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AI changing role for accountants

Artificial intelligence is affecting all sorts of industries, and accounting is no exception. Some accounting practices are starting to implement such advanced technology to streamline their operations. The general outcome that they are perceiving is saving time, reducing costs, increasing productivity and providing better accuracy. This means this is hardly a trend that will fade anytime soon, so it’s better to catch up with it now rather than later.

But there’s also the real possibility for job creation: new roles even the best technologists and futurists might not fully anticipate. To that end, Forrester Research also predicts the equivalent of 9% of jobs will be created by 2025, as well. Artificial intelligence systems can be very powerful and are improving quickly. They provide outputs that can be extremely accurate, replacing and, in some cases, far superseding human efforts. However, they do not replicate human intelligence. We need to recognise the strengths and limits of this different form of intelligence, and build understanding of the best ways for humans and computers to work together.

Although artificial intelligence techniques such as machine learning are not new, and the pace of change is fast, widespread adoption in business and accounting is still in early stages. To build a positive vision of the future, we need to develop a deep understanding of how artificial intelligence can solve accounting and business problems, the practical challenges and the skills accountants need to work alongside intelligent systems.

For more information contact us at info@stanleycarter.co.uk or check our website to see how we can take your business forward. www.stanleycarter.co.uk

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The risks of fraud in your business

Fraud is a real and growing problem for organisations and companies of all sizes. For SMEs, it can be catastrophic. According to the Annual Fraud Indicator 2016, the cost of fraud to the UK economy is £193bn a year and of course that is just the fraud we know about.

The danger of fraud if left undiscovered is that the perpetrator becomes emboldened in your company and it can repeat the behaviour. We have known situations where detection has taken five years or more by which time small amounts of expense fiddling have increased to large thefts with a real impact on the bottom line. Often it is a company’s auditor who spots irregularities but sometimes it can be an employee whistleblower or a change of manager who highlights a reason for suspicion. The only lesson for business managers is to be ever vigilant.

If you suspect fraud is taking place in your organisation and require expert advice please email us on info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk

 

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Your accountant role can be an asset to your business

Retail spending in the UK fell in October 2017 at the fastest pace for any October since 2008. This has been attributed by some to consumers curbing purchases of non-food goods in the face of rising inflation. In addition, there remains the prospect of a 4% business rate rise next year being confirmed in the Budget, which many have predicted could have serious consequences for investment and confidence. Either way, for many small businesses, and particularly smaller retail businesses, the outlook is uncertain and challenging.

At times like this, though, small business owners often look for those best positioned to provide business as well as financial advice. In the past, this may have been the bank manager or their local Business Link when was still operating, but times are, perhaps, beginning to change. In a recent online focus group with small business owners from around the country, when we asked who they would turn to for help and advice about running their business, more than half of our participants cited a small business organisation or network, but nearly a third also mentioned their accountant.

First and foremost your accountant’s role should be to keep your business meeting its financial obligations, whether that is paying appropriate income tax and National Insurance, ensuring you register for and keep track of VAT and paying corporation tax as a limited company, all of which can become increasingly complex and time consuming as your business grows unless managed efficiently. This process, for example, will likely include improving your record keeping so, for example, you can legitimately claim business expenses that can be used to reduce your profits and your tax liability.  Having some form of accounting software or some form of mechanism to keep up to date records of your financial affairs is a major step towards avoiding those sorts of issues. Your accountant will help you with this.  As your business grows and you become an employer, your accountant can look after payroll and even more advanced financial reporting whilst you focus on further growth.

This recognition that an accountant can be valuable for more than just the figures, though, is an interesting development. It points to the genuine contribution that an accountant can make in providing sound support, including general as well as financial guidance, that frees you up to concentrate on your core activity. The accountant’s position as a critical friend can be more than helpful. Moreover, with many small businesses likely to be using a small practice or an individual accountant, each of which is likely to be a small business themselves, owners seem to recognise that their accountant is likely to identify with many of the challenges they are facing or will have experienced them vicariously through the raft of other companies with which they work.

Whatever view you have of how the next few years will play out, one thing is certain and that is that nothing is certain! Now might be the time to find an accountant with whom you feel you can build a relationship and ask them discuss your short, medium and longer term hopes and plans. Ask them to explain how they could support you through the next phase in your business journey.

For for further information you can contact us on info@stanleycarter.co.uk or check our website www.stanleycarter.co.uk

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Global regulation for accountants

Global regulators want to shake up how corporate audit rules are written to curb the influence of accountants and avoid any conflict of interest.

Audit rules are currently written under the umbrella of the International Federation of Accountants (IFAC), a global body that represents a profession dominated by the “Big Four” – PwC, Deloitte, KPMG and EY – which also check the books of nearly all blue chip companies globally.  Regulators now want audit rulemakers who are independent of the accounting industry.  They aim to replicate a similar change made to accounting rules two decades ago that is now the benchmark for book-keeping in over 100 countries, and aim to have it in place by 2020.

IFAC said regular reviews of the standard setting process are in the public interest, and the current system already has many of the elements called for by the monitoring group.

If you have queries about this or any other accountancy related queries please emails us on info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk

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Cloud good or bad for Accountants?

In 2017, accountancy practices face many challenges that span the regulatory, economic, political and technology spheres. In particular, digital transformation has brought about rapid change, with accountancy practices needing to consider how to thrive in the digital age, and how to evolve their businesses to maintain pace with the digital revolution in the UK and beyond.

The majority of UK businesses are now leveraging technology to achieve business success. The adoption of cloud technology has almost doubled in the past seven years, according to a study by the Cloud Industry Forum (CIF), with 88% of businesses now using cloud services. In addition, as revealed by the CIF in March 2017, 67% of companies expect to increase their adoption of cloud services by March 2018.

So, why should accountancy practices prepare to move to the cloud, and what steps should they take to get there?

What to gain from the cloud

Digital transformation has had a significant impact on the accountancy industry. As technology enables “traditional” accounting bookkeeping services to be automated, accountants have been presented with an opportunity to transition to an advisory role, adding value to clients.

So, what are the benefits of moving your practice to the cloud?

 Improved efficiency

With the cloud comes efficiency. Technology allows accountants to automate repetitive tasks, saving time spent on paperwork. And the cloud also eliminates the need for spreadsheets as well as reducing the risk of manual errors, improving accuracy of data.

Increased accessibility

Data in the cloud can be shared with clients, colleagues, or anybody who needs access, at any point. It also provides accountants with the freedom to work remotely – all you need is an internet connection.

Improved decision-making

Accountants can leverage real-time information to help make informed decisions and provide strategic advice to clients. Whereas accountancy practices without cloud capabilities must often delay decision-making until end of year historical data is available, accountants on the cloud can make the right decisions quickly.

Streamlined systems

A paperless working environment is a key advantage for practices overrun by paper records. Cloud technology also offers a reliable storage system, with quick and efficient access to client and business data, all stored safely and securely with no danger of missing or lost files.

Before moving your clients to the cloud, become a true advocate of the technology by first moving your practice’s accounts to a cloud accounting system. This will enable you to use the system to interpret your own data first and adjust to the system before turning to client data. Become accustomed to the differences between your existing accounting set-up and the new services that the cloud technology offers, fully understanding the benefits that you can leverage to fulfil your clients’ advisory needs.

Finally, it’s important to identify the right clients to move to the cloud first. Young, tech-savvy and small companies are the ideal candidates. By beginning with business that don’t have stock control, custom requirements and a large number of transactions will make the transition smoother for your practice.

For further information about your accountancy needs send us an email on info@stanleycarter.co.uk or check our website www.stanleycarter.co.uk

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SME Bank accounts

Banks are looking for new revenue streams. Providing excellent service to SME customers is an opportunity often overlooked by banks. There are an estimated 4.7 million SMEs in the UK – accounting for 99.9% of private sector business. Can you afford to ignore this market?

Business customers don’t have time to fill out a time-consuming and complicated application and then wait days — or even weeks — to open a new bank account, or to repeatedly enter the same information into separate applications to obtain multiple products. If the process isn’t quick and easy from any device, customers simply decide to take their business to a bank that offers a more convenient and customer-friendly experience.

To date, banks have been unwilling to tailor their services to meet the specific needs of SMEs. By failing small business owners, banks are ignoring the opportunities of the lucrative business banking market. Large banks likely have upside available today for existing SME customers, adding a cross sell capability — to apply for additional credit, for example — would bring banks a significant upside.

The good news is anyone can adopt the best practices , proven by the success of top banks, to create a customer-focused acquisition and onboarding experience.

If you need help to open a business bank account email us your details to info@stanleycarter.co.uk or check our website for further details on www.stanleycarter.co.uk

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Self employed tax

Self-employed professionals and business owners (there are currently 4.7 million in the UK, according to the Office for National Statistic) may be tempted to spend freely and take as many deductions as possible in any given year, yet there are circumstances where it makes more sense to be more economical or defer deductions.

It’s important for the self-employed to know the rules.  Businesses must report all earned income and expenses. There are cases where businesses claim items that aren’t actually legitimately deductible.

Not only does that cause a problem if they’re audited by the tax man, it could also hurt their business when it comes to a sale, qualifying for a loan or making a retirement contribution based on taxable income. However, there are times where it makes sense to defer making purchases.

When you sell your business, you’ll likely be asked to give the potential buyer at least three years of tax returns. Many buyers rely on these net income numbers more than your accounting books, because so many expenses can be claimed in a sole proprietor business when you’re doing your end-of-year accounting. Loan companies will also look to your tax returns to assess your ability to repay a loan.

Small-business owners should be concern of their personal finances. Deductions lower business income, but that also hurts a business owner’s ability to qualify for other financial needs like a mortgage or a loan for new equipment or a van.

You may want defer expenses to the next reporting period because you are anticipating a large income item which will come in. The important thing when it comes to all tax decisions and opportunities is keeping good records.

But for further information about tax or self employment please contact us on info@stanleycarter.co.uk or check our website www.stanleycarter.co.uk

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Corporate governance guidelines and pension funds

Corporate governance concerns are increasingly on pension funds’ radars as they seek to improve practice at some of the world’s largest firms.

Yet, sometimes their voices can be drowned out at company board meetings by larger stakeholders who are sometimes majority shareholders.

To try and help, the Investment Association (IA) and ICSA: The Governance Institute, last month launched joint guidelines to improve companies’ engagement with their stakeholders.

The voluntary principles promote practices including identifying key stakeholders regularly, determining which should be engaged with directly, what expertise is needed in the boardroom, and that such engagement is appropriate.

At the heart of the guidance is a view that the relationship between companies and their stakeholders needs strengthening, especially in terms of value.

Particularly, it suggests an increased importance in making sure that stakeholder interests are borne in mind throughout the decision-making process.  Overall, the new guidelines could improve decision-making generally by providing a full picture to the process.

The guidelines over-arching aim is to ensure investors voices are heard in company boardrooms. Although voluntary, a drive to be better than their competitors could lead to greater engagement.

However, for best practice it may be necessary to introduce some stricter and compulsory rules.

For more information on corporate governance and to see how we can help please email us info@stanleycarter.co.uk

 

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Stock Exchanges – An engine for development

Stock exchanges already exert a certain amount of regulatory authority over listed companies. Whether this authority is granted explicitly by the government or established by industry guidelines and operational codes, exchanges routinely require companies to report on certain aspects of their operation in order to qualify for the capital-raising opportunities afforded by the market. These reports are mostly focused on good governance, but trends lately have tended towards other indicators, such as climate risk and gender parity. Some exchanges (in Brazil, India, and Hong Kong, for example) have built these ESG disclosures into their listing rules; others have issued non-binding ESG reporting guidance to their listed companies.

The world’s stock exchanges are also useful and scalable engagement platforms. Their position at the nexus of so many key players allows for enhanced and accelerated debate across the entire investment ecosystem.

The United Nations Conference on Trade and Development (UNCTAD) has collaborated with the World Federation of Exchanges (WFE) on a new report, titled The Role of Stock Exchanges in Fostering Economic Growth and Sustainable Development. The paper does exactly what its title implies, examining how stock exchanges can promote economic growth and sustainable development.

Their joint report was launched at the recent WFE Annual Meeting in Bangkok, Thailand. Introductory matter covers how modern stock exchanges really operate, and why they offer essential solutions to long-term economic problems. A fair amount of space is devoted to a key concept: exploring the symbiotic relationship between financial development and economic development. In other words, does the development of financial systems and tools simply follow economic signals, or does it actually drive economic development on a grand scale?

Some argue that the markets may not always serve as organic drivers of long-term economic development. A fair amount of blame for excessive short-termism and other potentially corrosive market impacts is laid at the feet of exchanges, where extra volume can mean extra revenues. Day trading, excessive speculation, and technology-assisted boom and bust trends may create a disconnect between the real and the financial economies, according to the report, resulting in a misallocation of capital and potentially destabilising economic consequences. But exchanges more than counterbalance this by increasing the ability of entrepreneurs, as well as more established corporations with expansion plans, to access the capital they need to grow their businesses.

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Accounting and Banking for small businesses

What would you do if your business bank account was your accounting software.  This is the concept of an accounting bank and this combination of accounting and banking is set to revolutionise how millions of entrepreneurs run their small business. It will simplify your business administration duties.

With the advent of cloud accounting software and API bank feeds, many small businesses increasingly use the bank statement as the primary source of their bookkeeping records. A bookkeeper typically imports all bank transactions into cloud accounting software and then goes through transaction by transaction explaining the account code, VAT rate and contact information.

This is a duplication of effort that is inefficient. For example, when you set up a payee in your bank account and make a payment out, you then repeat the same task in your accounting software, setting up a supplier and explaining the payment out.

For startups, setting up a new business current account takes time. In most cases it’s several long paper forms and about a month of back and forth with different bank reps. Even then the account may not be approved. The lack of a bank account when a business starts trading often creates a mess as personal accounts are used instead.

It is the businesses run on spreadsheets who are set to gain the most from an accounting bank. Making Tax Digital, HMRC’s transformation of tax, is set to cause these business owners a significant amount of pain over the next few years as they are forced to adopt digital systems to do online quarterly MTD filings for VAT, income tax and corporation tax.

So how does an accounting bank help solve all these problems?

With an accounting bank a small business can go about its day to day banking, a task they want to do. The accounting bank comes complete with a UK bank account number and sort code that can be opened within five minutes and not 30 days. Contactless Mastercard, faster payments, direct debits and BACS are all included.

The accounting is automated with transactions being automatically categorised as sales, travel, legal fees etc. No longer is there the need for back and forth between you and your accountant over a messy spreadsheet. In fact the bookkeeping is no longer a task that you need to do.

Accounting banks have MTD built in to let the business owner carry on with their banking as you always have done, for their accountant to make the MTD submissions seamlessly from the application.

You can create an invoice and when it’s paid it will automatically reconcile. You can view a profit and loss report or submit a VAT return. An accounting bank does everything you need to run your business.

Steve Jobs described creativity as connecting things and you need look no further than Tesla connecting cars and batteries or Sellotape connecting glue and cellophane to see how simple but obvious these solutions are. Think of an accounting bank as HSBC and Sage connected as one.

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