The changing practice landscape, the impact of MTD, investment into the cloud by the major software companies, and how AdvanceTrack® is helping support practices be fit for the future. The company’s founder Vipul Sheth talks to former Accountancy Age editor Kevin Reed about these key topics, and more

Vipul, what are the pressing issues for practices in the next 24 months?

Technology is the number one issue. Knowing which tech companies will be the winners – that’s a very big unknown. They have made a lot of investment, but we don’t know which will stand the test of time. I do think Xero and QuickBooks will be the two global cloud platforms… I can’t see Sage being there. Unless Sage come up with something amazing, they’re not in the game – as a Brit, I feel disappointed about that.

The profession is losing skilled staff through retirement and mergers, leaving a gap in experience and advisory skills. Younger staff like to use tech but are not always so proficient or experienced in client engagement – that’s not true of everybody, but many naturally communicate through devices. The next generation don’t always want to take the risk of running a firm, with the responsibility and financial exposure. Firms must consider how to provide work/life balance.

Back to tech-based communication: this will be ne for 90% of scenarios, but there will be an element of the client base that wants to engage, to meet up face-to-face. The next generation of practitioner needs to be able to ‘press the flesh’, and gain the confidence of the client in a one-to-one situation. As such, succession planning is an issue that’s never far away.

Is Making Tax Digital (MTD) the game-changer, and if so, why?

MTD is absolutely front and centre for everyone, but my view is ‘never let the government write your business plan’. Build a business that goes beyond dealing with numbers; build a business that clients feel they can’t do without.

MTD is concertinaing the time window to migrate people to the cloud to do things effectively. It’s important that MTD is making firms visit this – but they should look beyond it. The law will make us help clients be compliant, but what do you do with that information? MTD will ‘help’ you keep clients out of jail – but it won’t help you make more money. What will enable that is how you use that information to make clients run their business better.

What about longer-term for practices?

Everything comes down to client service. Moving to the cloud is an essential part of providing advisory services – keeping them compliant but using other tools to give better insight to what will be increasingly operational data. By offering clients insight, you can use data to justify where you are and what decisions you’re making.

There will continue to be a market for compliance business but, over time, technology and self-service will replace those firms – if that’s all you’re delivering to clients.

Automation and AI – what should practices consider with regards their strategy, and staff levels?

Our top clients have already started moving staff to client-facing roles. When they recruit people today, the type they recruit are those they think could be partners in 10-15 years’ time. If you have enough coming through with that skillset, you’ll automatically have in-built succession… practices forget they’re running businesses.

Tech is used in young people’s everyday lives. So practices must look at the range of skills they will need. You will rarely find someone that can be an accounting technician, fully IT-literate, can run a practice and serve clients. Teams will need to be built to cover the bases.

Is it tough for firms to serve clients while everything is changing so quickly around them?

Forward-thinking firms have a small group of people running change programmes. They’re the ones most successful at implementation, and some with non-accountants going into the technological change roles.

We all need to re-skill and keep developing. I’ve had several professional roles in my career, and am doing something very different to what I did 15 years ago. We must recognise that in ourselves, and also give people the time and framework to adapt.

What types of practice are impressing you, and why?

Some cloud-only firms are very impressive. They have no shackles, and are not wedded to a particular technology. Staff can work anywhere (which comes back to staff wanting work/life balance).

There are a handful of ‘traditional’ firms that have impressed me by having a big client and team base, looking after SMEs and using AdvanceTrack® and other technologies to service a much wider cross- section of clients than they would have in the past – regional practices operating on a national or international level.

Where does AdvanceTrack® fit into all this change?

We have been a tech-first supplier/provider to the profession. We will adopt tech that’s developed by third-parties, or develop our own. Where we have really continued to progress is our need to be efficient, particularly in collecting and processing data efficiently – to help our practice clients deliver an amazing service.

Off the back of MTD and the need to keep clients compliant, we’re able to give scalable bookkeeping solutions to practices and enable them to work with real-time data. This solution feeds into practices’ other advisory- led and insight services.

What do potential clients ask you about AdvanceTrack’s services, and what is your response?

The questions have hardly changed over the years! First, quality – how do you maintain it? How do you keep clients’ data secure?

Our biggest challenge is those in the industry that have offered bad service, which makes it much harder for practices to revisit the option of outsourcing.

Some clients have come to our offices. They want to ensure that if working with a provider, we’d also look after our staff when working on their projects – part of their due diligence is to visit our offices and ask our team members any questions they want.

AdvanceTrack client Wood and Disney is a two- director practice based in Colchester, Essex. The practice badges itself as ‘real-time accountants’, using cloud accounting technology to access client data in real-time – so it can provide proactive and timely advice. We spoke to operations director Brendon Howlett about how AdvanceTrack® has helped his practice develop.

Brendon, tell us about your practice

Peter Disney and I set the practice up in July 2013, and we head up a team of eight. We’ve been paperless for years – we love innovation – and won Most Innovative Practice (2-4 partner firm) in 2020’s Innovation Awards two years ago. We took the decision six months ago to focus solely on the cloud.

We use various cloud accounting packages, having taken the view that clients with paper bags of receipts, spreadsheets, hybrids are not the sort of clients we want. This is especially the case particularly when you consider Making Tax Digital, with four times a year reporting. Any client we take on, we say: “You have to be in the cloud.” We facilitate – all staff are Xero and QuickBooks certified advisers. There are training sessions for clients if needed, or we take on the bookkeeping as well, which is where AdvanceTrack® fits in.

When did you start using AdvanceTrack®, and why?

We’d seen [AdvanceTrack® founder] Vipul, had a good chat, then decided to use it as resource that will free up capacity. We commenced in June 2016. At the time, we couldn’t afford to give the client a competitive service to do the bookkeeping – we’d found a couple of bookkeepers locally, but they also reached capacity.

Our practice first outsourced accounts prep to AdvanceTrack®. It was a flexible arrangement at the start, but we loved it. We took it a step further with the bookkeeping.

What impact has AdvanceTrack® had on the running of your practice?

We had one client in London who was always last-minute on VAT returns, accounts ling, tax. We said: “This can’t go on.” They wanted to find someone to do the bookkeeping – we said that approach would cost them a lot and be an unknown quantity. They became our first client through AdvanceTrack®. We now have a weekly fee with the client, and we’re all happy.

That job, for example, runs itself. It frees up so much of our time from mundane historical data and getting it right – we’re now on top of it on a weekly basis.

Another example: a bank we speak to had a client that wanted a loan, but their accountant hadn’t sorted out their previous year-end data. We showed the bank examples of how we can keep up-to-date records, and now they’re our best friends.

What is the future for your practice? What are you looking to achieve, and how?

When the noise got louder on MTD, we took the view to write to all clients and say: “This is going to happen, how will you cope?” Part of the solution is to use cloud accounting and if we can get the data right at the basic level – we’re working with AdvanceTrack® to get that right – numbers can then be analysed. From good analysis, the client and us can make better decisions. This should lead to better results, giving our clients better businesses and all of us a better life.

I have had the good fortune to work for some great professional firms and people in my professional career.

In building the AdvanceTrack® business, I have taken the good things that I have learnt from these firms (and learnt from some that are not so good!). My early professional career, especially my training firm showed me the need to document the work performed, so that, whatever happened afterwards, there was an audit trail showing any person how we arrived at the numbers.

The biggest lesson that I learnt, especially in my career with two of the Big Four firms that I worked with, was the need to systemise the business. I used to recall how often, the partners in such firms were rarely at the “coalface”, yet the delivery to clients happened apace with the many good people in the rms. The key thing, however was that, in many ways, it didn’t matter which individual it was. It mattered more that the people in the organisation knew what they were required to do.

There were many times when colleagues left the firm and the team left behind thought it would be difficult to replace them. The team however, continued the good work, so it was very rare that clients moved firms following a key departure. This was solely down to a very robust process throughout the organisation.

So how do firms achieve this?

Whilst there are many things we could discuss, I will discuss 3 key elements:

Induction and Training

It cannot be stressed how important this is in your own office or a 3rd party provider like AdvanceTrack® to ensuring that the final outputs are more consistent. We have all experienced in various arenas, how improved training delivers better results. Our profession is no different, so it is extremely important.

Strong Management Protocol

If you consider the most successful business models around the world, whether in professional services, such as the Big Four in Accountancy, the Magic Circle in Law, or even McDonalds, the key to them all is their consistency of process, wherever they are in the world.

AdvanceTrack® for example, whilst not reaching the size of the above businesses really see consistency of process as being a key differentiator, allied with technology. Using robust processes that are subject to external review by BSI, such as achieving the ISO9001:2015 for Quality and ISO27001:2013 for Information Security allows AdvanceTrack® to manage work in a clear consistent manner.

Technology

All of the businesses above have used technology to drive efficiency and consistency through their businesses across the world. Technology is a great enabler and cloud technology is making it easier for businesses in many sectors to operate in the same way as global businesses, such as Big Four accountancy firms or Fast Food Chains. Technology is also a challenge to the traditional role of the accountant.

Accountancy firms have traditionally finished the bookkeeping when preparing the year end accounts. By clients using technology better, the value clients will place on putting together that final set of accounts is likely to be that much lower. As a result, you can see how more technologically agile firms (such as the Big Four) have moved up the advisory chain for many years. That capability moved into the high street, brings greater challenges to the high street accountancy rm. The key going forwards for accountancy firms will be to embrace the technology and to offer a more inclusive service.

What does that mean in practice?

  1. Firms need to offer a cloud based solution to clients.
  2. Offer a full bookkeeping service.
  3. Offering the full bookkeeping service enables firms to sell the additional consulting services that regular insight from the bookkeeping provides.
  4. Having access to this data will place the accountant into that trusted advisor space, yet also more able to fulfil the Making Tax Digital obligations that will come.

How can AdvanceTrack® help Accountancy firms deliver the service to clients:

  1. AdvanceTrack® are a technologically advanced outsourcing business, so they can help firms use their systems to deliver an efficient cost-effective bookkeeping service. AdvanceTrack® refer to this as their #seamlessbookkeeping service.
  2. This same technology will enable firms to keep their clients compliant with the Making Tax Digital regime when it is brought in.
  3. As a result of using AdvanceTrack® services, firms will be more streamlined in the way that they capture and process financial information.
  4. All of these are delivered at lower cost using technology and offshore delivery centres.

If your firm wants to lead the way in which it delivers a cost-effective pro-active service to clients, then it needs to review what services it offers and how it delivers them. If you see growth opportunities going forwards and are questioning how to meet them, the AdvanceTrack® team would love to talk to you.

It is interesting to observe the changes in the profession as a result of technology. As a technologically advanced accountancy outsourcer, we understand the changes and are driving the biggest changes in the profession. Cloud accounting is transformational.

What is surprising is that there are a significant proportion of firms who have yet to develop an integrated approach to cloud accounting and bookkeeping.

Receipt Bank contribute their thoughts on making bookkeeping pay for the professional firm. This is available to read on our website.

Many accounting firms have steered away from bookkeeping in the past due to the relatively low value and the large volume of paperwork. Consider how much work you passed to local bookkeepers in the past? Consider how inconsistent the quality of these bookkeepers has been over that time.

So what are your options today?

No change (The Do nothing strategy)

That is a strategy of sorts. The long-term impact of such a strategy is to reduce the long-term value of your practice, as few new entrepreneurs will buy your firm’s services if you don’t demonstrate cloud capability.

Half-baked cloud strategy (Partial cloud strategy)

There are many firms that fit this profile. Consider how many of you have clients that use Sage, Xero or QBO (and many others) and because your client has introduced you to them, you do support them, but it is almost accidental?

In this instance, you support anything as long as you win the client.

Full cloud strategy

This is where the firm has a clear strategy as to which products it will support and how they will transition appropriate clients to their chosen software products and how they will attract new clients using their expertise in the chosen products.

A truly professional outsourcer like AdvanceTrack® can deliver cost-effective and efficient delivery of bookkeeping and other compliance services. This strategy can also help deliver a cloud strategy faster than in-house staff.

Outsourcing should help you focus on what you do best – deliver better service and advice to your clients.

AdvanceTrack® is run by UK based ICAEW Chartered Accountants and are certified by BSI in the UK for ISO9001:2015 (Quality Management) and ISO27001:2013 (Information Security Management) and operating since 2003.

Call us today to arrange a meeting to help you develop and deliver your cloud strategy on +44 (0)24 7601 6308

“It is interesting to observe the changes in the profession as a result of technology. As a technologically advanced accountancy outsourcer, we understand the changes and are driving the biggest changes in the profession.”