AccMan Pro (now moved to www.accmanpro.com)

Online tax filing fiasco

There I was thinking of taking an early bath and along comes a report the Institute's tax faculty wants a watchdog for HMRCs online efforts following the debacle over ELS. Unimaginative. Rubbish. Nonsense. Stupid idea. I've said so.

The way you get change is not by appointing narrow focused insider watchdogs that have little or no real influence. We already know what they will say and how they'll wring their hands. If the Institute used its collective brains, it would realise that change comes from the bottom up. That's you, me and our clients. It's why we have general elections.

So that no-one's confused. This is not about petitioning although that could be an outcome. It's about creating an important, powerful and influential group that gets enough attention to impact policy. It's about entering the debate, conversation, call it what you will and making sure it gets enough attention that it cannot be ignored. And before anyone runs away and says yes, but who's going to organise it, who's going to sponsor it, who's going to moderate it blah blah blah:

• A site for that purpose can be established in less than a day at near ZERO cost.
• It can be PR'd in less than 3 days - again at near ZERO cost.
• If there is a cost, I'll wager I can raise enough to make it worthwhile in...oooh...10 minutes?
• It would be as influential as the number of people entering the debate - the only cost is the time and effort to get involved.

This is you chance to say NO to the Institute and offer a viable alternative that government can swallow. After all, it understands the focus group idea - this is not dissimilar, only much bigger. If this kind of thing is important to your clients then I'd encourage you to think about an appropriate response. This is my effort. You decide.

I'm not alone...

When I posted about the ludicrous pub VAT press release thing I didn't realise others are in the same boat. While I skated over the issue of important press releases being buried, it seems others are equally concerned.

Richard Curtis, commenting in the online edition of Taxation likens the situation to the impending destruction of Earth in the Hitch-hiker's Guide to the Galaxy. Good analogy. Richard notes that:

"I accept that not all of HMRC’s news releases will be of interest to all HMRC customers, but I am not too sure why the definitive list of news releases is not on the HMRC site to enable customers to at least decide whether the information is relevant or not. Nor am I sure why the list seems to be selective, short, cluttered, out of date and without a proper archive."

I could speculate about obfuscation but that's not really the point. The solution is straightforward. Implement RSS to all news release areas. It's not rocket science. But as it's government, no doubt they'll need a committee, a review, a report, feedback, a tender, a Big Consultancy implementation and in about two years time...

Sod that - we can do this now and better serve our clients at virtually zero cost. HMRC - stop talking double PR speak, listen to your customers - if you can define them!

Why I hate spreadsheets

It's a quiet day so time for a rant. Spreadsheets are very tempting. The application comes 'free' with your PC and seems to be useful for all manner of finance related jobs. But it's not that simple. Neither is it free.

The spread is a great tool for ad hoc analysis but beyond that, it's a dog. What most finance folk don't realise is that spreads are general purpose tools, NOT finance specific, even though there are plenty of finance related functions buried within them. The bigger issue is around development.

Finance people are not trained in the rigour or processes needed to develop applications. And that's what you're doing any time you knock up an integrated P&L, balance sheet and cash flow forecast for a client. Unless you document every step and thoroughly test the model, the chances of anyone following your work correctly are virtually zero. It's not something you're trained in so shouldn't touch with the proverbial barge pole. Apart from the difficulties in following spreadsheet models, there's the question of risk. If the model is flawed, then you could be exposing your client to problems.

Our skills are much better deployed on interpretation and brokering the relationships that lead to successful financing. That's a value add.

I'd urge professionals to dump all and any spreadsheet models that haven't been professionally developed. Better still, get hold of dedicated applications. They're worth the investment. Here's a useful though partial listing.  

Document management - a business case

Professional firms buy software because they need to, not because it might make a difference to the business. In virtually all cases I've seen, the driver was improved efficiency. Not once have I seen the prime objective as being improved effectiveness. This is where document management will challenge your thinking. Traditionally, DM has been seen as a way of reducing paperwork and storage. Today, it's seen as a way of combating compliance costs. In reality it should be the starting point for client intelligence.

In a good DM system, you will be able to collaborate on the creation of policy documents, interpretations, create a repository of intelligence on issues like tax decisions, local economic trends and so on. This is in addition to filing capabilities. Such a system should be searchable and capable of being readily updated, with version control if needs be.

This can be conducted by using proprietary tools. But technology is on the move again and so the ability to assemble applications and re-assemble in short order has taken on important meaning. That's why I advocate a different approach. I believe that using open-source products as opposed to proprietary holds the key to allowing you to reduce your dependency on more expensive tools with the service and maintenance costs that go with it.

If you agree with that then you need tools that are fully web-enabled. This is likely to be very different from the technologies you currently use. It has huge implications for how you communicate. And potentially huge benefits. Having open access to documents that are logically linked allows the organisation to learn faster, more cohesively and more effectively. That will have a direct impact on performance and client interaction. That's a long way from an electronic filing system that solves compliance issues. Isn't it?

Email an inhibitor?

Here is a quote from a Corante case study at a pharmaceutical company about email compared with other technologies:

"Email is getting out of hand and people use it in suboptimal ways. They
write back and forth, sending documents over and over again, with the end
result that nobody knows whether they are working on the correct version of
a document and everyone has lost track of where they stand and what the
last resolution was on a particular issue on a particular discussion point.
"It has come to the point where individuals are receiving anything up to 200
emails a day, yet a lot of it is just copies of content that is of absolutely no
interest whatsoever to them. It's becoming counterproductive and it's not an
appropriate medium for many types of communication, so we need to find a
way of replacing email. Clearly blogs and collaborative platforms are two key
ways of doing that."

As knowledge workers, accountants are constantly wrestling with email. Since using blog technology, my reliance on email has plummeted. Where I am involved in collaborative projects, this medium along with others like wiki has cranked up my productivity by an order of mangnitude.

So now we have a medium we can fruitfully use internally to improve productivity and, along the way, get to know one another better. Not a bad idea?

Simon Crompton - MYOB

I hope you'll see how this stuff works when I explain this offline conversation. A firm told me they'd looked at Singleview about 18 months ago but hadn't bought. They are now considering their document management strategy.

This prompted me to call Simon Crompton. He's GM of MYOBs professional practice division Solution 6. I've known Simon 20 years - I bought the old Finax product back in the 80s and used it through to when I retired. A great product.

We talked about Singleview, their document management solution and how it's suddenly become a hot product in the wake of increased emphasis on compliance. I talked about the need for practises to get closer to clients and Simon came back discussing ways of pulling information into client folders that might be relevant to their affairs and how that might be used.

And then I thought about this. For document management to be useful, it has to have intelligence. It's not enough to say we saved space - although that's a valuable benefit. What I want from DM is an intelligent way to manage information. Singleview has the means to create a categorised, searchable knowledge base into which you can dump all manner of information. I haven't reviewed it - yet - but I can say that's not enough. You need to collate and access key information about common client groups. Here's some questions.

• How are you going to structure the knowledge base to achieve that?
• How, on the basis of that information are you going to detect 'at risk' clients?
• How are you going to communicate lessons learned to your clients?
• What can they contribute to your understanding of the client group?
• And do it all without having to use yet more applications?

As it happens, Singleview can be considered a practice portal. That's an interesting idea. You could for example think about dropping pages you create for your site or which you see from other sites into folders.  Hmm...now what could we do with those?

Pub VAT audits

Have any of you seen this about VAT visits and pubs? If not then don't be too ashamed at not keeping up to speed. It's buried inside the Government News Network site. Back to the press release. This has to qualify is one of the most badly spun pieces of double talk I've seen in years.

Unless I'm totally out of touch, then the last I heard, VAT exists to enforce collection, not provide help to businesses. How about this:

"We recognise that businesses need information and support, which is tailored to meet their individual circumstances. We have learned a lot about those needs through our VAT assurance visiting programme. We will be working with individual pubs and the industry as a whole, to help Public Houses pay the right tax at the right time, and to provide information about the schemes we offer, which can simplify VAT matters."

What a crock of shit - as our US cousins might say. But they let the cat out the bag when they add:

"The letters and advice will be backed up by a programme of visits to pubs by VAT assurance officers, some of which will be without an appointment. Visits like these play an important part in allowing HMRC to gain an understanding of how businesses work, and to address the specific problems and concerns of individual businesses."

But hang on. At the end of the release there are notes to editors where it says:

"The purpose of the visits is to check the books and records of the business and offer one to one advice on VAT matters"

So now you have it. They're doing VAT audits in disguise. But it's not that simple. Not only do they plan on spot checks, but in the process they'll be adding to their store of knowledge. But they don't have any. And what they do have is no good anyway. The last available public record of what Revenue Inspectors know about running pubs was based on data collected in 1987. And what they say is that:

"No two houses' overall rates of gross profit will be the same, as there are so many factors, differing from house to house, which affect the final result. Tenanted and managed houses with the same kind of trade, in the same locality, should have results falling in the same range, as should free houses in Scotland. Free houses in England and Wales should make more."

Now you know that, you can respond to the threat at a local level by reviewing your publican clients (if there are any left!) and advise accordingly through your community friendly website.

Design is not the answer

The idea that a slick site creates buzz for you is wrong. While there's nothing wrong with outsourcing website design to third parties, design of itself does nothing for you other than pique a small interest. Design doesn't help you one jot when it comes to content. Today, sites that are static are exactly that - static...or as I prefer to say - dead.

Overcoming the static nature of sites is much easier today than it used to be. Now you can use templates to get a basic design in place, choose colour scheme themes and re-order content to give a personal look and feel. Entering inormation is easier today than ever before. In other words, compared to the situation say 5 years ago, content creation is trivial - as easy as writing an email. That's not to say that good design is irrelevant. Not at all. When done correctly, good design makes your site easy to use, easy to navigate.

Developing compelling content though is something of an art. You already know what you want to say but finding a way to communicate that so your posts are accessible to the average client is harder. For this, you might need some help.

The legal and ethical angles

Some readers have raised the issue of legal traps for this medium. The only ones that might conceivably apply are defamation and libel. I cannot conceive of a situation where, with sensible policies in place, a professional firm should run any risk on this issue. If you have specific questions in that regard then please get in touch via dahowlett AT gmail DOT com.

The larger problem is the already cloudy ethical matter of client confidentiality. Clients are your greatest story tellers. So when they're successful and tell others, so are you. The purpose of using this medium is to stimulate discussion or get them to make contact with you over a specific issue. In doing so, clients are volunteering to make disclosures along the way.

I see nothing wrong in mentioning to clients that you have this type of website and that if they want to contribute then it is freely accessible at no cost to them and they can make any comments they wish or ask questions. You explain that comments are moderated for decency and may be edited if it clarifies a point. I'd also say that it's not wise to mention specific numbers in any posts that reflect personal experience. Provided that is explained to them in simple terms then I would suggest you evidence that with a simple form acknowledging the fact.

Does the fact they appear on your website then have ethical consequences? I believe you are inviting the client to participate in something that has very positive ethical outcomes. Say for instance you post the question of office facilities, asking whether readers think they need updating and what would they like to see. That's little more than a survey you might say. No, it may have that side effect but the main point is that clients are helping themselves and you to do what's best for them. A virtuous bi-lateral arrangement.

Another example might be raising year end tax considerations and then asking where they want to see you focus your efforts, giving examples like wealth planning, overseas investments, family taxation, personal matters, business investment - the list could be endless. Everyone's a winner in that scenario because the consensus will be telling you where you need to prioritise. Again, everyone wins. A sparkling argument.

Is there a consideration then for those same clients, having identified themselves, when they say great things about you like: "I saved a fortune with Jim's lot and it looks as though I'll still save thousands next year too?" Or how about the person show says: "Jim's firm have left me with a sense of peace. I know I don't have to worry about VAT and the pyroll when it's in their hands?" I really don't know. My gut feeling is it may have be seen as marginally negative at an ethical level but equally, it could be a real differentiator. And if the clients ike it, then hasn't the ethical matter been de facto answered?

I've not seen a single accounting firm that reveals its client case study's identity. Perhaps they've never thought of that. Perhaps they're shy. Perhaps they daren't! Now there's a thought.

What are your feelings or knowledge on this matter? This could help more people feel comfortable about 'coming to the party.'

Competitive advantage

According to AccountingWEB, it has registered 11,643 firms of which 20.84% have websites. That comes out at around 2,400 give or take. When John Stockdyk lobbed a post about this site it got a very respectable 2,116 page views. I can infer that a significant proportion of those who read come from the community of those with websites, but I can't be anywhere near certain. But assuming that's rubbish, then this site was visited by at least a quarter of all records with email. That's an amazing level of interest.

So I'm thinking...anyone who's read this stuff, stayed and is making ready to have a 'conversations' friendly website has already got a competitive advantage - I think. Admittedly you are in a minority, but a minority that will leap ahead of the competition. Trust me, I'm a (retired) accountant.