Mike Page, Head of Product Management, MyFirmsApp
How many times a week do you hear the words: ‘I didn’t get your email’? Email was once the most effective way of communicating with clients but now, they have a habit of ending up in their junk folder where they are unlikely to see them, let alone open and read them.
Our own research suggests that the open rate for emails is very low at just 23 percent and as email applications employ more machine learning, this is likely to fall even further. Even if the subscriber has signed up emails by a company, more are being re-routed to spam folders as predictive technology determines whether the user will want to receive that message.
How are successful accountants solving the communication challenge? They are increasingly finding that the best way to reach clients is with consistent messaging across multiple channels and part of this strategy is to use a mobile communications platform that becomes the ‘go-to’ place for all communication.
Businesses are now spoilt for choice with lots of channels to choose from and everyone will have their own favourite but here are our top 5 that are returning great results for the accountants using them as part of their communication strategies.
- Text messaging
Texts have an excellent open rate of 90 per cent so if you want to get a client’s attention and ensure they see your message, this is an effective option. The downside is that the cost of sending is high.
- Chat based Apps such as WhatsApp
Chat based apps are beginning to steal a march over email when it comes to business communications. Companies that need to be able to rely on efficient and streamlined communication systems have started to use them – and smaller businesses are following suit. WhatsApp, for example, provides a simple, multi-platform and ultimately free solution.
When it comes to easing communication, Apps win out against email, as they can provide a way of texting, calling and checking voicemail over Wi-Fi, even when you have no phone signal. However, a disadvantage to their use is that they cannot be linked to other practice systems or joined up with other connection methods.
- Push notifications
These pop-up notifications can be used to help communicate with clients and contacts quickly and easily and delivery can be automated to individuals and groups, which almost immediately ‘ping’ onto the home screen of client’s mobile devices. They have a 93 percent open rate which means that these messages are almost always read – typically, within minutes of delivery. This presents firms with the opportunity to automate the distribution of content, ranging from reminders about an upcoming meeting to news on services and invites to webinars and because they can be automatically triggered by sending an email, they are a huge boon to productivity.
One of their advantages is that is easy to track and identify whether clients have received messages and our mobile platform makes it is possible to automatically link to emails. How does this work? If an accountant sends an email to a client to remind them of a meeting or something they need to do, the email is automatically converted to a push notification message, so they receive both and the chances of getting your voice heard increases significantly.
- Facebook messenger
Today, businesses are increasingly connecting through a powerful, personal new medium: messaging.
Business messaging is gaining a measurable edge over more traditional communication methods as client expectations evolve. The immediacy of messaging wins hands down in terms of appeal as time becomes an ever more precious resource. It also meets the demand for personal client interactions and a streamlined experience.
- Pick up the phone
Don’t forget that picking up a phone to talk to a client can be a very powerful act. With so many different channels evolving, making a business call has fallen to the bottom of the list and yet, the simple act of making that call can be perceived as requiring real time and commitment and that your firm is offering a greater level of care.
A mobile communications platform
Ultimately, it’s not about one channel being better than another; it’s more about employing consistent messaging across multiple channels. One client may respond to texts while another will prefer push notifications so as with most things in life, it’s down to choosing the right channel to ensure the best levels of response.
Employing the appropriate communication channel can be achieved more easily with a customisable mobile communications platform. Every connection goes through the firm’s App and it gives the accountant the flexibility to customise the method of communication according to client preference. This approach can help future proofs the firm’s communication strategy and above all, cuts through all the social media noise and ensures the accountant’s voice is still heard.
VAT domestic reverse charge set to impact over 1.2 million construction workers from 1st March
- HMRC’s new VAT domestic reverse charge for building and construction services comes into effect from 1st March 2021
- Construction firms could see disruption in trader/supplier relationships as well as potential issues with cash flow due to the change
HMRC’s new VAT domestic reverse charge for building and construction services comes into effect from 1st March 2021. With this in mind, specialists from Chartered Accountancy practice, Sheards Accountancy delve into the impact the legislation will have on both the construction and property industries.
The reverse charge will apply to all CIS registered businesses buying and selling construction services that are subject to CIS reporting, apart from those that are zero-rated, up to the point in the supply chain where the customer is the end-user. At this point, the normal reporting and collection of VAT resumes.
Where the reverse charge applies, rather than the supplier charging and accounting for the VAT, the recipient of those supplies accounts for the VAT. In practice, this will mean that where there is a chain of contractors/subcontractors working on a building project, for example, none of those entities will add VAT to their invoices, other than the main contractor who is invoicing the end-user of the property.
Currently, in Great Britain, there are 290,3741 registered construction firms with 1,279,000 people employed in the industry. The construction sector has a monthly output of £14,014 million2 with an average weekly earning in the industry of £6481. But the industry has faced a number of challenges in recent years, which saw 3,502 insolvencies1 in the construction sector in 2019, equating to around a fifth of all insolvencies.
Kevin Winterburn, director at Sheards Accountancy commented: “The changes are a response to what HMRC have described as significant VAT fraud in the industry but they do in a way reflect a lack of trust to those operating in the sector from HMRC. The changes could have huge impacts on a company’s cash flow, so it’s essential that construction workers speak to their advisors, traders and suppliers ahead of 1st March.”
One of the biggest challenges for businesses in the sector is cash flow and a recent survey revealed that 1 in 53 construction companies say cash flow is a constant problem, with 84%4 of construction companies reporting that they had problems with cash flow. When the VAT domestic reverse charge comes into play on the 1st March 2021, experts predict this could have a negative impact on the already stretched cash flow issues in the construction industry, so it’s important for firms to review their existing work pipelines and relationships to prepare for the change.
Specialists from Sheards Accountants share their top considerations to prepare for the VAT domestic reverse charge changes:
From a supplier point of view the legislation change will mean:
- You will need to continue to validate sub-contractors for CIS purposes as usual
- You will need to check and validate your CIS services customer’s VAT status
- You will need to check if you have confirmation that your customer is the end-user – keep a record of it
- If the customer isn’t VAT registered – no change to the current process, charge 20% VAT on income
- If the customer is VAT registered but also an end-user – no change to the current process, charge 20% VAT on income
- If the customer is VAT registered but is not an end-user– reverse charge VAT is applied
From a customer point of view, the legislation change will mean:
- You will need to inform your supplier whether or not you are the end-user
- If you are the end-user, you will be charged 20% VAT and you will be able to reclaim it if you are VAT registered
- If you are not the end-user and the invoice is subject to CIS, the supplier’s invoice should be subject to reverse charge and you can’t reclaim any VAT on it
Review your existing trader relationships. It’s more important than ever to have a clear picture of all the traders and various suppliers you could work with on a project. Reviewing the various traders you will work with ahead of beginning a project will allow you to identify where the VAT should and should not be.
From the 1st March 2021, invoices will have to state that the reverse charge is being applied and no output VAT should be charged. The VAT-registered customers will then need to charge themselves VAT and then claim relief in the normal way. They will do this by using the reverse charge tax rate.
If you are on the flat rate scheme – you may need to leave before 1st March 2021. This should be discussed with your accountant beforehand.
Looking further down the line at work which will begin after the 1st March but which might have already been agreed in contracts, these may need to be reviewed in order to reflect the changes. Contracts should clearly state where VAT is being charged and it’s important that any existing contracts are amended to avoid any issues with payment once a job is complete.
Projects existing prior to 1st of March will need split treatment if they are continuing post 1st of March. If you’re unsure of how to do this, speak to your accountant.
Kevin summarises: “The VAT domestic reverse charge has been a long time coming and it’s something everyone in the industry has been aware of since 2019. But with the 1st March quickly approaching, it’s important for firms in the construction and property industries to start implementing changes to the way they work to make sure they are covered.
“We hope by highlighting the key considerations for everyone in the industry, including suppliers and customers, the changes and responsibilities of each party will be clearer.”
To find out more about the VAT domestic reverse charge please visit: https://www.sheards.co.uk/news/sheards-blog/archive/article/2021/January/vat-domestic-reverse-charge-for-building-and-construction-services
Global dividend payouts forecast to revive in 2021
By Joice Alves
LONDON (Reuters) – Global dividend payments could rebound by as much as 5% this year, a new report estimated on Monday, after the coronavirus caused the biggest slump in payouts since the financial crisis more than a decade ago.
Companies’ payouts to shareholders plunged more than 10% on an underlying basis in 2020 as one in five cut their dividends and one in eight cancelled them altogether.
A total of $220 billion worth of cuts were made between April and December, based on investment manager Janus Henderson’s Global Dividend Index. But there are signs companies are beginning to reinstate at least some of them.
Janus Henderson’s report warned that dividends could still fall 2% this year, in a worst-case scenario. But its best-case scenario sees 2021 dividends up 5% on a headline basis.
“It is quite likely we will see companies pay special dividends in 2021, utilising strong cash positions to make up some of the decline in distributions in 2020”.
Banking dividends will be likely to drive the rebound in payouts in 2021, the report said, after the European Central Bank and Bank of England eased blanket bans for lenders on dividends and buybacks. These were imposed during the first wave of the crisis to prepare for a potential increase in bad loans.
UK lenders Barclays and NatWest resumed payouts this month.
Last year, dividend bans meant banks cut or cancelled $70 billion of payments globally, according to the report.
But the overall global dividend cuts proved less dramatic than expected. In August, Janus Henderson had expected the virus to drive corporates to cut $400 billion worth of dividends, nearly double the eventual outcome.
A resilient fourth quarter of 2020 helped, said Janus Henderson. The likes of German car maker Volkswagen and Russia’s largest lender Sberbank restored payments.
Mining and oil companies cut dividends after a slump in commodity prices, while consumer discretionary companies also took a hit following lockdowns.
European dividends, not including Britain, fell by 28.4% on an underlying basis in 2020 to $171.6 billion. “This was the lowest total from Europe since at least 2009,” Janus Henderson said.
(GRAPHIC: Dividend cuts by region –
In contrast, North American payouts rose 2.6% for the full year, setting a new record of $549 billion, the report said. Canada had the fewest dividend cuts anywhere in the world, the index showed.
Former Bank of England Governor Carney joins board of digital payments company Stripe
By Kanishka Singh
(Reuters) – Mark Carney, former head of the UK and Canadian central banks, has joined the board of U.S. digital payments company Stripe Inc, days after the company was reported to be planning a primary funding round valuing it at over $100 billion.
“Regulated in multiple jurisdictions and partnering with several dozen financial institutions around the world, Stripe will benefit from Mark Carney’s extensive experience of global financial systems and governance”, the company said on Sunday, confirming a report by the Sunday Times newspaper.
Forbes magazine had reported on Wednesday that investors were valuing Stripe at a $115 billion valuation in secondary-market transactions.
A senior Stripe executive told Reuters in December that the company plans to expand across Asia, including in Southeast Asia, Japan, China and India.
The company offers products that allow merchants to accept digital payments from customers and a range of business banking services.
Stripe raised $600 million in April in an extension of a Series G round and was valued back then at $36 billion.
Consumer-facing fintechs have seen a boost to their businesses during the COVID-19 pandemic, as people have been staying at home to avoid catching the virus and have increasingly been managing their finances online.
Carney, who headed the Bank of England and the Bank of Canada, had a 13-year career at Wall Street bank Goldman Sachs Group Inc in its London, Tokyo, New York and Toronto offices.
He is the United Nations special envoy on climate action and finance.
(Reporting by Kanishka Singh in Bengaluru; Editing by William Mallard)
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