them even realising it, as it markedly reduces the amount of paper they use. Wherever possible, accountants should get their clients to submit their data and documents electronically, and firms should submit accounts and statutory filings digitally as standard.
Receipt and invoice scanning tools, such as Dext or AutoEntry, also play a significant role in automating record-keeping – and they reduce the need for clients to provide a paper audit trail as a result. For best practice, firms should advise their clients to set up email forwarding addresses for supplier invoices so that accountants have direct access to documents – this will also allow data to flow seamlessly to receipt scanning tools. The additional benefit here is that bottlenecks related to chasing clients for supplier invoices will be relieved.
Help clients prepare for Making Tax Digital (MTD)
Another big step in the shift to digital is the government-mandated MTD initiative, which requires individuals and companies to maintain and submit their accounting records digitally. It tallies nicely with moving to the cloud – accountants benefit from efficiency gains, and the environment gets even more respite from reduced paper usage.
MTD for VAT was first introduced in April 2019 and has largely been successful, with over 11 million VAT returns now submitted via MTD. As we talked about in a previous blog, MTD for ITSA is now set to be introduced from April 2024.
Typically, the profiles of sole trader and partnership businesses are relatively simple. They tend to be heavily paper-based, and lag behind in tech adoption due to historically providing documentation to accountants once per year (often in a shoebox!) during the self-assessment period. MTD for ITSA will force these businesses to adopt cloud accounting software and update their records to make four submissions per year to HMRC – which in turn will help accountants further automate their processes and reduce overheads.
Work from home as standard
There’ll always be a place for the office for people to work and socialise face-to-face, but the pandemic has proved that it’s possible for accounting practices to work from home – with possibly even better productivity.
To further facilitate working from home, practices would benefit from adopting cloud and digital solutions to complete as many workflows as possible. For example, Modulr’s Payments Dashboard automates payroll and supplier pay runs for clients – payments can be made remotely and securely without needing to use physical banking devices to transact.
When combined with remote meeting solutions, such as Zoom, it should be easy for everyone in the practice to work effectively with clients, and to maintain visibility over tasks and deadlines – not to mention being able to onboard clients all over the UK (and internationally) to increase revenue. The added bonus is that working from home significantly reduces the carbon footprint of staff by reducing the commutes, and it takes the strain off the energy output of office spaces.