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We are officially in the era of digital transformation where technology has greatly impacted audit processes. This has ushered changes that were hard to imagine as possible about a decade back. While the accounting profession has by and large embraced technology in various processes, it was restricted to the documentation, calculation, stor age and retrieval process. However, this is all set to change as cutting-edge technology dons a greater role in auditing. The clamour for different reporting and financial statements has been growing, and technology has all the right answersv. Taking a leaf out of fintech companies for development of intelligent software Bookkeeping outsourcing company in uk. Processes that will be touched by technology will include those areas where it may be necessary for a machine to understand and use that knowledge to identify complex information. Fintech companies have been able to deploy automated solutions by leveraging the power of AI and machine learning. Auditing will similarly find a greater role for technology, beyond the present functions. For instance, technology has developed to a level where it is possible for AI powered systems to look at all the data of a company that is being audited and identify anything that is amiss. This will help auditors to turn their focus to flagged areas that need more of their attention. Evolving reporting requirements Bookkeeping outsourcing company Present audit reporting helps investors and shareholders understand the financial health of businesses. However, in the context of a data driven world with more and more information available, there is an increasing chorus for auditors to share additional information. Stakeholders are of the opinion that auditors possess more information, than what is actually reflected in the reports. And the demand is for more contextual information from auditors about how a specific conclusion was made or arrive at. Readers want to know how the auditors arrived at a conclusion. This open the floodgates of confusion. Auditors crunch numbers and make conclusions, expecting a reader to do the same is an invitation to chaos. However, technology has the ability to present relevant information in the right form for dissemination, that is in alignment with the overall findings/conclusion. Impact of revisions and penalties corporate secretarial services in ukThe Financial Reporting Council released revisions to International Standards on Auditing (UK)[1], which had more to do with the Code of Ethics. This has great significance for auditors and by extension the companies that are being audited. The changed standards, despite being limited in scope can have implications for stakeholders. This needs to be read in the context of the fines levied by the FRC, on some of the top global auditing firms for misconduct. Even as the dust began to settle over the fines and the circumstances surrounding it, most of the iconic and respected auditing firms commenced an overhaul of their systems and processes, bringing in more technology driven processes to strengthen existing processes. This will be the order of the future, as auditors look towards technology for greater compliance. Moving from sample testing to testing of all transactions In the future, auditors will harness technology to carry out checks of all transactions, and not just rely on a sampling or random check of transactions. While the certainly humungous volumes of transactions may have come in the way of checking out all the transactions in the past or the present, this is all set to change. With the use of the right technology, not only will all transactions be checked, they will be completed at high speed, which means that the process of checking will not add to the time element. And this aspect of checking all the transactions will help auditors to gain more insights about the financial health and other inputs about the organization and the domain it operates. This will be invaluable to investors and shareholders who will now be able to understand reports on the basis of checking all transactions and not just a sample. Sampling has a probability of error, which will be corrected in the future. The need for speed The new techno-social order has turned time on its head. Processes that once took a specific period of time has now been shortened drastically. As a consequence, all other allied processes and procedures are also expected to commence/conclude at proportionate speed. Effectively, this has led to a cascading effect. Audit, resultantly, requires to be concluded faster than ever before. Manual processes do not stand a chance of delivering results at speed or with the accuracy and precision required. While it is impossible for technology, as it stands now, to replace the power of human intuition in tasks as complicated as auditing, many of the tasks that are repetitive or rote in nature need to be entrusted to technology and automated processes to be able to meet the deadlines. Leveraging the power of blockchain for cost effective audit processes Blockchain is the buzzword that will continue to hold sway over businesses well into the near future. And by virtue of being a distributed ledger, blockchain is the natural bedfellow for auditing processes. Auditors need not seek information or wait for clients or third parties to furnish statements, or any documents for verification and cross-verification. Auditors can simply carry out the verifications from blockchain ledgers. With the power of offering verifiable and immutable transactional information, these ledgers will save a lot of time and money, in addition to the assurance of offering information that is accurate and free from errors. This is basically, because the transactions themselves would have been carried out only after fulfilling the criteria or conditions of all –parties involved in the transaction. Analytics only as good as the data that is fed Analytics can be only as good as the data that is fed, which means that standards also need to improve so as to offer data that is of the right standard. While systems will be powered to detect anomalies over entire transaction history, the advantage of perception that is available to the human mind and the logic of perspective will be unavailable to technology driven systems. This will make it mandatory for records to conform to certain standards. The quality of the data and the processes or technology that is available to bring in the data from many sources needs to be advanced so as to prevent gaps in data capture and its use. The need for more regulations and standards Past processes had stakeholders trying to catch up with the regulations and standards. For instance, auditors and organisations had to fulfill or meet the standards and regulations as laid down and the need of the hour used to be a scramble to meet the standards. However, with changes in the way business is conducted, there are multiple issues which cannot be met or fulfilled by existing standards. This turns the whole equation of regulations and standards on its head. Regulations and standards are now expected to keep pace with the developments and evolving changes in the world of business. Till the regulations and changes are in place, auditors and businesses will have to work within the contours of existing regulations which may not be very easy considering the inherent differences among domains. Conclusion: Auditing is a proven facilitator for growth, in addition to meeting the requirements of accounting and financial reporting. While nations have their own set of policies about the size of businesses that need to be audited or not audited, it is a proven fact that auditing is one of the pillars of growth of a business. Technological innovations will assist the acumen of humans to bring about greater accuracy, improved reporting and faster conclusion. Auditing will not be limited to random checks but will encompass the whole history of transactions for specific periods. Contrary to popular belief, technology will not take the place of humans, but will help humans in their deliverables.

When is the Self-Assessment tax deadline for 2018?

The deadline for filing the online Self- Assessment tax return for the tax year ending 5 April 2018 is midnight on 31st January 2019. There are other deadlines as well which tax-payers have to keep in mind so that unnecessary penalties won’t be incurred. A self-employed person or a person earning income from personal property will have to file their online tax return by 31st January of every year. Those who miss these deadlines will have to deal with fines and the worst part is, they keep piling up with delay.People have to be vigilant of this fact and pay off their taxes well before the deadline. Or they can take help of an accountancy outsourcing services provider to outsourced bookkeeping services and to take care of tax returns outsourcing.

 

 

The previous tax year ended on 5 April 2018. For any untaxed income earned during the 2017-18 accounting year, the deadline for filing Self-Assessment tax return is midnight of 31 January 2019. The next online deadline will creep around before anyone realizes, so it is important to be prepared with the dates.  Here are some of the important dates: 

  1. 31st July 2018: This is the deadline for payers to make the second ‘payment on account’ installment to HMRC. This will only be applicable if a person is self-employed during the 2016-17 tax year and a tax amount of over 1000 pounds is owed when the tax return was submitted.  
  1. 5 October 2018: This is the deadline for self-employed persons to inform HMRC that they are self-employed, so they are aware of when they have to file the tax return the following year. The process does not have to be repeated if one is already registered as self-employed. 
  1. 31 October 2018: This is the Self-Assessment deadline for the tax year 2017-18 if one wants to file a paper return rather than filing it online. However, most businesses find it easier to file their returns online. Under the government’s new Making Tax Digital plans, filing paper returns may not be an option anymore. 
  1. 30th December: It is the deadline for filing the tax return when one wants the tax owed to be collected through PAYE via the tax code. This is only an option is one has already has income that has already been taxed through PAYE. It is applicable if one is employed or self-employed and if the Self-Assessment tax bill for 2017-18 is 3000 pounds and the bill has not been settled yet. 

If one continues earning untaxed income from 6th April 2018, it will fall into the category of the tax year 2018-19 which ends on 5th April 2018-19. The deadline for filing the 2018-19 Self-Assessment tax return will be midnight on 21 January 2020. Taxpayers should keep an eye on Making Tax Digital announcements in the case there are any developments. 

 

Taxpayers should start thinking about their tax return as soon as they start earning money. It is a good idea to open a business bank account to keep personal and business accounts separate and to maintain receipts for all deductible expenses. Nowadays it has become much easier to use an app or an online spreadsheet to keep track of income earned. This will help with organization and make everything more streamlined when the time comes to file the tax return. 

 

Website: outbooks.co.uk

How accountants and accountancy firms can make their Tax season more profitable and productive? 

Any firm, no matter how big or small it is, is always competitively determined by its efficiency, its ability to differentiate between competitors and the capacity to recruit and retain suitable personnel. With new technology and technological developments being churned out every day, even small to mid-size firms can increase productivity without losing money. Accountant outsourcing is another way to derive productivity.

 

Accountants in a small to mid-size firm can make their way up the compensation scale without making any changes to the size of the firm. Accounting firms can leverage technology to their advantage, increasing productivity and profits in the process. 

 

Tax returns are very exhaustive and ensuring an error free self-assessments tax return outsourcing is compiled can be a daunting task. With firms cutting down on manpower with automation and multi-tasking, handling this herculean task becomes further difficult. Accountants are under immense pressure due to high client expectations and managing this monotonous, yet critical task is difficult. Efficiency is what is at stake here, as a result of which accountants have to deliver results.  

 

How Technology has helped accountants become more productive 

Technology has helped smoothen operations and made work easier for accountants. A lot of firms are moving towards the digital space and utilizing digital workflows, bookkeeping company in uk. Cloud particularly has been useful in the areas of tax preparation, compliance and workflow processes as multiple members can access the work from anywhere or work on it at the same time. 

 

Using cloud, firms can reduce their initial costs as opposed to the high costs incurred using traditional software. Accountants have open access to a client’s data at all times. This makes it easier for them to work, without any interruptions and backlogs. A noteworthy feature of this technology is that it is maintained by the host vendor with a disaster recovery system built-in, so that it gives more incentive to accountants to focus on their expertise. Data entry and information are brought together in one place. This provides for easier access. A special portal allows clients and accountants to upload files and communicate with each other. This reliability and productivity in turn, ensures added value for the client. 

 

The role of digitalization  

Firms can stand apart from the rest by using social media effectively. The main ingredient in the formula to reap more profits is differentiation using social media and immersive online content. Firms can be successful if they have a strong online presence. This can be achieved by creating and maintaining attractive websites and social media pages. It is a requisite for firms to have an interface to update relevant information and actively connect with clients. It becomes easier for firms to establish themselves this way. If a firm does not have a social media presence, then the client might have to research about it multiple times before settling for its services. This has in many instances, lowered the reputation of firms. It is not necessary that only large firms enjoy social media exposure. Even small and mid-range firms can distinguish themselves by frequently posting on social media. It all boils down to how each firm is able to build an authentic relationship with their clients. 

The most important rule firms have to follow is to earn the trust of their clients. It is not enough that they have colorful websites and snazzy social media posts. Clients need to be satisfied with the services rendered to them. The biggest mistake firms can commit is losing the faith clients have in them. This will be detrimental to their long-term success. Firms have to be dynamic in order to taste success and that comes with careful planning and resourcefulness.  

 

Website: outbooks.co.uk 

 

Why are Accountants in demand in 2018? 

 

There is a huge surge of jobs for accountants across the UK and many firms are resorting to accounts outsourcing and external contractors to meet their various needs.  Accountancy has entered a new dimension in the first-quarter of 2018 with a lot of firms searching to include audit, advisory and tax, and self-assessment tax return to their services. This has created a lot of job vacancies in the sector all over the country and has equally provided opportunities for tax outsourcing services.  Newly qualified candidates have a variety of appealing positions to choose from and the job market is opening its doors wide open for them. There are many choices ranging from commercial sector services to financial services. The increase in advisory and project services has created opportunities for employees to hone and advance their skills. 

 

Audit partners and HR directors who need qualified personnel for the upcoming accounting season have to expect a challenging recruitment process ahead of them. Competition remains as cut-throat as ever and firms cannot afford to be under-staffed. Recruiters have to be mindful of this fact and carefully select from among the available candidates, those who have the specific skills and expertise required to perform the jobs. Most of the time, conditional offers are issued after the candidate clears the interview and this is based on the successful completion of the written exam. 

 

Outsourcing continues to be on the rise, with a significant increase in the number of jobs registered during the first quarter. Earlier, these positions were occupied at the home front, but nowadays specialization and diversification have come into play. Firms and companies are choosing to perform work only in their core competency areas and majority of the other work is being outsourced to firms specializing in them bookkeeping company in uk. Accountancy work in companies is completed externally by accounting firms who need competent professionals to meet all the demands. 

 

The software arena has experienced game-changing innovation with the introduction of cloud computing tools. The use of these tools has become highly popular. Those who are skilled in the use of these tools and the areas of the software will be in huge demand. Good and sound knowledge of Xero, QuickBooks and Sage Business Cloud will put candidates at an advantage. 

 

A major problem the industry is facing this year is the restrictions placed on the non-EU workers securing roles which are under sponsorship in UK firms. In the past years, many areas struggled with the dearth of staff and these gaps were filled by non-EU workers. The reason for this is that, under the current system, there is an annual cap of 20,700 restricted sponsorship certificates available to sponsor non-EU workers. This cap has been divided unequally among the workers and there aren’t enough roles for everyone, hence the restrictions have been imposed. 

 

The Big Four firms are expected to increase their recruitment for the next quarter and managers will finalise their staffing members for 2018 and 2019. A significant challenge for the group of clients could be the on-boarding of candidates requiring the sponsorships. With respect to other markets which need candidates, the industry will continue availing the services of professional contractors until recruitment is completed. The need for accounting and outsourcing professionals will continue to rise throughout 2018. Job seekers must keep in mind two things: work culture and job benefits.

 

 

Job benefits are comforts designed for more efficient performance such as flexible work timings and the option to work from home. It is important for employers to offer and provide both. 

 

Website: outbooks.co.uk 

 

 

Why accounting firms need an outsourcing partner during tax season?   

 

Outsourcing services during tax season help firms of all sizes.  Firms can cut costs up to 60 percent by substituting in-house workers with professionals who are trained for the job. Firms are constantly challenged with balancing the completion of conflicting tasks like bookkeeping and accounting. Due to this they need all the help they can get when the tax season arrives. The more tactical, administrative functions are time-consuming and complicated. This is why firms find it necessary to hire specialists to handle one of their yearly obligations: that is the filing of tax returns. Firms do not have the manpower or time to go over their books and calculate this amount which is why they don’t mind spending a little extra to fulfill this task. Partnering with a reputed accounting and bookkeeping outsourcing company is all the better as firms can be assured of quality service. 

 

There are many plus points to outsourcing this task. They are: 

 

Firms can increase their morale and productivity by reducing long working hours and weekend staffing requirements. 

 

It helps reduce peak season overtime costs. 

 

Firms can shift their focus to their core competency areas and leave the other work to trained professionals. 

 

The professionals will convert the variable cost of tax preparation to a fixed cost. 

 

It will lead to improvement in document management processes. 

 

Partnering with a provider of bookkeeping and accounting services will help them manage the heavy workload of tax season as they will utilize the expertise of specialists engaged for the purpose. 

 

There will not be any requirement for heavy investment in permanent staffing as the specialists are hired on a temporary basis just to complete the task. 

 

They will deliver unique and customized services based on the firm’s tax requirements. 

 

The experts save the clients from tax filing penalties by giving them an accurate result of the existing cash flow, self-assesment  returns outsourcing. 

 

When considering outsourcing partners, firms have to make sure the data of their clients is in safe hands. Before availing any outsourcing service, firms have to ensure that the outsourcing firm maintains a comprehensive non-disclosure agreement. The outsourcing partner has to come equipped with a fully trained staff, possessing extensive knowledge and essential training on all federal and state tax laws. A high-level final review process also has to be submitted by them. 

 

The technology used by the outsourcing firm makes all the difference.  A benefit of outsourcing is the ability to leverage the technology investment of the outsourcing provider. Most of the outsourcing providers have migrated to a cloud-based platform which facilitates the provider to share their technology investment with the clients. A good provider will use the latest and most effective technology and manage upgrades when needed. Outbooks is the best accounting and bookkeeping company in the UK. The data security measures set up by the provider have to be comprehensive and powerful as the operational infrastructure relies heavily on the technology infrastructure. 

 

Outsourcing providers are the best examples for model business practices and process optimization. Efficiency is directly proportional to profitability and leveraging skilled professionals to manage and execute tasks will lead to increased productivity and profitability. It is also highly cost-effective in the long-run when considering the bigger picture. If the outsourcing provider can provide a service more cost-effectively than the in-house staff it will allow the firm to focus on its more important, income-generating activities. 

 

Website: outbooks.co.uk

 

 

GDPR and accounts outsourcing: consequences of working with a non-compliant partner   

 

 

Within hours of GDPR taking effect, Google, Facebook, Instagram and WhatsApp were facing the prospect of being fined to the tune of $ 9.3 billion. It is hard to imagine that the tech giants had fallen foul of the data protection regime. This brings the spotlight on organizations that deal with data of EU entities. Regardless of the location of companies, the privacy law can impose penalties in either of the two tiers.  Before we take a look at the implications of working with a non-compliant partner for outsourced bookkeeping services, let’s first look at the relevant provisions and definitions of the GDPR regime. 

 

Data controllers – any business or organization that holds EU data, becomes a data controller. This effectively means that an organization that outsources any task to a third party, will be deemed to be a data controller if the task comprised EU data in any form. It is important to note that this will apply to any company regardless of its location. 

 

Data processors – any business or organization that processes EU data will be deemed to be a data processor, regardless of location. An interpretation of this definition means that all third parties that function as outsourced bookkeeping services, and handling the data of EU entities, will fall into the category of data processors. 

  

Responsibility of data controllers 

The regime clearly specifies the data controllers need to rely on the services of only those outsourced accounting companies (read data processors) that are fully compliant with the various provisions of the GDPR act. In other words, the onus of responsibility of ensuring compliance of the outsourced accounting companies (data processor) lies with the data controller. This effectively means that non-compliance by the data processor will also have implications on the data controller and the liability will rest on the data controller also, tax returns outsourcing. 

 

Extent of penalties 

The two levels of fines that can be imposed on entities – both data controllers and data processors are – 2% or €10 million/4% or 20 millions of total worldwide revenue of previous financial year, whichever is higher. The levels of fines are determined by the nature of violation of the GDPR act. Negligence is on the lower end of the threshold for fines while willful intentions are on the higher end of the threshold. 

  

  

Direct implications of dealing with a non-compliant outsourcing partner 

  

Penalties 

The most direct implication of dealing with a non-compliant partner is the penalties that may be payable in the event of a violation by the data processor (in this case the outsourcing partner). As mentioned earlier, the data controller (organization outsourcing the task), will also be held liable for the actions of the outsourcing partner. Irrespective of the level of fines, it is important to note that a 2% or 4% penalty on the worldwide turnover can be debilitating. 

 

Client confidence 

The imposition of a penalty under the GDPR act will shake the confidence of clients.  In an era of heightened competition, it is hard to imagine a company covering lost ground after having lost its reputation. Clients will certainly not look forward to the prospect of dealing with a company that is compromised on data security, either directly or indirectly. Additionally, clients would certainly not want to find themselves or their operations embroiled in the various processes that may arise as a result of the penalties. 

 

Impact on routine processes 

The impact of routine processes will be the indirect implications of non compliance with the GDPR act. For instance, a company that has been deemed to be in violation of the GDPR act will have to temporary suspend operations till the processes are set right. This disruption in operations will not only affect the company but will have an impact on the clients.  And clients will never be comfortable with the idea of having to sit out the suspension of operations till processes are set right. 

 

Will location of data processors make a difference? 

Contrary to perceptions that the location of financial accounting outsourcing services will have a bearing on the compliance, it is a fact that the processes will be the only governing factor.  For instance, a company may outsource to an outsourcing partner in the EU and still be fined, if the partner is not compliant with the regulations. A partner working out of a non-EU nation may be fully complaint and consequently may not attract any penalties. It is therefore the processes that matter and not the location of the financial accountancy outsourcing services. 

 

Potential intangible effects of penalties 

An organization that has been levied a fine due to the non-complaints of outsourcing partner, will find itself looking up at a steep increase in insurance premiums. Combined with the effect of disruptions in operations, and possible attrition rate of clients, this could deal a debilitating blow to operations. Companies need to therefore carefully consider the capabilities and compliance aspect of outsourcing partners. 

 

Compliance audit of partners to prove mitigating circumstances 

Organizations and companies that outsource tasks need to carry out a comprehensive compliance audit of partners. This will ensure that the Damocles sword of fines will not hang over the data processor or data controller. By insisting on compliance audit, organizations can preempt it disaster in addition to proving mitigating circumstances. Mitigating circumstances have an impact on the levy of penalties. The 2% and 4% calculations are the upper threshold of the fine. By proving intent to stay compliant organizations can ensure that they are not fined heavily. 

  

Organizations and companies need to have a robust system in place that will report an incident immediately to the relevant authority. These aspects need to be fully understood and followed to prevent adverse impact on operations. The primary responsibility of an organization that relies on an offshore entity is to ensure that the entity is compliant. In addition to this, it is necessary that resources are tasked with dual responsibilities – discharging the role of a data protection officer. 

BY: AMIT AGARWAL 

 

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Outbooks-Brexit poised for a positive impact on the accountancy profession   

 

When the formal announcement came that the United Kingdom had voted its departure from the European Union (EU), there have been several components of the UK business scope that were shocked, and not the least of them was the accountancy firms. The Brexit decision carries a straightforward link to the accounting industry and the various dimensions in which UK accounting businesses can function in the long run. This is not really a case where we can say that everything about it is unacceptable. 

  

One particular aspect that will manifest itself as the companies formally disjoint from the EU is that businesses will start reviewing their choices to decide on the suppliers and could even move forward in forging better deals than what they had in place before. Moreover, they may push towards expanding their own lines to fulfill the prospects of the new demand for goods and products made in UK. 

 

According to a study commissioned by the AAT and ACCA, almost as half of the MPs voiced their affirmation on the imminent positive impact of Brexit on accounting firms. 47% of the MPs asserted that Brexit would be favourable and gain an approving headway as accountants would be in a position to advise their clients on the ramifications involved in getting out of the EU. Only 23% were of the opinion that Brexit does not really put forward an encouraging opportunity for accountancy while the rest 25% remained inconclusive. 

  

The survey also revealed that 55% of the MPs were convinced that the EU tax legislation needed to be reviewed right away, instead of waiting for Brexit to materialize. Only 18% of the MPs contradicted. 

  

The study reflected the confidence among the MPs about the possibilities of the accountants rising to the challenges brought forth to business by the unpredictability that ensued because of Brexit. But it is further vital to understand that politicians acknowledge the merits which the accountancy profession can bring about to the UK economy as it sets foot in one of its most significant periods of economic transformation. 

  

The impact of Brexit on accounting IFRS appears to be limited. This is a good point to know. Listed companies which are reporting under the IFRS standards must continue doing so by the EU regulation. But this is surmised to be included into UK law through the EU repeal bill. The requirements of EU for financial and non-financial reporting by different entities are present in the Accounting Directive and are covered already under the UK law. 

  

The study also looked into the matter of passport rights, which permits UK companies to render financial services within the scope of EEA. 40% of the MPs expressed their agreement over the necessity of securing auxiliary contracts for companies which are holding passport rights. 29% of the MPs were not convinced and 25% showed no inclination about this issue. 

  

The UK audit profession has undoubtedly benefitted from the use of globally acclaimed high-quality audit standards. It provides a good measure of international coordination across the audit business which is believed to be relevant to the market environment. The potential impact of Brexit on audit seems low, at least in the short-term. However, Brexit may grant an opportunity in revisiting a few of the amendments set forth by the EU audit reform. Although the probabilities for changes exist following Brexit, UK has been supportive in promoting recurrent retendering of audits of specifically listed systems. 

  

These changes have now been appended and agreed as part of a good practice. The likelihood and need for more changes, therefore, would appear to be narrow. However, it is conjectured that UK could reconsider the purview of typical facets of the EU audit legislation if these practices turn out to be unnecessarily burdensome. 

  

A good majority of the accounting laws that have so far been followed in the UK were primarily ordained by several directives that were also executed and administered by the EU. These ordinances comprised of the provisions defining the process of creation of accounting reports, the exact stage of their creation and various other features. The UK government will undeniably offer new directives which are akin to the ones held by the EU, but to what extent the similarities remain needs to be examined. 

It is familiar that opportunities go side-by-side with threats. For accountants, a dearth of relevant skills, post-recession in 2008 was already a big worry. With Brexit, the situation is probably going to be aggravated. Until now, British accountancy businesses employed accountants only from inside the EU without asking for an immigration authorization. But, in the wake of Brexit, employment assents may require an audit. 

 

Although such chances are bleak, a portion of EU accountants may at last need to surrender their jobs and return to their nation. A majority of accounting and bookkeeping services professionals voiced apprehension over jobs being shifted from the UK to EU. The principal concern seems to be over job stability, constricted opportunities, constraints associated with working abroad and a potential job loss as well when it comes to downsizing and cost-cutting. 

 

It may be a bit early to evaluate Brexit’s effect on accountancy employment. But it is being broadly revealed that in these questionable circumstances, businesses, more so the ones with solid balance sheets and accounting reports are implementing investment cost-cutting and recruitment freezes. This can kindle a more profound crisis in the UK productivity. 

 

Numerous reports have suggested outsourcing would be an excellent option and that Brexit would create a boom in the demand for bookkeeping outsourcing services as UK businesses progress forward to understand the situation. There would be a significant surge in workload connected with projections, revising forecasts, analysis of the impact on the markets, assessment of management figures, exchange rate disparities etc. There are many accountants who have already begun hiring surplus staff from outsourced accounting firms to deal with the liability of this extra paperwork. 

  

Accountancy outsourcing can be extremely advantageous to control the productivity amidst this period of uncertainty. It enables you to access qualified staff at lower fixed costs and flexibly move your practice ahead. This could imply proper sorting out of works related to compliance and self assessment tax  with the outsourced staff and focus on aiding and supporting businesses to tackle the challenges which Brexit has come forward with. Outsourced accounting firms can also assist you in quickly responding to the opportune chances without the restrictions of long-term employment contracts. 

 

The governance encompassing VAT application was previously decided by the EU since it was their proprietary concept. With Brexit, the VAT policies are most likely to be modified. Hence, this would have a direct influence on the companies’ accounting practices. It is expected that the government would design a system that is distinguishable from the VAT system because of the fact that VAT is a continuous source of extensive income generation for the country. 

  

Many of the consequences of Brexit remain obscure at this point, particularly around issues that focus on passport rights, tax and compliance. However, amongst all these apprehensions surrounding Brexit, one thing is very clear that in the coming times accountants have a crucial role to play with the sole objective in advising and assisting their clients on the financial and tax implications of the EU withdrawal. 

  

BY: AMIT AGARWAL 

 

London  

Suite 7, First Floor, Amba House,  
15 College Road, Harrow  
Middlesex - HA1 1BA  
Registration No: 10746177  

 

India  

Gurugram  
Unit No.110-111, Spaze IT Park,   

Tower b4, Sohna Road  

Gurugram, Haryana - 122001  

  

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A return to prudence: restoring faith in accounting 

The journey towards achieving fair value standards has resulted in the loss of prudence and judgment in accounting outsourcing companiesPoor audits and troubled auditors have seeped into the very heart of the corporate system and rendered it dysfunctional. Further investigation into this matter has proved that the problems in the audit market may be perhaps due to some loopholes in the accounting standards in place.  

 

Recent financial scandals such as the fraud at the Colonial Bank in the US to the disintegration of Carillion, the UK outsourced bookkeeping services group has significantly pointed out the inefficiencies and errors in the system. One of the main problems is the structural dependency on the Big Four firms. Another problem is that auditors have failed to prevent investors from being cheated and to report criminal practices. The rules have become defunct and unnecessary for the practice.  

 

Three decades ago, banks would manipulate their profits by valuing loans and keeping aside provisions for losses on loans without caring much about the existing economic situation. This incorrect higher scaling of profits was good news for many investors as they would get higher returns. However, these practices were detrimental to the economy leading to the savings and loans crisis of the 1980s and 90s. 

What went or is going wrong 

Managers who are spoilt by the equity incentives and fringe benefits are using the system for their own personal gains. The writing up of asset values in relation to market values, whether real or estimated, have enabled them to get profits, distribute dividends and increase share prices. The fair value system will only work if correct market valuations and proper estimates based on logic are prepared. The credibility of the company is what’s at stake and an auditor’s responsibility is to guard that. 

 

However, auditors, especially in the Big Four firms, have shed that responsibility, instead of using their lobbying power to make decisions devoid of any judgment. This is where one of the drawbacks of the fair value approach creeps in. Rationale and prudence can only be restored if time is taken to understand the different uses of the models, estimates, and projections. This will help work around the manipulative nature of the historical cost approach. 

 

There is always a place for new rules and approaches in the market. The problem of non-performing loans in Europe has been dealt with by creating a new rule, IFRS 9. The rule mandates that companies set aside bad debts provisions before incurring any losses, in order to be on the safe side. The rule is a healthy mix of fair value accounting and predecessor standards. 

 

Principles of modern accounting 

An important principle of modern accounting is fair value. The framers of accounting standards suggest the coordination of accounting rules globally and to do away with system loopholes. This method relates asset valuations with the prevailing market prices. The aim is to prepare accounts according to the current economic situation rather than the historical cost of the assets. It has since been accepted as a fundamental concept in modern accounting. The method has been adopted in the European accounting practices as well. The concept stems from the idea that accounts should be user-friendly. It has been used for volatile and fictitious valuations and extends to non-liquid assets with no certain market price. 

 

This rational approach should accrue to all areas and regulate cash flows. Also, auditors should keep an eye on decisions made by financial directors and consult with them on important matters. The underlying aim of the audit market is to assure investors and the public of the fairness of accounts and this sanctity should be maintained. Changing the accounting rules is only the beginning. 

  

What else can accountants do 

It is also important for the accounting firms to include their clients in the discussions and allow them space to share their thoughts too. This helps in building trust as shared below. 

 

  1. Be available proactively – Your clients may not be accounting experts and the words may be jargon to them. They may also be relying heavily on you for your opinion, suggestions, and recommendations.  It is important that you look for opportunities where you can add value to your client and ensure they don’t get stuck with any compliance issues or miss important deadlines. 
  1. Give them enough space to intervene – You are an expert, no doubt but your client may also have a fresh view. You can tell them what can be done or what is the right way or wrong anyway. It is important to allow your clients to intervene so that they get the feeling that they have the control of their accounting and this authoritative feel can make them more comfortable to help you in getting their trust built in you. 
  1. Breaking down the complexity for them – Explaining each process and accounting details of course is and should be one of your tasks. Accounting is a scary term for many and what an accountant may find a simple concept, could be a nightmare for others to understand. It is important that they know what you mean by the terms you use. Decide recurring meeting slots and discuss the financial data and performance with your client so that they know where you are heading and so that they don’t raise a concern out of the blue one day. We also provide payroll outsourcing services provider. 

A better transparency, ethical accounting, and communication with customers can help get the faith back in outsourcing. 

BY: AMIT AGARWAL 

London  

Suite 7, First Floor, Amba House,  
15 College Road, Harrow  
Middlesex - HA1 1BA  
Registration No: 10746177  

India  

Gurugram  
Unit No.110-111, Spaze IT Park,   

Tower b4, Sohna Road  

Gurugram, Haryana - 122001  

  

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How accountants need to plan their technology transformation 

September 26, 2018 

As a growing business, becoming digital should be one of your strategies. Technology has been and will keep evolving and will let businesses ride it to their way to success. The accounting industry has been changing for the last few decades and technology and accounting outsourcing companies have a key role to play here. The change has been positive and is helping the accountants grow. Anyone who doesn’t embrace technology will become extinct soon, as their clients, competition, partners, and industry will still become digital and won’t be in the same league as them. 

 

A research done by McKinsey mentions that 86% of all accounting tasks can be automated using the existing technology. To many, it may be a major threat. However, if these powerful tools of automation and innovation are used correctly, then the strategic value of accountants can be increased manifold. Technology can be used to change the role of the accountant, not replace it. Accountants must re-define their approach to digital accounting so that their skills are not wasted in mundane tasks. By doing so, they can work harmoniously use technology to get a better output. 

 

The planning that needs to be done to become digital is equally important and unless done right, it may not yield expected results. Either you plan it yourself or decide to do accounts outsourcing to make it digital, it is important to choose the right technology, train your people, to communicate to your client about the change, to plan the addition of new services that you can cater to and few other things that need focus as mentioned below. 

 

Define goals 

Hasty decisions attributed to confusion and over-complication lead to disastrous consequences. Well-defined goals have to be framed by accountants and be properly mapped out. Accountants should identify problem areas and potential areas for improvement. After identifying them, they have to set targets for their timely completion. This will give them a clear vision of their purpose. 

 

Strategies 

Accountants must focus on cohesive strategies after fixing the goals they want to achieve. The strategy must contain all action plans and layouts of all plans. It cannot be done in one day as the plan might keep evolving depending on the business environment. Accountants must view their practice objectively and make rational decisions. Hence it is important to decide on the right clients, the right team and the best working methods and processes to be successful during the long haul. 

 

Increase the service portfolio 

Digital accounting is a broad field which offers accountants a lot of scope to deliver profitable services and also gives them an opportunity to extend and upgrade their existing services. The addition of new services and in turn revenue streams have increased after the surge of digital accounting. Many firms have reported an increase in revenue growth due to this aspect. This will give accountants a significant advantage to use. 

 

Match your needs and the right technology 

Technology is the central base for digital accounting. Accountants should choose the right software to take care of their daily processes and which can be tweaked to make it in line with the company’s processes. It is important to choose the software based on factors such as the size of the firm, requirements of clients and the firm’s specific area of expertise. The benefits of the software and the changes it will bring about must be clearly explained to the firm’s employees. This can help prevent any employee resistance due to change in software or additional processes. The clients should also be briefed on the adopted technology. In this way the firm can gauge their expectations and work accordingly. 

 

Recruit to build the core team 

Having the right team on board is key to a successful digital transformation. Talented and hard-working people are required to pull off the job which is why proper recruitment is a must. Digital accounting requires tech-savvy accountants and business advisory professionals with experience in customer service. You may also look at accounting outsourcing companies and use their staff instead of getting into hiring and training. 

 

Train and get your team ready 

Once the right software and team are finalized, the selected team has to be briefed on the processes of the company and trained according to company requirements. Training is one of the most important elements as members of a team can be taught to tap into their full potential. This will boost productivity. Online educational resources and video lectures can also help team members understand various experiences and along with real-time simulations, get them out of their comfort zones. These efforts will make sure they don’t falter on the job and offer clients the best services. They should be given enough time to take in the learnings and their progress should be routinely monitored. Necessary feedback should be given at the end of every self-assessment tax return. 

 

Segmentation for better facilitation 

Firms cannot focus on their clients all at once. It is important for clients to be segmented to facilitate the rapid move to the digital space. The idea is to introduce the new software to the initial clients and familiarize them with its usage. Their online presence will attract more clients.  Starting with internal clients is a smart way to increase efficiency as clients won’t have to change their processes. This can be followed by clients who do their own accounting and bookkeeping services. These clients will be ready to avail of any software solution which can streamline their operations. Firms can then be prepared to supply the suitable data necessary for operations. The transition from desktop software to online accounting will be made easier and help clients understand the difference digital accounting makes. 

 

Educating clients about the change 

Digital accounting is susceptible to resistance as it entails moving accounts online and may question confidentiality. Clients should be assured of the transparency and efficiency of online accounting to make sure they become comfortable with the process. Any queries they have should be answered with and all doubts regarding functioning cleared. The right information can do away with all concerns. 

 

Going digital is not an easy task and requires careful planning.  This is to avoid any obstacles and bumps on the way. Once the initial struggle is over, it is well worth the wait and to start enjoying the benefits of digitalizing and automating the mundane tasks while giving importance and time to more critical areas. Or you need not get into the entire planning and look for an accounting outsourcing company to plan for your accounts outsourcing and digitization by an expert in the industry. 

BY: AMIT AGARWAL 

 

London 

Suite 7, First Floor, Amba House, 
15 College Road, Harrow 
Middlesex - HA1 1BA 
Registration No: 10746177 

India 

Gurugram 
Unit No.110-111, Spaze IT Park,  

Tower b4, Sohna Road 

Gurugram, Haryana - 122001 

 

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Own your time by automating and outsourcing your accounting processes 

Due to the rising market competition, growing regulations and compliances and increasing customer demands, companies are under immense pressure to enhance their efficiency while reducing their internal costs and overall expenses. For any company, managing the accounting process can be quite challenging, as accounting entails a range of mundane, repetitive tasks such as data entry. Moreover, some accounting functions, such as bookkeeping, payroll, and taxes, need dedicated resources who are specialists in their designated fields. Since transaction volumes are rising by the day, they are putting more pressure on the available resources in enterprises and taking up a lot a precious time that owners could have otherwise spent on their core business functions. Therefore, companies are seeking an effective business solution to tackle their accounting woes. With dedicated organizations taking care of these niche areas like accounts outsourcingbookkeeping outsourcing companypayroll outsourcing services provider companies, and even tax outsourcing services providers, companies can get a breather from managing these in-house. Other than outsourcing, companies also can automate their accounting processes.  

Both the concepts and the profits companies can reap from them have been discussed in this article. 

  

Accounting Automation 

  

Technology is changing the future of accounting, and with technology, automation has humbly paved its way into the accounting profession. Accounting automation helps do away with routine accounting tasks, such as bookkeeping, which can be easily automated to have less resources tied down. Accounting automation successfully brings the entire accounting, invoicing, finance, inventory, reporting and CRM functions to work in sync and harmony, leading to a less stressed and happier business. Automation can also work in tandem with companies’ banking partners and do all the hard work on their behalf, right from reviewing entries to tallying books—everything is taken care of. 

  

The benefits of automating the accounting process are diverse and listed below are the main reasons why it is a sensible decision for companies to implement accounting automation.  

  • Tax compliance: Accounting automation software and systems are designed and configured to automatically comply with the latest tax regulations and compliances. Therefore, with accounting automation, companies do not have to worry about skipping tax compliances and not adhering to accounting regulations. 

 

  • Time and money savings: This is the most important reason that drives millions of companies worldwide to opt for accounting automation. Once companies have entered and saved the information of vendors, customers, and employees, they don’t ever have to re-enter or refill the data again. Forms, invoices and even checklists will be pre-populated with the saved data, and users simply have to pick their choice, which helps save not just time but also money. 

  

  • Improved accuracy: Automation and accuracy walk hand-in-hand. Since accountants are not re-entering data into the system over and over again, the chances of errors reduce drastically. Moreover, the accounting software does all the calculations, including totals and subtotals for all types of transactions such as sales orders, profit loss statements, credit memos, cash disbursements, and purchase orders. The software also calculates the sales tax and payroll deductions, leaving no scope for human errors and increasing the overall efficiency. 

 

  • Customizable reports: The accounting software greatly increases the reporting efficiency of companies. Without automation, it is a tiresome and error-prone task to generate customizable reports for cases such as defaulting customers, best-performing assets, worst performing employees, etc. However, with automation, this challenge can be easily addressed because the accounting software arrives pre-configured with multiple report templates that can be easily customized. 

  

  • Faster payments: To keep the business running, receivables matter and the accounting software makes it easier for companies to receive payments from their customers. The software has functionalities that allow companies to send invoices through emails and accept credit/debit cards for processing payments. 

  

Accounting Outsourcing 

 

Apart from using an automation software, the other solution companies can opt for is to completely outsource their accounting process. With automation, companies still have to monitor and review the information being fed into the systems and even employ appropriate measures to protect, upgrade and maintain the implemented systems. With outsourcing to an accounting outsourcing companies, all of these hassles take a step back, as a third-party provider will be completely responsible for carrying out all accounting tasks on behalf of the companies. Therefore, in the long run in terms of cost savings, outsourcing the accounting process is a more viable option for companies. Let’s glance through the major benefits companies can gain by outsourcing their accounting process. 

  

  • Automation: The accounts outsourcing process offers all the automation power provided by an accounting software. Moreover, with the rise of cloud computing, it is now possible to transfer data from one system to another with large-scale automation, which was previously not accessible. Due to the cost-efficiency of cloud services, companies, large and small, can choose the services of a cloud accounting provider to leverage the cloud flexibility and access resources without spending a lot of money. 

  

  • Round the clock financial advice: Outsourcing the accounting process to a specialized accounting outsourcing company provider allows companies to access the accounting expertise of the provider, which can prove to be extremely beneficial. These services are usually available 24/7 at the request of clients and are complementary with the service package. However, some accounting firms do offer expert financial guidance at an additional cost. This guidance can be for diverse topics, including tax planning, entity structure and growth strategies. 

  

  • Reduced tax preparation fees: Most public certified accounting firms charge clients by the hour for tax preparation. They cannot afford charging a fixed rate because most the data they receive from companies is either incomplete or inaccurate. Therefore, they have to put in a lot of hours for tax preparation and charging a fixed rate would be a lost bargain for them. However, if the books of a company have been maintained up-to-date by their outsourced accounting provider, it would take less time and thus less money for the company to have its tax prepared, as most of the records will be accurate and updated. 

  

  • More economical: In the long term, it is certainly more economical for a company to outsource its accounting process rather than managing it in-house. It is more expensive, time consuming and tiresome to spend countless hours doing invoices, recording transactions, filing taxes and reconciling transactions. Moreover, this may sometimes require the hiring of specialized resources, which would incur more expenses. Today, there are multiple specialized accounting service providers who offer all accounting services as a package, and these packages can also be easily customized to match specific business requirements. Cloud packages are more cost-efficient, thereby offering companies a more economical business solution. 

 

  • Peace of mind: Every business owner is entitled to peace of mind, and research says that business owners feel the most secure when their accounts are in the right hands. Outsourcing is the way to this much-needed peace of mind, leaving owners with ample time to focus on their core business. With outsourcing, owners do not have to worry about their books. Right from bookkeeping and payroll to financial reporting, the outsourced provider takes complete responsibility for the company’s accounting functions. 

  

What could be better than receiving a fully updated financial report at the end of every month but without having to go through the hassles and complexities associated with reporting? Having accounting specialists create and review these reports and even discuss how they apply to the business, brings a lot of satisfaction to clients. Thus, outsourcing the accounting process frees up a lot of time and reduces the unwanted and constant worry business owners usually have on their shoulders. 

  

To automate or to outsource? This is dependent purely on the business requirements and priorities of the company. However, both have their own pros. 

BY: AMIT AGARWAL 

 

London  

Suite 7, First Floor, Amba House,  
15 College Road, Harrow  
Middlesex - HA1 1BA  
Registration No: 10746177 

Ph: +44 (0) 330 057 8597  

Email: info@outbooks.co.uk  

 India   

Gurugram   

Unit No.110-111, Spaze IT Park, Tower b4, 

Sohna Road, Gurugram, 

Haryana - 122001  

 

Taking the Pain Out of Small Business Payroll

Small businesses will have a smaller team and hence lower bandwidth. Following the strategy of managing with required employees, having someone with a niche skill of payroll may not be possible and assigning it to someone who isn’t an expert can lead to major errors in pay management. Above this managing payroll in-house is even more complex because of tedious taxation processes and compliance management. Any mismatch leading to taxation errors or compliance will lead to sorting it with the Government, which any small business wouldn’t want to get into. And if there is an error in the pay, you will be upsetting an employee and losing trust.

 It is a good practice to have experts work on tasks that you are not too sure about. You can choose to outsource the work to a payroll outsourcing services provider or simply choose an accountant who can take care of this more effectively as compared to your training or hiring an employee internally for this task.

 Payroll outsourcing could be expensive but small business should look at the bigger picture. You don’t have to train or monitor someone in-house, you are letting experts manage compliance obligations and ensure tax adherence. They can help you in setting up best practices based on their experience with handling payroll for companies like you. So overall other than getting your payroll managed, you let go of related nuances and at the same time learn from experts. Real-time reports and anytime access to data comes as part of the package so unavailability of data or no control is out of the question.

 Having said the above, outsourcing may not be a fit for all organizations depending upon their style of business. It is still a good idea to evaluate it. Speak to a few payroll management service providers. Know about the benefits in black and white and re-evaluate.

 To be sure you get rid of the pain of managing payroll it is important you choose the right outsourcing partner. Here are a few checks and considerations when you plan to outsource.

First thing first, know your exact requirement

Defining the exact services you need is essential. You need more than just payroll management for sure. Importing pay figures, incorporating bonus amounts or requiring the pay data to be accessed by senior management at any time are important services that you need. Ask these specifically and look for a payroll service provider who can adhere to your requirements. Also based on your company size, industry or payroll schedule your needs will be unique so don’t go by a generalized service package. Know about all types of services the payroll outsourcing company provides and asks for customization if the standard doesn’t fit you.

 Which right is your right?

There are a plethora of payroll outsourcing and accounting outsourcing companies and each claiming to become your ‘right’ outsourcing service provider. It is your job to choose the best out of all. The only checklist you should have is ‘does it fit your requirement?’. It may have the best of clients but are you comfortable with their services, their policies, costing and do their experts give you the comfort that they will be able to handle your payroll. This is the time when you need to scan them from all angles as you are choosing to outsource a critical portion of your business.

 

Update your data

The payroll service provider will take care of everything related to payroll but check if they will help in creating a proper data repository with past data for you that can capture end-to-end employee record and pay and bonuses and more. It will be a good idea to clear off the past data as well. You should also ask your current payroll manager to collect and have the data ready of the past 1 year so that the same without any hiccups can be shared with the payroll service provider during the transition.

 Is the outsourcing company technology-oriented?

The need and demand of the services world is changing. Now you have a few offices, tomorrow you may have many in different countries with your staff working from multiple locations and even working on the go. How would you ensure that the data from all these different locations is collected, is on time, is precise and calculates payroll based on rules as per the specific location? Even if there are people working specifically on this it is daunting to have an error-free data in place. This is very technology comes in handy. Put this requirement in front of the payroll outsourcing partner you are evaluating. See how well they decide to use technology to cater to this scenario. If they don’t plan to do use technology to cover this scenario then they aren’t your right pick.

Data confidentiality

With technology, there comes many benefits as well as a few challenges. Data leak is easier now with data available on the internet. Also as you may be managing the payroll for multiple offices, confidentiality needs to be stronger. One of the main concerns a small business is sharing the data with a 3rd party with the concern that it may get shared by someone unwanted. When evaluating a payroll outsourcing provider it is important you thoroughly understand their processes and plans to manage your data. Look at their security certifications and regulations that they follow and then decide.

It is important for a small business to know the pros and cons when outsourcing payroll. The benefits are more undoubtedly if the checks are kept on. Communications, data access, compliance adherence, confidentiality, transparency and expertise play an important role. If these are taken care of well then the small businesses will have an easy way to get the pain of payroll management off their head and focus on core items.

BY:  Amit Agarwal

London 

Suite 7, First Floor, Amba House, 
15 College Road, Harrow 
Middlesex - HA1 1BA 
Registration No: 10746177 

 

India 

Gurugram 
Unit No.110-111, Spaze IT Park,  

Tower b4, Sohna Road 

Gurugram, Haryana - 122001 

 

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How Payroll Outsourcing Can Help Build a More Profitable Accountancy Practice

A common operational challenge with companies is to manage payroll. While this is for multiple reasons, the strongest is that they don’t see a need to create a specific skillset inhouse when it can be managed outside.  Be it for 5 employees or 100, organizations don’t see value in digressing their focus to something which isn’t the core area. 

When looking for an accounting firm to outsource payroll, payroll service providers in uk organizations usually seek an all-in-one accounting provider who could take care of all aspects related to payroll. However, taking care of additional services that are not core to accounting or need a lot of management without getting additional monetary benefits, becomes a challenge for the accounting firm. 

Payroll Administration – A burden for accounting firms with no profit 

accounting and bookkeeping services face several challenges while processing their clients’ payroll; as listed here: 

  • Time consuming tasks that do not add much value to the accounting practice. 
  • Essential for retaining clients, but clients are hesitant to pay extra for it. 
  • Information provided by clients isn’t always accurate, complete or timely hence involves a lot of back-n-forth. 

Clients hiring third-party accountants don’t simply demand the calculation and processing of employee payroll, they also expect the accounting firm to process and submit employee taxes; file government forms and reports; manage employees’ pension, insurance and health contributions; notify government officials when new employees join and existing employees exit the company and maintain compliance with all the relevant payroll mandates and regulations bookkeeping company in uk. 

For accounting firms, this is not only time-consuming but also requires considerable investment of manpower and capital. Offering payroll services can help accounting firms create a stronger revenue stream by effectively marketing their professional services, but currently, most providers are either not charging anything or are undercharging their clients for payroll services. 

Outsourcing the payroll services, in such circumstances, is the smart way out, as it helps accounting firms estimate the costs incurred and accordingly charge their clients, which, in turn, contributes towards a thriving accounting practice. 

  

Why Outsourcing Payroll as an Accounting Firm is a Smart Decision 

For accounting firms that process volumes of payroll data on a regular basis, the following challenges can be addressed with the help of payroll outsourcing. 

Preventing payroll errors 

Blunders while processing employee payroll can lead to unforeseen and unwanted costs, and there is always a possibility of errors with manual data entry. However, for clients, these errors are not simple mistakes, they cost money as well as business. Large or recurring errors can also lead to payroll audits. Moreover, if these errors directly impact the employees working at the clients’ organization, it can lead to upset employees and severe mistrust. This will certainly strain the relationship you’ve worked so hard to build with your client. Additionally, your client will have to face disgruntled employees and even have to pay penalties. 

Saving precious time 

Payroll, as an accounting function, demands a lot of time along with careful attention to fine details. Even with assistance from automation, employee numbers and figures still have to be manually entered into the accounting system, which involves the consumption of countless man hours for entering large volumes of information and cross-checking the entered data for typos and errors. This takes away precious time that could have been spent on your core accounting services. Outsourcing payroll services will help you save time so that your accounting practice can focus more on what matters, build new revenue streams and serve more clients. 

Complying with statutory changes 

 The UK legislative structure is complex and mandates companies to ensure payroll compliance with several jurisdictions. Moreover, protocols and legislative regulations keep changing from time to time, and outsourcing payroll to specialist providers will help keep your clients’ business compliant, irrespective of the changing regulatory landscape. Tax changes, employee records, National Minimum Wage (NMW) compliance, employee contributions and more can be managed accurately and resourcefully by payroll experts, freeing you and your clients from the liability of non-compliance. 

Reducing operating costs 

Payroll is a completely separate and specialised HR function that requires time and trained experts, both of which are expensive. Outsourcing payroll to a proficient service provider will free your accounting practice from operating overheads, and the service provider’s trained staff will be liable to handle your clients’ payroll formalities and requirements on your behalf. 

Maintaining data safety and security 

Processing employee payroll is a complex task that involves a certain level of risk, and your clients’ data is at stake. Despite having trusted employees, risks such as identity thefts, records tampering and embezzlement make it extremely crucial to maintain the safety and security of clients’ sensitive payroll data. This challenge can be addressed by outsourcing the payroll services to a well-established, experienced provider who can ensure the safety of your clients’ payroll information. In the absence of outsourcing, you will have to maintain backup and multiple servers for securing your clients’ payroll data, but outsourcing will free you from this burden as well. 

Leveraging the latest up-to-date technologies 

 Technology is transforming all business functions, and accounting is not immune to the trend. Specialised payroll providers employ the latest software and invest in state-of-the-art accounting technologies to streamline and automate payroll services, which leads to more accurate payroll processing. You can offer the latest up-to-date technologies to your clients by hiring systematic outsourced payroll services from a trusted provider. Using outsourced services will also free you from the investment required for deploying the latest accounting software and technologies. 

Leveraging the expertise of qualified professionals 

Outsourcing payroll services to specialised providers offers the opportunity to leverage the expertise and knowledge of skilled and qualified professionals. These professionals are experts in their field and provide on-time quality services, which will help keep your clients happy. In the absence of outsourcing, you will have to spend money to hire these experts, which will increase your business overheads 

Avoiding reconciliation challenge 

 In the overall payroll process, bank reconciliations are considered the most tedious task, as they involve substantial efforts to keep track of every payment going through the bank while issuing pay cheques. You can easily avoid bank reconciliation-related challenges by delegating your clients’ payroll to specialised service providers who have ample expertise and proficiency in reconciling bank statements.               

Payroll outsourcing can be used as a potential opportunity to strengthen your relationship with clients. 

  

An efficient payroll provider will offer peace of mind to your clients and help you develop a thriving accounting practice with payroll as a vital service. However, do not simply introduce the payroll provider to your client and leave the picture; this will undermine the value you’ve offered to your client. Instead act as the mediator between your client and the third-party provider, so that you can provide quality services at a reasonable price while simultaneously maintaining profits. Integrating payroll services into your accounting practice will offer complete accounting solutions to your clients under the same roof, which will help attract more customers and increase the value of your accounting practice. 

BY: AMIT AGARWAL 

London 

Suite 7, First Floor, Amba House, 
15 College Road, Harrow 
Middlesex - HA1 1BA 
Registration No: 10746177 

India 

Gurugram 
Unit No.110-111, Spaze IT Park,  

Tower b4, Sohna Road 

Gurugram, Haryana - 122001 

 

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Making Tax Digital – The New Legislation Which is Arriving Soon with Force

Government’s proposal for Making Tax Digital (MTD) has received a widespread criticism, yet the political and business groups have agreed that online is the only way for taxation to go forward. Currently it seems that the new legislation is going to arrive either the next year or in 2020 and all the businesses will have to adapt to the changes it brings. 

What is Making Tax Digital or MTD? 

Making Tax Digital (MTD) is an HMRC initiative that will revolutionize the UK tax system and ultimately bring an end to self-assessment tax. It is matter of time that the changes in the legislation come into effect, it is speculated that by April 2019 it is going to be applied. When the changes come, most of the businesses will have to submit the quarterly online tax returns through software which will be approved by hmrc self-assessment. All these updates are going to be followed by end-of-year reconciliation to make sure activities for the whole year have been recorded properly for taxation. As we came to know from the taxman, following changes will be achieved: 

  • reducing the burden on the taxpayers 
  • giving benefit to the exchequer 
  • making tax system more transparent and also accessible 

The government has consulted on these proposals the last year and has also said that they are going to respond very soon to the consultation. Last year HMRC has published the draft Finance Bill which includes the clauses for necessary changes to be legislated. 

Concerns 

Commons Treasury Committee has stated that the small firms could be spelled with disaster with the radical plans and they also feared that many outsourcing accounting for small business firms may face the out of business situation. 

Though the Committee well supports the idea of reporting of the tax being digitized, it also stresses that there is no proof that the quarterly reporting and record keeping through mandatory digitization can be beneficial and that there should be a detailed set of pilot systems before it becomes obligatory for every business. 

Committee is also concerned about the economic (cost) impact of introducing and maintaining MTD on small businesses as the information about the free software which will help to submit taxes is not sufficient still now. Committee feels that all these extra costs are going to surpass the benefits to exchequer in tax gap reduction terms as the result of few taxpayer errors leading to MTD’s overall impact being negative. 

In response to the conclusion of a report regarding MTD, Committee Chairman, Andrew Tyrie has said that if the digitization of tax records and the reporting i.e. MTD can be introduced carefully then it can make a great opportunity to improve tax system administration for long term. But without careful approach, MTD could be disastrous. He also said that if it is implemented with proper care where it is necessary along with the arrangements that are long transitional and that it gets full information from inclusive pilots, then Making Tax Digital can be beneficial both for the tax yield and the economy. According to Andrew if it is introduced in a rush then it is not going to benefit the system. 

Recommendations by the Treasury Committee: 

  • To report through MTD the £10,000 threshold should be raised matching the £83,000 VAT threshold. 
  • The starting date must be pushed to minimum 2019/2020 or later 
  • It is must to have comprehensive pilots for the proposed system with complete protection for the firms which are required to participate. 
  • Pilots must be designed in such a manner that they can gather all information over entire reporting process, in inclusion with the end-of-year reconciliation. Then this information must be evaluated with the pilot evidence and presented to the Parliament before the MTD’s full implementation 
  • A right functioning market must be there which is going to produce the appropriate software for MTD and the software should be absolutely free for the smaller and the less complex businesses. 
  • HMRC must publicize obligations of the taxpayers when the precise timing and shape of the MTD is confirmed. 
  • It is quite apparent that with the implementation of MTD, the scope of the cyber-attacks and hacking is going to increase. HMRC must provide the right assurance about the data security of each taxpayer which the software providers are going to hold. 

It is to be seen whether the Government is likely to take note of Committee’s recommendations and all the related concerns and the suggestions which are voiced by bodies like the Institute of Chartered Accountants in England and Wales or ICAEW and the Chartered Institution of Taxation. 

Though, one thing is certain that Making Tax Digital (MTD) is going to be placed in the legislation system in a very short space of time. 

Mostly those business with exceeding taxable turnover then the threshold of VAT registration will have to keep their records digitally using the compatible software for MTD functioning and then create VAT return from the software or combination of software; mostly for return periods. 

  

Some of the challenges business and their advisers going to face due to MTD are: 

  1. Businesses won’t be able to keep manual records and they have to keep all digital records in some functional compatible software which will connect via API or Application Programming Interface to HMRC. More information is required. 
  1. VAT returns should be submitted from the software only to HMRC and not through the HMRC entering just the VAT return figures. 
  1. It is expected that the VAT MTD will take place at the time when UK leaves the European Union. It will make the businesses understand the rule changes of the tax-technicalities and must also ensure that all the accounting systems deal with these transactions correctly. 

  

Right now, it is hard to predict the exact timing of the implementation and the total impact of MTD on businesses, but one thing is for certain, it will lead to more work for the accountants. Accountants will have to deal with not only more inquiries but make sure that all their existing customers are fully complied with MTD. Accountants may have to find innovative ways to deal with such deluge of work. 

BY: AMIT AGARWAL 

 

London 

Suite 7, First Floor, Amba House, 
15 College Road, Harrow 
Middlesex - HA1 1BA 
Registration No: 10746177 

+44 (0) 330 057 8597 

info@outbooks.co.uk 

 

Website: outbooks.co.uk 

 

India 

Gurugram 
Unit No.110-111, Spaze IT Park,  

Tower b4, Sohna Road, 

 Gurugram, Haryana - 122001 

Common Pitfalls Among Accounts Outsourcing Companies

 

 

 

Accounting may not be a key skill for you, or you don’t want to focus on anything else other than your core business or simply want to cut down cost – the reason for outsourcing your accounting services could be many and is a good move. You just need to be sure you have thought through the checklist well, before finalizing the vendor. Very basic, though there are points that get missed by many companies while outsourcing their accounting, resulting in a failure. Here are some common ones. 

GDPR – is your accounting OSP following this? 

Accountants have access to a lot of data on a daily basis. The accountancy outsourcing provider needs to be sure that their processes and systems are robust to comply with the GDPR. The required audit and checks should be in place to ensure there are no loopholes in the compliance. So, before you move ahead on further discussions with your vendor, the first thing should be to check their GDPR audit reports. 

Missing on your homework 

Your final goal, objective for outsourcing accounting and key criteria to choose the Accountant outsourcing provider should be clear, documented and well researched. Researched – to be sure that the goal you are setting will be achieved by your objective of outsourcing your accounting or bookkeeping company in uk and the vendor criteria you are defining is being met by your shortlisted vendors. At each level, you should be evaluating multiple options, even when you are doing your final negotiations with the vendor. Keep doing your homework to be able to present your case better and be sure the accounting OSP (outsourcing service provider) you are choosing is the right one. 

Defining ‘Cost’ the decision point 

It is fine to keep ‘cost of the services’ as one of the evaluations criteria but making it the decision point isn’t a smart choice at all. While most of the companies wouldn’t keep it on the list, but they end up choosing the vendor on ‘a comparative lower cost’. It is important to have the exact services you will be getting for the amount in black and white. A lower cost will always mean a few excluded services or a compromise on quality or the OSP’s experience. For example – you may not get some add on services or may be dealing with a junior resource which will eat up more of your time. So, while you are saving a little amount, you may be spending more of your quality time in return. Hence be sure to know what your will for a lower price and decide based on the services and experience rather than the cost. 

Choosing a ‘Lift & Shift’ model 

You want to outsource accounting either as you don’t have skills, or you want to cut down cost on this non-core skill. To be sure you get the right skilled people working for you at the right price it is important to know your accounting outsourcing service provider’s expertise. What type of associates and what skilled will be managing your accounting should be your question. 

You don’t want to become part of a lift and shift model which shifts all your accounting services to an offshore location to help you cut cost however not necessarily these outsourced locations will have people trained to be able to manage accounting for you without errors. So, your team ends up managing them indirectly making them spend their quality time on it anyway. 

Trust the documentation, Not words 

When outsourcing, the access to data is no longer restricted to only company employees and the vendor’s employees will be able to view the same. Storing and processing of sensitive data, and protection of proprietary information becomes challenging. Every OSP will tell you they will ensure data security, but breaches happen. Don’t they? 

As a client you need to dig deeper to understand the exact processes they follow to ensure data security and confidentially. Have the process documented, involve your IT security guy and ask the OSP to make tweaks to incorporate the suggestions. Know the implemented security controls and protocols for data security and put them as part of the legal and contractual agreements. 

Mis-alignment of Requirements 

Outsourcing Accounting or self-assessment tax return is a serious decision and all checks need to be in place before deciding the vendor. It is essential that you align your requirements with the partner vendor’s capabilities. Issues arising because of legal and contractual agreements not being comprehensive can cost your company more time and money. It is also important to agree on the tracking and evaluation mechanism beforehand so that the performance and errors can be checked at the right time. 

BY: AMIT AGARWAL 

London 

Suite 7, First Floor, Amba House, 
15 College Road, Harrow 
Middlesex - HA1 1BA 
Registration No: 10746177 

Ph: +44 (0) 330 057 8597 

Email: info@outbooks.co.uk 

 

India  

Gurugram  

Unit No.110-111, Spaze IT Park, Tower b4,   

Sohna Road, Gurugram,  

Haryana - 122001  

5 Major Differences between Accountant and Bookkeeper 

For people from the non-commercial background, it is very difficult to define the difference between an Accountant and Bookkeeper. Generally, both the line of work is admixed together. 

Here, bookkeepers stand as troopers of the army at the very initial level. All the accounting activities are commenced by them. 

While Accountant’s work is analytical and advisory in some manner and it also based on outsourced bookkeeping services activities. 

On the other hand, role of bookkeepers and accountants are equally significant when it comes to precisely proclaiming financial activities and overall performance of the business. As a result, demand for such professionals is increasing in business organizations throughout the world. 

For better understanding of both the activities let us have glance on the simple definition of accounting and bookkeeping services  

  

Bookkeeping 

It is a daily activity of recording financial data relevant to business operations in a regular manner. Bookkeeping is the activity of classifying, recording and analyzing business transactions in the pre-determined professional format. 

  

Accounting 

It is a process of identifying, measuring, and communicating financial information to entitle certain judgments and decisions by the users of the information. Accounting is considered as the activity of informing to other about the economic position of the firm. 

Now it may be clear that what exactly both the activities are about. Let us further discuss some of the main functions performed by Bookkeepers and Accountants- 

The following functions are key components to assemble a strong organization. These are the major activities performed by Bookkeepers: 

  • Recording financial transactions daily 
  • Precisely posting credits and debits daily 
  • Processing invoice, receipts, payments, general ledgers, etc 
  • Payroll related work, 
  • Adjusting multiple accounts and creating adjustment report 
  • Managing accounts payable and accounts receivable operations 
  • Calculating GST. 
  • Lodging and preparing Business activity statement (BAS) 

As we shared before, accountant’s work is more analytical, calculative and advisory in nature and it overlaps many of the above-mentioned expert activities in some manner. 

As their work defines their activities they can not only help in general accounting activities, but they tend to analyze past performance and draw financial projections for your business and guide you through future financial activities to be performed for healthy business operations. 

  

Services performed by accountants includes: 

  • self-assessment tax, planning, and advice 
  • Preparing financial statements 
  • Interacts with internal and external auditors for auditing purpose 
  • Analyze and review budgets and expenditures, 
  • Business concerned assistance 
  • Corporate financial reporting and compliance 
  • Provide guidance on superannuation funds 
  • Resolve accounting disparities 
  • Analyze and compile financial information to prepare general ledger 
  • Supervise financial management 
  • Develop, recommend and manage financial database through manual documents and computer software systems. 
  • Completing Payroll related works 

This was just a short glance of works performed by Bookkeepers and Accountants, but in reality, it is a huge arena with lots of complex and complicated task to be performed. 

Now let’s see the heart of this article. Yeah, its 6 major difference between the Bookkeeper and Accountant: 

  

On the basis of purpose 

  • Preparing financial statements 
  • Accountants measure, prepare, analyze, and interpret the financial statement in order to collect and represent financial statement. 
  • While Bookkeepers records all receipts, revenues, expenditures, etc to create accounting ledger. 

On the basis of management role 

  •  Top management takes special interest in accountants work because they are highly concerned with the information and projections which an accountant draws. 
  •  Top management is less concerned with how the bookkeeper functions. 

On the basis of Tools 

  •  Balance sheet, profit and loss account, cash flow statement, and position declaration. 
  •  General ledger, supplier ledger, customer ledger and cash book. 

On the basis of decision empowerment 

  •  Business decisions can be taken on the basis of Accountant’s archives. 
  •  Financial decision cannot be made merely on the basis of bookkeeper’s records. 

On the basis of skills 

  •  Due to the complexity of work accountants require special analytical skills. 
  •  Bookkeepers do not require any special skills as most of the work is in pre-determined formats. 

Hence, the conversation about differentiating Bookkeepers with Accountants could not be ended because it’s a huge battlefield. The Most of the companies are confused which designation to be choose between them. But while choosing any of them the company should review the difference between their functions and activities. Whichever designation fits the requirements of the company should be selected. Most of the time companies opt for Bookkeepers and get outsourced the accounting work from other CPA institutes for financial decisions. This is the more cost effective and convenient way of getting accounting information updated. 

BY: AJEET AGARWAL 

5 ways Outsourcing Accounting & Bookkeeping can transform small business in UK

In recent times we have witnessed significant number of people parting their ways with the job and taking their own route to achieve something on their own. The people with firm determination and sheer dedication have come forward to make the world a better place. 

Whether you belong to the creed of the initiator or founder of an established business, all of you tend to miss on one point for sure, which is an effective allocation of responsibility. Yes, you heard it right. Many a time, we tend to assume that we can shoulder some responsibility like accounting and bookkeeping services, which we never took up before. We consume our most vital time in undertaking some tasks which would have been executed by a relevant expert in considerably less time. 

That’s where the bookkeeping outsourcing company world comes down to rescue your business. Nowadays, every other service is getting outsourced thanks to high-speed internet and cloud services. Be it engineering, marketing, IT or Accounting, all of them are being sent overseas at relatively better quality and lower price. 

The common misconception that prevails amongst the entrepreneurs is that tasks like tracking the finance should be done by the employee of the company. And executing that way, they spend huge resources initially to find the right employee and then to continuously motivate them and keep them with the company. At the same time additional resources are spent to provide training and keeping their skills up to date. 

When you are just commencing the business, you need to realize that instead of undertaking it in-house, you can get it done by the firm which has dedicated experts and tools. Especially when we talk about small business, that’s the place where you can save humongous time, effort and of course, cost as well. 

Following are the 5 ways in which outsourced accounting can help small businesses transform their businesses 

Availability of elite team: 

Outsourcing accounting companies  companies create a pool of large resources with some very specific and niche skills sets to provide services to their customers. They don’t rely on people with generic skills sets as they are able to use these very highly skilled people across number of different accounts and hence are able to afford them. On the other hand, inhouse accounting team invariably will have to rely on generic skill sets as it is virtually impossible to hire a separate staff for all the niche requirements. 

Open to advanced accounting systems 

Being a small business, it becomes very difficult for you to use high standard accounting software to fulfil the needs. However, when you choose to outsource the work to specialist firms, you gain the access to all those mighty bookkeeping and accounting systems. This would not have been possible otherwise. That’s the beauty of the outsourcing alternatives you get at considerably less cost. 

Saves from payroll problems 

Often, payroll service providers in uk we tend to hire people who eventually prove inefficient in doing the allocated tasks and we must bear with it due to employment norms. Both finding people with the right skills and getting rid of people with not the right skills is hugely time consuming and complicated tasks. This can be avoided at least for accounting related tasks if you were to choose outsourced provider. 

Going to the outsourcing accounting company with the references from your friend or business associates can be more reliable than any other source. Find out what accounting firms they go with and what they recommend you for your business. 

Boost the effectiveness 

Saving on costs by through outsourcing is only the tip of the iceberg as some of the real benefits are realised after few months in form of better quality and the speed with which work is delivered. This will help you deliver better customer satisfaction/experience to your customers leading to more repeat work and hence better stickiness. 

Efficient Budget Management 

The overheads in any business are only going up these days, hence when you give the key to drive your accounting work outside the company, you are cutting one overhead less. It gives you time to spend your energy to win work for the company which is far more important to its growth. When your business is in growing phase, it takes the efficiency of your business to next level. And, justify the execution of bookkeeping tasks in accordance. 

All in all, accounting and bookkeeping companies prove enormously beneficial for your business, regardless of the sector, you’re dealing in. 

Contact us today for a review of your business accounting practices 

BY: AJEET AGARWAL 

Why Outsourcing

 

The economist, Adam Smith, says in his treatise The Wealth of Nations, “If a foreign country can supply us with a commodity cheaper than we ourselves can make it, it is better to buy it of them.” Outsourcing is merely a progression of an idea that has existed since early days of trade where people would travel far east or west for food and art that was available in plenty in these locations. It initially started with physical goods and now we have progressed that to include services (luckily in this internet age we don’t have to travel to that specific place to buy these things. 

As companies grow, it becomes increasingly clear that their focus has to be redirected to their core activities while the non-core functions can be ‘sent out’ or ‘outsourced’ to vendors specialized in that particular function. If there is anything that can be done more economically, effectively and efficiently by the other party than the organisation itself, then it is classified as non-core 

Based on years of experience with outsourced accounting firms, we have identified some key reasons for which companies around the world prefer to outsource work. Following image gives an overview of that. 

Focus on core functions 

Companies that outsource certain routine functions to offshore experts can focus on their core competency. Before outsourcing caught on in such a big way, healthcare practices had to deal with functions like transcription, medical billing and claims processing which consumed a lot of their time and resources. However, now by outsourcing these processes to external locations these practices can focus on their primary concern – ‘patient care’. 

Conversion from fixed to variable costs 

Companies that decide to outsource find that expensive infrastructure requirements are cut back drastically as some of the functions move to external locations. Cutting edge IT systems, state-of-the-art customer service call centres and technical support entail heavy investments to companies. By outsourcing these functions to external vendors, companies can convert these from very high fixed costs to manageable variable/flexible costs which can go up and down based on their requirements 

Ability to scale ( overcome talent shortages ) 

One of the key reasons why outsourcing has become a necessity is the shortage of talent in developed nations. As the previous generation of workers approach retirement, there are precious few newcomers coming in to fill the skills pipeline. The obvious outcome of this acute talent shortage is an increased demand for skills wherever they may be available. Industries are also subjected to seasonal fluctuations in work and lack of workers during holidays and off-seasons. One of the advantages of outsourcing such processes to countries like India and Philippines is that companies can deal with peak workloads and poor staff strength during vacations and holidays. 

Access to best talent, technology & methodology 

Apart from the financial benefits associated, another reason why companies outsource work is to have processes delivered by teams that have operational expertise in the outsourced process. As outsourcing has picked up over the years, several nations have built up incredible skills sets and capabilities in specific work categories. As these jobs are highly valued in these countries, some of the best people come and work in this line of business. Hence outsourcing gives companies access to world-class capabilities and infrastructure in the outsourced function. 

Incredible value for money – helps reduce cost and operational performance 

One of the most talked about advantages of outsourcing to locations like India is the cheap labour costs in these countries. Processes outsourced to these locations are done at much cheaper rates and same quality levels as in the donor location. This translates into major cost savings for companies. They also save on operational costs such as payroll, administrative costs, HR, power, rentals and utilities as processes move to other locations. Companies outsource to vendors who have domain expertise in the outsourced process. Their experience in the field translates into greater operational efficiencies for the bookkeeping outsourcing company in uk. Their skilled expertise will produce better results within a faster turnaround time and thereby increase your turnaround time to your customer. On time deliveries result in happier customers. 

  

Overall its not very hard to see why outsourcing is so popular and why more and more companies are choosing to outsource. Industry watchers predict that outsourcing as a business practice is on a growth mode. More and more companies are drawing up plans to outsource work to offshore locations. The trend is clearly in favour of outsourcing larger volumes of work. Vendors are moving up the value chain to include in their service offering a range of additional services that require greater skills, research support and expertise. As offshore vendors become more streamlined and improvise on the offshore outsourcing model, it is not difficult to see why outsourcing is here to stay 

Outsource your accounts today and lower your operational costs by getting in touch with us 

BY:AJEET AGARWAL