Some will think of accountants as the tax specialist that will take all business transactions and transform them into the finished article which shows how much the business has made and the taxes due. The taxes for a limited company are due to be filed and paid 9 months after the company’s yearend. As an example, for a financial year ending 31stMarch 2020, the Financial Statements and Tax liability need to be filed and paid by 31stDecember 2020. At the point the financials are produced, the data is out of date for key decisions the business may need. Imagine what could have been done if the 2019 data was available as it happened and not over a year later.
This is not as key for every business as some simply need their financial statements prepared, taxes calculated and filed but others can really do with more support. Unfortunately, this out-dated information can’t be used to provide the insight the business needs so they either survive without it or get it elsewhere.
This is where the new age accountants come into play with cloud accounting getting more popular. The accountant can help the business implement the right practices which will allow real time data to be made available. Imagine the opportunity for a business with quarterly goals to be able to receive the data that shows last quarter’s performance and the agreed targets for the coming quarter. These can even be monthly, to increase Revenue, Profits, Grow etc. A lot of businesses that went under because they just didn’t react quick enough or know what to change as a result of the lack of current insight into their business performance, will survive in today’s environment which is great for UK small businesses.
As to the traditional accounting compliance activity like bookkeeping, taxes etc. Cloud accounting software allows them to be performed much quicker and furthermore they are in line with HMRC’s drive to make tax digital.
We are experiencing an evolution of the relationship between the accountant and the small and tech ready business owners. The owners just need to make sure they are getting the correct support from their accountants and not make the same mistakes as businesses of the past.