This ship is sailing, whether you like it or not…
And by ship, I’m referring to Making Tax Digital.
You understand the general gist of what it’s about – by 2018 all businesses will have online tax accounts that are submitted on a quarterly basis.
This article is not about the technicalities of what that may or may not involve.
It’s about you making a decision…
And that’s a decision to sink or swim.
So you have a choice to make…
– You can choose to roll over, succumb to the growing pressures of the industry, scale down your practice, gradually being out-competed by the practices of 2017 and beyond.
– You can choose to embrace these changes and act now!
There’s a line in the sand, don’t read on any further until that decision has been made.
If the latter was your choice, then please keep reading…
Making Tax Digital will have a number of implications for the way you run your practice and the way you serve your clients.
And if you want to make a success of it, then there are a couple of points that need to be considered.
Here are 4 things that you need to consider in your practice right now:
1. Creating Systems
If you’re too busy to build good systems, then you’ll always be too busy!
And if you want to make Making Tax Digital a success in your practice, then you’re going to need good systems in place to cope with it…
If you don’t have good systems in place, then you and your team will do all of the heavy lifting, working up a sweat, gradually burning out.
But with good systems in place, they will do the heavy lifting for you!
So what systems do you need? Here are a couple of suggestions:
– Getting all clients on to the cloud: If you haven’t already done this, then you need to make this a priority! Although Making Tax Digital doesn’t require your clients to be on the cloud (desktop software and spreadsheets can also be used) having the information readily available and up to date in cloud software will make your job much easier.
– Training staff: It’s important that all of your team are aware of the changes and the implications they will have for the way your practice runs. Look at creating systems for training your existing team (and future employees) on how things might be done differently going forwards.
– Training clients: This is equally as important as the point above. Your clients will also need to be trained on what to expect and how this might affect them. See the section below ‘notifying clients’ for more in-depth information.
– Managing workflow: Making Tax Digital will lead to increased workload for your team, which could possibly worsen any existing workflow issues you have. Look at creating systems or implementing technology e.g. mTrio, to help manage this better!
The list above isn’t exhaustive by any means, but it’s a starting point.
Sit down with your team and figure out exactly what needs systemising in the practice right now, to make it easier down the line.
2. Notifying Clients
This is one of the most important things to consider in your Making Tax Digital strategy.
Get it right, and you’ll keep your clients smiling.
Get it wrong, and risk losing your clients to a better-prepared practice.
Your clients are going to be worried – it’s only natural. It’s your job to keep them calm and make sure that they know they can trust you and rely on you.
It’s imperative that you communicate with your clients openly, and consistently throughout the transition period over the next 12-18 months.
The time to act is now.
Don’t wait another 6 months and risk them hearing misleading information online or from other sources. Make a point to contact all of your affected clients right now and tell them what you know.
Here are a couple of ways you can start to communicate with your clients:
– Seminars: Speaking one-to-many is much less time intensive than speaking with each of your clients one to one. Organise a series of seminars for your clients (and prospects – see marketing section) to keep them up to date with the latest information from HMRC and what you plan to do to help them.
– Bespoke Action Plans: For each of your clients (or perhaps just your A and B clients) have your team create them a bespoke action plan showing exactly how the changes might affect their business. Then bring them in for a 1:1 meeting to discuss the action plan and any questions that might arise.
– Infographics: These are great ways to present lots of facts, stats, and information in an easy to digest visual format. They can be posted on your site, send via email or even printed and turned into posters for your offices.
– Social Media: Send the message out that you’re aware of the changes, and that you’re taking all the necessary steps to safeguard your client’s interests and to make the transition as easy as possible for them. (Will also work well for Marketing).
The list above is just a starting point (although if you were doing all of those you’d be in a pretty good position). Again, sit down with your team and figure out what will work best for your clients.
Pricing is something that you need to get right first time round.
Making Tax Digital will inevitably mean much higher workload for practices.
And with this increased workload should come an additional/increased fee.
If you price too low – you risk writing off all the additional time spent on the work.
If you price too high – you risk your clients leaving for lower priced competition.
The success of your pricing strategy will ultimately come down to how it’s positioned.
By positioning your new Making Tax Digital offering as a ‘value add’ service, you make it possible to use fixed/value pricing to charge a higher fee and avoid any possible write-offs.
Alternatively, going down the route of hourly billing will only promote further inefficiencies and greatly increase the chance of money being written off.
Not only do you want to educate your existing clients, you also need to educate your potential prospects that you are the right accountant for them.
Many practices will be unable to cope with these upcoming changes and, as a result, large numbers of their clients will have to start looking elsewhere.
It’s your job now to position yourself as their best option for the future. And if you don’t act now, other practices will.
Here are a couple of ways you can achieve this:
– Gated Content/Lead Magnet: This is where you create a piece of content and have it available to download on a landing page. If prospects want to read it, then they need to opt-in to your email list. The bigger the bait you use here, the more fish you will catch. You can then follow up with these prospects using some of the methods below.
– Seminars: Like I mentioned above, these are a great way of delivering one message to a large number of people. Position yourself as an expert and begin to nurture prospects so that when the time is right, they’re knocking on your door to sign up. (Running webinars is another great method of achieving the same thing here).
– Videos: Consider recording weekly or monthly video tips to keep prospects up to date with the latest news from HMRC and to educate them about your practice, and how you plan on dealing with these changes. These can then be uploaded online, posted on your website or emailed out to an email list. (If being on camera isn’t your thing, then see Blogs/Articles below).
– Blogs/Articles: The content can remain relatively similar to the video option above. Create some blog posts/written articles and share them across your different channels e.g. website, Linkedin etc. The key to success here is consistency. Choose a rhythm (once a week, once a month) and stick to it.
Similar to the points I made above, these are just a couple of ideas that might work. It’s down to you and your team to figure out exactly what will work best for your practice.
“A good plan violently executed now is better than a perfect plan next week” – George S. Patton
There’s no such thing as a perfect plan.
You could spend the next 12-18 months attempting to create a ‘perfect plan’, but when the time arrives for you to execute it, it will already be too late.
If you want to make a success of Making Tax Digital and thrive in 2017 and beyond, then you need to act now.
Sit down with your team, sit down with your clients, and figure out exactly what can be done now to set you up with the best chance of success.
This ship is sailing, don’t let it sail without you.