We don’t need to tell you Making tax digital, or MTD, is coming. It’s been discussed over and over in the last few years. In the accountancy space, that is.
Your clients, however, might not be so clued up.
VAT-registered businesses with an annual turnover of over £85k are going to be required to use some form of software to keep their VAT records and file their VAT returns. To some, it may feel like another job for their ever-growing list. But what’s great is that it should, in theory, increase efficiency for you both. It mitigates the risk of growing backlogs of work.
Also, you’ll be seeing your clients more regularly.
This is a win for you, as you can start using this increased facetime to start offering more advisory style services. Adjustments to billing might be in order, as hourly billing might see your clients seek out cheaper firms.
This change is also likely to see clients ask for advice on what tech to start using to make this whole thing easier. You can steer them over to your software of choice, and therefore get them working in a way that’s easier for you.
But back to the order of business. How can you use Making tax digital as a segue to advisory?
Encourage your clients to get themselves on the cloud. Desktop software isn’t going to help you submit anything to HMRC with ease.
Plus, it’ll be a massive bonus if it can sync with their point of sale system. It’ll speed things up significantly. Or, if it’s more suitable, their inventory and time sheets systems. This, in turn, will give you more to talk about – and more time – when it comes to advisory.
QuickBooks has upped its game recently, launching their MTD-specific updates. Their new import tools make transferring invoices and bills quick and simple. They’ve even built bridging software into their platform. It gets the spreadsheets your clients might be using to convert nicely into the way HMRC needs to see your clients’ returns.
As we mentioned, you’ll be meeting with your clients more regularly. This is your chance to introduce the visibility over data you can provide for your clients.
Making tax digital means you’ll be submitted returns on a quarterly basis, therefore making contact with your clients around every three months.
Advisory services require frequent meetings or phone calls to keep up with the changes in your clients’ businesses. To be able to advise you need an intimate knowledge of the ins and outs of the company you’re working with.
The regularity of client meetings will increase once MTD kicks in. Therefore, your busy and quiet spells are going to plateau. There won’t be such disparity between the two.
You’re billing more regularly, so it will even out your firm’s cash flow. You might want to make the most of this and keep hold of your hourly billing. It’ll increase your bottom line if you remain in the compliance space.
But, to really integrate advisory, your pricing needs to evolve.
If you’re offering in-person sessions to complete VAT returns, consider charging for the compliance as a set fee, and bolt services like forecasting, management reporting and more.