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.