Cloud accounting advertising claims it’s simple to keep on top of your accounts. Is it true?
EXTRACTED FROM THE DIARY OF “SO MUCH MORE THAN AN ACCOUNTANT”
urn on the radio to an advertising financed station, and within minutes you will hear the leading cloud accounting Software Company’s advert telling us all how simple it is to use and deal with your obligations to meet the requirements of HMRC in relation to your taxation affairs. Their objective is to have SME’s purchase their software, and believe it’s the panacea for their compliance obligations, and could/should save them employing bookkeepers and/or accountants.
I’ve been in practice now over sixteen years, and throughout, met prospects that do, or intend to do, their own bookkeeping, passing the accounts to us for finishing, i.e. producing the accounts and related tax returns, be they self-assessment or corporation tax returns. It’s fair to say that some of those clients genuinely can do their own bookkeeping, but they are a minority. The majority fail to apply any of the accounting principles, have no systems in place to ensure costs match incomes, or that items are dealt with consistently, in the correct timeframe, or sometimes at all.
There are a number of institutes in the UK, providing training, and monitoring, delivering professional bookkeepers and accountants to the economy, fulfilling a vital role. This fact alone should signal that it’s not quite as simple as some would have you believe!
Let’s face it, we all change a fuse, and there are always gifted amateurs who can do a bit more, and yet there are still qualifications required to be an electrician in whom one may expect professional competence above and beyond the layman’s skills. This same applies to pretty well most trades, and in truth, how many of us choose to tackle these tasks? Yet when it comes to our dealings with HMRC, and our tax affairs, we are being told DIY is easy peasy, and to buy the software yourself and away you go!
The truth is a long way from the fiction. There are disciplines and knowledge required to produce an accurate set of accounts, presenting a true and fair view of any client’s business. It starts with bookkeeping, and moves on to accounting, and both of these professions have training, examinations, and post qualification continuous professional development to ensure we deliver a competent service. So if the layman has no training, and has no resources to keep up to date, can we truly expect them to manage their accounting and taxation affairs alone?
We often hear about clients causing errors as a consequence of applying a little knowledge to a complex situation. That’s when they expect their accountant to resolve the problem, but I’ve yet to hear of a client being happy to pay to unravel their errors!
Mistakes that lead to an underpayment of tax are dealt with by HMRC mandatory fines, on top of the tax and interest payable. Mistakes that lead to too much tax being paid are rarely picked up and signalled to the taxpayer by HMRC. It’s their job to collect tax, not reimburse the unfortunate amateur.
So next time you have the radio on and hear the adverts for cloud accounting, maybe consider is it really that simple?
To discuss any issues this may raise please call Barry on 07899 947578 or the office on 01427 679175