How accountants can support UK businesses in 2021

By Steve Cox, Chief Evangelist at IRIS Software Group

2020 was the year accountants had to digitise to survive. And many firms are hopeful that they can go back to some previous form of normality once the pandemic is over. We know that can’t and won’t happen. 2021 will be the year of reinvention.

With what we thought was the worst of the pandemic over, we’re heading into further choppy waters with lockdown 3.0, which is bringing new challenges and more changes as a result. This increased rate of change is bringing a litany of new regulations with it. From furlough to Brexit to Making Tax Digital (MTD), many business leaders are feeling confused, despondent and unsure whether they remain compliant. All of which isn’t putting them in the best position to move forward with confidence in the new year.

Accountants will need to play a big role in helping businesses adapt to the next normal – advising and supporting their customers as they grapple with, and adapt to huge economic shifts. Using technology, accountants can help SMEs reinvent, grow and take advantage of a digitised future.

Going beyond Brexit 

With the 1st January deadline behind us and a Brexit deal done, many businesses are now re-finalising preparations they started making, in some cases, years ago. Accountants will continue to have a critical role to play here. With a number of details still to be ironed out across almost every industry, business leaders will need genuine advisory support to make sure they remain compliant with new and existing regulations.

Harnessing cloud-based software enables accountants to work with a single trusted source of data. Which in turn will provide invaluable insight which they can use to inform their advisory service, helping clients adapt and thrive in 2021, whatever Brexit outcome we end up with.

Helping make tax digital

2020 forced through almost a decade’s worth of digital change in mere months. Undoubtedly, our world is now firmly on track to being digital-first. Businesses, out of necessity, have been taken online, with many processes now automated to manage this new working style. And while in the pipeline long before Covid-19 was a topic of conversation, MTD is a clear example of the UK government jumping on the digital-first bandwagon.

MTD is part of the government’s plans to make it easier for individuals and businesses to manage their records digitally and, therefore, their taxes. While at first glance a minefield for many, MTD is a prime example of how harnessing technology can help accountants, and thereby help them help their clients, automate compliance and manage their finances.

The government’s plans for economy recovery – the Furlough scheme, Kickstart for young people and the Bounce Back Loan Scheme (BBLS) – threw a spanner in the works for how many companies manage their funds. And while designed to speed up economic recovery for all, the billions of pounds spent so far will need to be paid back at some point. The Covid-19 bill will most likely be footed by new tax legislation – with higher rate players paying more. However, with this increase of tax, processes will need to be streamlined further. This is where MTD will step in.

MTD will help businesses manage finances efficiently – something that is vital for moving forward with confidence in 2021. But it is a minefield. And business leaders trying to make sense of it themselves could become even more confused and at worse, non-compliant.

Accountants need to take the helm here. Working with clients to help them understand the new rules, what’s expected of them and how they can pay their taxes online. Further, they should help them look at their wider business strategy, so it resonates with the new digital compliance. This includes not just how they work and all financial outgoings but also addressing business needs such as employee capacity. All of which can be successfully managed by accountants adopting a digital-first advisory approach.

While we have a much clearer idea of what to expect in 2021, unlike in the first half of 2020, it’s undeniable that a huge degree of uncertainty still hangs over businesses – and life in general. However, accountants have stepped up to the plate and acted as a true lifeline to many company executives since the start of the pandemic. A true white knight to businesses in need, the profession will continue to provide essential support in the coming months.

But it will be those digital-first firms that provide an advocacy-first service that businesses want, and need, as they move into the next normal, that will be the ones who truly become champions.