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There’s still 1 big problem with MTD

With less than 30 days until HMRC’s Making Tax Digital (MTD) 1 April 2019 deadline, many accountants and bookkeepers in the UK are hard-pressed to think about much else. From this date, your clients with turnover above the current £85,000 VAT threshold (apart from a few niche exemptions) will be required to do two things:

  1. Maintain digital records
  2. Submit their VAT returns via MTD-compliant software

While some of the major accounting software vendors have shared helpful guides in the past to prepare for MTD (see: Xero’s, Intuit’s, and Sage’s), newer content is popping up to help firms that aren’t quite over the line yet:

But it’s easy to miss the forest for the trees

With firms placing so much focus on the ‘hard requirement’ of ensuring clients are MTD-compliant, important ‘soft’ elements of the transition can be neglected, placing both the firm and the client at risk.

We’ve previously covered the 3 roadblocks non-cloud clients have with MTD. While the great benefits of cloud accounting may be glaringly obvious to accountants and bookkeepers, the story can be profoundly different for some of your clients. Particularly those clients who haven’t proactively pushed for a transition to cloud accounting before, and even more so those that have resisted a recommendation to do so.

If you push these types of clients to undertake a shift to cloud to be MTD-compliant, without framing the benefits carefully, at best you risk frustrating them and at worst you face a huge opportunity loss for both your client and your firm.

What’s bothering non-cloud clients about shifting to cloud accounting?

The three most common ‘false negatives’ traditionally non-cloud clients focus on are:

  • Time cost - Every minute spent shifting from their current systems to cloud accounting software is perceived as unnecessary time spend.
  • Monetary cost - Any money spent shifting them from their current systems to cloud accounting software is perceived as a waste.
  • Fear of change - In their minds it’s simpler and safer to keep systems as they are, even if that means warts and all.

Without confidently addressing each of these three points when approaching your non-cloud clients and attempting to shift them to cloud to be MTD-compliant, you could harm your relationship with the client and lose the opportunity to drive the most value to their business.

Remember that cloud accounting is more than just the accounting system

Although the first step in shifting your client to cloud accounting is getting them set up on Xero, QuickBooks Online, Sage, etc., that’s only the beginning of the added value proposition. Leverage the benefits of your firm’s app stack. By making the shift to cloud accounting, your previously non-cloud clients gain access to cloud accounting apps, and you can bundle these into their transition to cloud to offer outstanding value.

Which apps should you bundle? Take a Pareto principle approach - that is, bundle the (proverbial) 20% of apps that deliver your clients 80% of the value. We highlighted the app categories that achieve this in a recent blog post. They are:

  • Automating client data input
  • Getting clients paid on time
  • Helping clients make strategic decisions

Our own cloud credit control software fits in that second category, and by bundling it into your non-cloud clients’ shift to cloud, you deliver them:

  1. Time savings - Not only does Chaser ensure your client’s business is consistently running a professional-level credit control function week in, week out, the average Chaser-empowered business saves 7.3 hours a week by switching away from their previous credit control processes.
  2. Cash flow boost - By ensuring a consistent, professional-level credit control function is in place, Chaser gets its average user’s invoices paid 16 days earlier, resulting in a cash flow boost of £4,400 per £100,000 of turnover.
  3. Instant, substantial, permanent improvements - The reality for your non-cloud clients is that MTD is coming, and the best way for them to be compliant is to shift to a cloud accounting system. By bundling in apps from the above categories, like Chaser, you get to drive more than just a compliance change in their business. You deliver them tangible improvements to their business, that will continue to benefit them in the months and years to come.

We spoke to BlueHub’s Matt Flanagan last year about firms leveraging apps as part of MTD. He said:

“By offering key apps, particularly Chaser, at the start of the MTD journey for these non-cloud clients, firms are giving themselves an excellent way to add value and make these clients sticky. You could even gain your firm new clients by pushing this narrative where other firms aren’t.”

If you’ve still got non-cloud clients to transition in time for MTD, we can help you make that pill easier for your clients to swallow. Email partner@chaserhq.com today and ask us about how Chaser can fit into your firm’s MTD strategy.

Header image modified from photo courtesy of Glenn Carstens-Peters via Unsplash.

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