Parth Shah

Surviving the storm: How outsourcing can help accountants beat recession

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With the UK economy going through a rough patch, businesses are keener than ever to find ways to save money and stay afloat, and your accounting practice is no exception. While it may seem counterintuitive, investing in outsourced accountants during this time is wise.

After all – they were instrumental in assisting accountants like yourself to guide cash-strapped businesses throughout the pandemic. Now is an ideal time for you to take the help of a strategic partner who can guide your practice through the stormy economic seas of a recession.

In this blog post, we highlight some core talking points on how outsourcing helps accountants pave the way in this unpredictable day and age.

1. Proactive communication

The best accountants do not wait for clients to ask for advice. They go out of their way to share information that clients will find relevant. For instance, there could be government incentive programmes that certain businesses are eligible for and do not know about yet, which you can bring to their attention.

Outsourced accountants can support proactive communication with government agencies, helping your practice cruise through the often-complex landscape of government programs and aids. Especially during a recession, when government support can be a lifeline, having an outsourcing partner who can communicate effectively with the relevant authorities can be invaluable for your business.

They can share real-time information about new or upcoming regulatory changes and how those could affect your client’s business. In this context, Stellaripe accountants can implement systems that let you monitor all your clients’ accounts centrally and get real-time notifications on areas that require attention.

2. Focus on core competencies

During a recession, accountants must focus on their core competencies and provide value-added services to clients. By outsourcing routine and time-consuming tasks, such as data entry or transaction processing, you can allocate more time and resources to activities that directly contribute to your clients’ growth and financial well-being. This helps enhance client satisfaction and retain business relationships.

3. Real-time accounting support

Your practice is frequently only as good as the information it is provided. If you receive information late or it is incomplete, it puts more pressure on you to turn things around to provide the client with meaningful data. Regardless of how efficient your practice staff is, a little help never hurts anyone!

An outsourced accounting partner can address this by offering real-time support for your clients, including updating their books daily, flagging any concerning transaction, running payroll, keeping tax documents up-to-date and filing returns on time.

This may not make money directly, but it will prevent you from making costly mistakes later owing to incomplete accounts or improperly filed taxes. Real-time accounting also facilitates a keen eye on expenses and cash flow – critical during a recession when every penny counts.

4. Superior cash flow management

Having enough cash is critical for any business, especially during a recession, yet many struggle with managing their cash flow. If you are currently overwhelmed with an immense workload, let an outsourced accountant help you negotiate suitable credit terms, plan for timely payments and be strategic about the expenses incurred for your clients.

Moreover, Stellaripe’s expert accountants can set up automated systems to send out invoices and payment reminders to your clients so that money flows in as per schedule. In the challenging economic climate of a recession, effective cash flow management can be the difference between survival and closure.

5. Better risk and cost management

Any business decision can have multiple outcomes, especially during turbulent times. Outsourced accountants can help you choose appropriate responses to best-case and worst-case situations and explain why they work for you.

Armed with that information, you will better understand what choices to make, especially those that involve significant costs, reassess growth plans and navigate regulatory challenges. Outsourced accountants also advise on smarter ways to reduce debt and pay off existing debt.

This proactive approach to business planning and cost management can help your accounting practice stay afloat and thrive during a recession.

6. Greater scalability and flexibility

Recessions can be unpredictable, and businesses may experience fluctuations in their accounting workload. Outsourcing allows you to scale your operations up or down based on the current demand. You can easily adjust the level of outsourcing services to match the client needs without the burden of hiring or laying off your staff.

7. Increased access to specialised expertise

Outsourcing provides access to specialised professionals well-versed in accounting and financial services. You can leverage this expertise to handle complex tasks or projects that require niche skills, such as financial analysis, forensic accounting, or international tax compliance.

Outsourced accountants empower you to tap into specialised knowledge without investing in additional training or hiring.

8. Higher efficiency and business continuity

When you outsource your clients’ accounting tasks, it is one less thing for your in-house practice staff to do. Particularly for smaller accounting businesses, this can offer significant relief to their team members, who are free to engage in more critical, strategic tasks.

This helps maintain business continuity (as no one is chasing down bank transactions or frantically preparing tax returns at the last minute for their clients) and enables a more efficient allocation of resources.

With less overhead, you can use your resources better, improve flexibility, and reduce burnout among your practice staff. By bolstering operational and economic efficiency, outsourcing can help you weather the storm of a recession and emerge stronger on the other side.

9. Dependence on extensive technological proficiency

Many accounting practices still hesitate to invest in new tech because of the costs involved. But the truth is that investment can reap massive returns in terms of time and money saved and money-making opportunities spotted. The most obvious example is tech which automates daily processes and scales them up as the business grows.

Outsourcing can help your practice staff leverage this technology more effectively, enabling access to advanced, competency-based tools and software systems. By investing in adaptable technology via an outsourcing partner, gain insights into critical client financial data, improve accuracy, and enhance efficiency – essential in a recession-stricken business environment.

Over to you

There is no easy way to get through a recession. Its effects are significant and wide-reaching; unfortunately, not all businesses will make it through to the other side. Joining hands with an outsourced accountant can give your accounting practice the best chance of helping your clients to succeed.

Outsourcing is not just about saving costs; it is about harnessing external expertise and technology to drive resilience, efficiency, and growth. Get in touch with us to understand how it could be the ace up your sleeve amidst an uncertain economic landscape.

An accountant’s guide to outsourcing the payroll function of the clients

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Payroll is a crucial aspect of accounting with intricate details that many business owners struggle to manage alone. Outsourcing to a trustworthy party can, therefore, simplify the process, providing a chance for accountants to offer comprehensive professional assistance in this field.

Payroll, however, requires its strategy and optimisation. Here, we offer a brief guide to how accountants can go about outsourcing the payroll function of their clients and thus provide a more comprehensive service experience. Let us go:

What is the payroll fiscal year in the UK?

The fiscal year in the UK runs from 6 April until 5 April the following year and is the period for which a company needs to report its financial information to HMRC. Every April, a company begins employee tax computations from scratch and collects tax saving declarations from them.

In other words, a big case must be made for aligning a company’s payroll operations with the fiscal year and ensuring that their employees take home the correct tax-adjusted amount every time. That is precisely what accountants can help with.

Why is payroll so important?

Payroll may not be fun, but it is essential for businesses. There is the compliance aspect to it, and there is the fact that employees need to be paid on time. It is also an incredibly complex process for those not conversant with the rules.

Things like commission, leave, benefits, pension deductions and overtime pay must be tracked and reported in real-time. It is so complex, in fact, that many accountants end up sidelining it too. That is where outsourcing the payroll function of the clients makes a difference!

Seriously, there is enormous scope here for accountants to step up through payroll outsourcing, take charge of payroll and earn the trust of their clients. Not only are you saving them money and legal hassle, but you are also saving them valuable time.

Benefits of outsourcing the payroll function of your clients in a new fiscal year

1. Better organisation

Outsourcing enables accountants to establish clear records and efficiently organise payroll information for their clients.

2. Tax compliance

It ensures all business tax requirements are up-to-date and in compliance with current regulations.

3. Budgeting accuracy

It is easier for accountants to track expenses and forecast budgeting for their clients in the upcoming year when they have specialist support.

4. Improved accuracy

Taking the help of outsourced accountants at the start of the new fiscal year minimises the chances of errors or inconsistencies, as previous year-end data can be closed, and all payroll information can be reconciled.

5. Easier year-end reporting

It saves the accountants from first validating the earlier month’s or year’s records. In other words, there is no scope for YTD miscalculations when client payroll functions are outsourced from the beginning of the fiscal year.

How to effectively provide payroll services for clients via outsourcing

So you offer payroll as part of your accounting services suite. Excellent! The next step is to think about how you are going to run it, what tools you will need and which clients you will offer it to:

1. Have a clear target audience

When you are just starting out with payroll, it makes sense to pick one sector, develop experience and expertise in the process and then branch out. Certain industries, in fact, have specialised payroll laws where an outsourced accountant can come in especially handy, such as construction companies that need to follow CIS legislation.

2. Be transparent about data processing

Develop clear policies and procedures for handling client payroll data and information. Ensure that you have a secure system for storing and processing client data. This may include data encryption and backup processes.

3. Communicate proactively

Establish clear lines of communication with your clients to keep them informed of the jobs to be turned around and payroll status, respectively and resolve any issues that arise in a timely manner.

4. Review and revise your payroll outsourcing strategy

Continuously review and improve processes to ensure payroll services are delivered efficiently and accurately. Offer additional services such as direct deposit, tax compliance, and employee benefits administration to add value to your offerings.

5. Have an expert point of contact

When you are outsourcing your clients’ payroll, there needs to be one expert who will champion the payroll strategy and prioritise its efficient running. Payroll software will do a lot of the work, but you need dedicated humans to look after your clients too!

How Stellaripe can help with outsourcing the payroll function of your clients

Payroll is a valuable addition to your service roster, but it does not stop there. Done right, payroll outsourcing can serve as a starting point for clients to trust you with more services. For instance, with the insights you get on the health of the business from payroll data with the help of our experienced accountants, you can offer valuable advisory services.

Moreover, since payroll happens at least once a month, outsourcing to Stellaripe gives you a chance to stay in frequent touch with your client and thus offer them more specialised services, like financial planning and forecasting.

Business owners are busy, and if they trust you, they will happily hand over all of their accounting/finance functions to you. Simply put, outsourcing client payroll with Stellaripe’s help will free up your time and save you from compliance headaches, ensuring your clients’ employees are paid accurately and on time.

Over to you

In conclusion, the humble payroll process can be beneficial for accountants to build recurring revenue and demonstrate how well they understand their clients. By syncing payroll with the fiscal year, accounting becomes much simpler, and employees always get outsourcing support. This is a major value-add for busy clients and, thus, a must for smart accountants in 2023.

If you are thinking of outsourcing the payroll function of your clients but do not know where to begin, get in touch with us by following out the contact form.

How accountants can maximise what their clients do with cloud accounting

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It has become fashionable to move accounting to the cloud basically because it makes sound business sense. In a largely remote world, cloud accounting offers the most convenient way to ensure that team members everywhere have complete insights into how business finances are doing at any point in time – not to mention the security and ease-of-use benefits of cloud accounting!

However, cloud accounting needs to be optimised like any system to suit specific needs. Many small businesses fail to fully leverage the potential of cloud accounting, thereby missing out on key financial benefits. Here, we offer our favourite tips accountants can follow to help their clients make the most out of the transition to the cloud.

1. Automate invoices

Cloud accounting solutions allow your clients to create invoices with their branding for visual consistency and automatically send them out based on data pulled from their transaction feed. You can also automate reminder emails for their customers yet to pay.

2. Automate bill capturing

Bills come in all sizes and formats, and manually entering the data from each of them can be a hassle. Luckily, cloud accounting solutions today come with an auto-capture feature that extracts information from digital invoices, email receipts and even photos of paper bills. To further simplify things, you can set up ‘rules’ for vendors with whom your clients regularly transact so that repeated bills can be auto-entered every week or month.

3. Manage KPIs in real-time

Modern cloud accounting solutions come with dashboards and comprehensive reporting features that allow your clients to track their KPIs in real time. With all the data in one place, they can easily pull up customised reports with a few clicks – no need to sort through spreadsheets or keep calling for help.

4. Have bank feeds in place

A bank feed ensures all transactions come directly into the accounting software to be matched up against bills and invoices. It is beneficial for transactions that occur regularly each month and do not need separate invoices. Most cloud accounting solutions easily enable bank feeds, and you can ensure your clients enjoy this feature hassle-free.

5. Use a payment facilitator

Integration with platforms like Stripe or PayPal makes it easier for clients, their customers, and vendors to pay directly through the invoice with a credit card. You can also set up their cloud accounting solution to automatically mark invoices as paid when customers use the facilitator.

It is a good idea to give your clients’ customers the option to save their credit card details on file so they do not need to ask them repeatedly.

6. Set fraud alerts in place

Setting them up is free and straightforward, but they can save your clients potentially millions. With cybercrime on the rise everywhere and hackers becoming more sophisticated, fraud alerts serve as an extra safeguard that keeps your clients and their bank informed of any potentially suspicious or unscrupulous activity.

For instance, some fraud alerts ask for extra confirmation before authorising transactions above a specific limit. Others will require two-factor authentication before every transaction. Look for the subscription that works best for your clients.

It is also advisable to educate the clients’ team so they are always looking for fraudulent or scam activity. Set up secure protocols for authorisation of payments – for example, they would never issue a payment to someone on the back of just an email from you.

7. Take a backup of client data

Whether or not your clients are victims of a cyber-attack, you must implement the best possible security measures. A full data backup will be a massive life-saver in this regard.

There is no telling what can happen if your clients’ critical financial information gets into the wrong hands. Be sure to regularly back their data up, preferably on a secure cloud server, to access it quickly.

8. Integrate multiple solutions

Regarding integrations, it is essential to pick an accounting software with an open API structure so multiple business systems can be synced. Whether a CRM solution or inventory management software, all your clients’ data should flow freely without manual intervention.

9. Reconcile accounts once a month

With a cloud accounting solution, reconciling your clients’ records with their transaction feed becomes a breeze. It is good practice to do so once a month just to ensure everything is balanced and to rectify any corrections or missed entries quickly – if you have set up the automations correctly, this should take very little time!

10. Choose the most cost-efficient option

Not all cloud accounting solutions are created equal – what might work wonderfully for one business may not work for all! Choose a solution that is the best balance of features and cost. Especially when your client is a small business, the fanciest and most costly software may not be ideal.

Pick a good budget solution that lets your clients scale up as they grow, and take it from there. This may seem self-evident. However, there is simply no substitute for the convenience, speed, accuracy and scalability your clients will enjoy when implementing an accounting software solution.

The possibilities are many, from auto-filling daily transactions based on the bank records to streamlining workflows and document storage. Make sure you suggest a solution equipped with all the latest accounting and tax rules so that the clients’ books are automatically sorted into shipshape condition

Bonus tip:
Outsource and create time for your practice staff

If you are looking for better ways to maximise what your clients do with cloud accounting, you must take the help of outsourced accountants. That way, you free up valuable time that can be better spent elsewhere, such as offering advisory services to clients or networking.

With the shortage of accountants and bookkeepers, recruiting the right staff these days is doubly difficult. Hence, you benefit from instant access to skilled people and eliminate costly benefits packages that would otherwise be invested for a full-time or part-time employee.

Moreover, outsourced accountants know what they are doing, so you can always rely on their expertise and way of working to turn around things faster for your clients.

A cloud accounting solution, ultimately, is only as good as those using it. Modern solutions come with various options to help your clients achieve business goals, be it hitting the sales targets every quarter, becoming profitable or growing at a certain pace.

By leveraging those features, your clients save time and money, streamline their operations and keep their focus on what matters the most, i.e. running and scaling their business. If you would like help to streamline cloud accounting processes for your clients, book a free consultation with Stellaripe experts.

The role of accountants and bookkeepers in a VUCA environment

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We live in a highly dynamic world, and keeping a small business afloat amidst economic chaos is challenging, even for seasoned entrepreneurs and experienced accountants.

There is a technical term for that kind of chaos – VUCA, a military term coined in the 1960s, which stands for Volatility, Uncertainty, Complexity and Ambiguity. Do not let all these words scare you off, though. There are strategies to overcome them all and keep your business tip-top.

In this blog post, we will discuss VUCA from the perspective of accountants and bookkeepers to small businesses. Let us start by breaking down each of the four concepts in the acronym:

1. Volatility

This refers to unexpected challenges that occur during the normal course of business, such as a supplier going out of business or a natural disaster that blocks road transport. Volatility can be weathered by adjusting the business cash flow and budget to reduce costs and run leaner operations so that business does not cease when challenges occur.

2. Uncertainty

This refers to a lack of awareness about how an event, trend, technological advance or competitor will impact one’s business. Keeping oneself informed about trends, having industry mentors to consult and keeping watch on the profit and loss statement will ensure that the business is always up to speed with potential opportunities.

3. Complexity

This refers to the interconnectedness of business processes and decisions, some of which are inevitable but too much of which can cause confusion and a lack of clarity. Resolving this requires timely bookkeeping and inputs from accountants and strategy experts on how to simplify processes and let go of what is unnecessary.

4. Ambiguity

This involves hesitation about entering a new market or launching a new product owing to many unknown elements. Sufficient market research, consultations with experts and constant ROI tracking will give the business owner the necessary insights about whether the new venture is going as planned.

Put yourself in the best position as an accountant in a VUCA environment:

1. Upgrade accounting software as needed

Not all software solutions are created equally. As technology evolves, tools will evolve too, and accountants and bookkeepers need to be the first to embrace upgrades and explain to business owners why those upgrades are worthwhile.

In a VUCA world, there is no scope for resistance to change or clinging to old tech because it is familiar. If a new tool has better features, that’s what needs to be used.

2. Maintain complete digital records

If the business does not already maintain digital records, it is vital to do so immediately. Several tools can make transcription easier, such as apps that scan handwritten documents for transaction information. You need to have access to the full picture your client is experiencing.

3. Develop critical thinking skills

VUCA environments require accountants and bookkeeping to think creatively and critically, evaluating complex information and developing innovative solutions. Sure, going by the book is vital, but it is essential to think out of the box too!

4. Have clear lines of communication

To achieve simplicity and productivity, it is essential to be transparent about how things are going with the business. Accountants and bookkeepers need to immediately inform business owners of any unexpected costs, losses or changes in the law that need attention.

Similarly, the latter need to keep their accountants informed about any changes in suppliers, expansion plans, disputes, errors or anything else that has a bearing on the books of accounts.

5. Reexamine the business model

A top-to-bottom assessment of the small business model is vital to weed out inefficiencies, even small ones. Are there buyers who consistently fail to pay on time? Are there regular delays in supply from a specific location? Are there bottlenecks in production?

Are there too many approvals needed for routine tasks? Time savings matter as much as money savings – corrective action taken at the right time can boost profitability down the line – and accountants can help substantially with that.

6. Set up contingency budgets

It is good practice to have extra funds on hand for unexpected situations. Apart from a general emergency fund, the business can set aside money for specific contingencies depending on the nature of the industry. For instance, if the business relies on seasonal labour or if the place of business is in an area prone to natural disasters, an extra budget can help to tide over such occurrences.

7. Build strong relationships

Collaboration and communication are key in a VUCA world, and accountants must work closely with other departments, stakeholders and clients to ensure successful outcomes.

8. Have clear KPIs

Every small business needs to have KPIs for the quarter and the year. In addition, the accountant should reassess these KPIs at intervals so that the numbers can be changed if required, such as if the business decides to cut back production owing to a sudden drop in raw material supply.

9. Stay informed

Accountants in a VUCA environment need to be strategists as much as they are bookkeepers and financial advisors. They need to keep abreast of industry trends and changes to business law so that they can advise their clients in advance of any sudden negative impact.

10. Be proactive

Accountants and bookkeepers must proactively identify and address potential risks and opportunities and have contingency plans for potential scenarios.

Is outsourcing useful for accountants and bookkeepers in a VUCA environment?

Outsourcing can be helpful for them in a VUCA environment as it can help them focus on core tasks, reduce workload, access specialised expertise, and lower costs.

Outsourcing non-core functions such as bookkeeping, payroll, tax preparation, and other administrative tasks gives them more time and resources to focus on strategic planning and decision-making.

Additionally, outsourcing provides access to the latest technology and best practices, helping them stay competitive in a rapidly changing business environment.

Over to you

In conclusion, accounting in a VUCA environment should not be a nightmare. It simply calls for a higher degree of vigilance and an eye for detail, as well as an adequately formulated accounting model that’s resilient to change.

Accountants and bookkeepers play a significant role here, as their expertise can guide small businesses toward the best financial strategies for their specific needs.

So if you are an accountant, you have a whole new target audience to pitch your services to, enabling your clients to enjoy hassle-free financial management. Contact Stellaripe to learn how we help accountants and bookkeepers perform superiorly in a VUCA environment.

The true cost of recruiting an accountant in the UK

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Running an accounting business can be a costly affair. As a practice owner, you are constantly making decisions about how to spend your money, and taking on new employees is one of the biggest decisions you will make.

But talented people are the backbone of any business, so getting professional and skilled accountants on board is essential. However, it is not just about the salary of the person you hire. There are other costs to consider, such as training and equipment, pension and sick pay.

So, if you are a small accounting business owner, keeping all types of costs in mind while recruiting is vital.

So, what is the true cost of recruiting an accountant in the UK?

The cost of recruiting accountants in the UK can vary greatly depending on the type of services you require and the qualifications and experience you want the person to have. You also need to consider upon what employment basis you wish them to work, for example, do you want someone full time or part time, as an employee or as a freelancer, from an agency or direct.

Each will have pros and cons and its own respective costs, employment legislation and so on associated with it. If you decide to use a freelancer, you will find some may charge an hourly rate, while others may charge a flat fee for specific services.

The cost may also depend on the size and complexity of your business and even where you are located – you will pay a premium in London for example. It is always a good idea to get quotes from a few different accountants and compare their services and fees before deciding.

Now, let us look at the hidden costs of recruiting and why getting a new employee onboard surpasses the cost of outsourcing accounting services.

1. Recruitment

Most small accountancy practices do not need an HR team. With just a handful of people, you can run a business efficiently and manage the HR requirements in-house. However, every new recruit is crucial when you have a small team.

From a time perspective, many practices turn to outside recruiters when recruiting someone new. It means they don’t waste their time trawling through CVs and first interviews, only seeing the candidates most appropriate for the role.

However, there is of course, a charge for this work which tends to be between 15% and 20% of a candidate’s first annual salary, and can be as high as 30% for hard to fill roles.

2. Background checks

When you bring someone new to the team, it is essential to do some digging first. A background check can be a real lifesaver in the long run as it will give you an idea of who you are recruiting.

It is also a legal requirement to check that a person has a right to work in the UK and you can incur a hefty fine if you are not able to demonstrate that this has been undertaken.

It is recommended you gain a reference from past employers and check their education including professional qualifications. Depending on your business type, you might need to obtain security clearance/get a DBS check but there is a cost associated with this.

3. Onboarding and training

When you think about the cost of recruiting a new employee, it is easy to forget about all the expenses that come with onboarding and training. But these costs can add up.

Depending upon the size of your company, a period of induction should be planned and training set up for any specific software or equipment they will be required to use. And do not forget the time and support other staff members will need to give the recruit while the latter settles in.

4. Office space and equipment

When you are bringing someone new on board, there are a lot of essentials you need to provide for them. They will need a desk, desktop and/or laptop, and phone to do their job. This obviously does not count if you have a remote working setup.

You should also factor in the purchase of additional software licences. Then there is the cost of any certifications the new employee might need. These things can add up unless you are replacing someone and already have everything required.

5. Employee salary

The salary of a recruit is the first thing that comes to mind. And it is no surprise that it is a significant expense. But, the amount you will pay for a salary can vary dramatically depending on things like how much experience you are looking for, the details of the contract, and other factors such as shortage of appropriate candidates.

6. Bonus and insurance

Not all accountancy practices offer bonuses, but more and more are starting to see the benefits of doing so. It is a great way to acknowledge good employee performance and keep your staff around for longer. In addition to bonuses, you are also required to contribute to your staff’s National Insurance (NI).

The amount employers pay is called Employer Class 1 NI, and it is calculated at a rate of 13.8% of the employee’s gross salary. This will be paid against any overtime or bonuses they might be earning as well so it is worth bearing in mind.

7. Pensions

You must remember anyone you hire will automatically be enrolled in a basic corporate pension plan as part of the auto-enrolment programme. As an employer, you must contribute at least 3% of each employee’s monthly salary towards their pension. So, it is another cost your accountancy practice must consider.

8. Miscellaneous costs

These include the HR costs for new hires – from holiday cover and maternity leave insurance to sick days and software licensing – there are a variety of other expenditures to take into account.

Can outsourcing help reduce these recruiting costs?

Taking someone on in your business is a big decision, especially when you are looking for qualified staff where there are shortages. The cost of not recruiting can be even higher though with your team taking on extra work or an inability to grow your business in the way you want. What is the alternative?

Outsourcing accounting services can be a way for your accountancy practice to reduce costs associated with recruiting in-house accountants whilst fulfilling your requirements. When you outsource, you typically pay a third-party service provider like Stellaripe for the support you need rather than recruiting an employee and paying a salary, benefits, and other expenses.

You will invariably be offered different service levels depending upon the work you need to have completed, its frequency and so on. For example, you may just want someone on an ad hoc basis to undertake the overflow work your team is struggling with.

Alternatively, you may be looking at a specific growth plan and want to take on a full time equivalent (FTE) service where you have an appointed person looking after a set level of work for you – like an extension of your team.

Specialised outsourced accounting firms can provide you access to a broader range of expertise and experience than recruiting in-house accountants, which could lead to more efficient and accurate client management.

In addition to cost savings, outsourcing can free up internal staff to focus on offering high-end services, such as cash flow budgeting and forecasting.

Over to you

Recruiting a new employee for your accountancy practice can be a real headache – it is expensive and takes up a lot of your time. And, once you have hired someone, their efficiency and productivity can significantly impact your practice.

On the other hand, outsourcing accounting services can be more cost-efficient and provide access to specialised expertise. At Stellaripe, we offer a wide range of accounting services specifically tailored for UK accountancy practices, and our rates are lower than the average accounting services costs for small businesses.

With our expertise and experience, we can ensure that your job is done accurately and on time. So, if you want to save tens of thousands of pounds a year, do not hesitate to contact us and learn more about how we can help.

How to become a £1 million accountancy practice

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Ask any UK accountancy practice owner why they made a decision to set up their business, and you will hear a common theme. It is obvious – is it not? Owning a practice provides accountants with a level of independence and autonomy that is impossible for them as employees.

They also feel they have more control of their work, that it will be more intellectually stimulating, and that owning a successful practice can provide a sense of professional fulfilment – not to forget the financial perks!

However, growing a practice is not easy. It is essential to note that building a successful business entails working long hours, solving complex problems, chasing challenging clients, managing cash flow, retaining and nurturing talent, and dealing with the pressure and uncertainty that come with ever-changing tax laws and legislation.

Achieving £1 million in revenue is a significant milestone for any accountancy practice. It requires hard work, dedication, and a willingness to adapt to changing market conditions.

So if you possess an entrepreneurial spirit and a desire to build a £1 million accountancy practice, we want to help you. This article discusses the biggest hurdles accountants face while growing their business and what actionable insights they can take to hit the mark:

Common roadblocks to growth in accountancy

If making big bucks was easy for business owners, everyone would have their venture. But that is not the case. There are problems that even the brightest minds building their accountancy practice face, some of which include:

  • Leadership: The inability to execute the vision and implement the core values consistently across the team. Remember – the bottleneck is always at the top of the bottle!
  • Technology and infrastructure: The lack of systems, processes, application stack and organisational structures to handle the complexities in communication and decisions that come with growth and scale
  • Sales and marketing: The inability to ramp up an effective marketing function to both attract new relationships (clients, talent, vendors) to the business and address the increased competitive pressures (and eroded margins) as you scale
  • Cashflow: The inability to maintain adequate cash flow to sustain inorganic growth and further expansion
  • Price and scope creep: The inconsistent pricing structure and its review and lack of clarity concerning the scope of work
  • People: The inability to attract, hire, train, retain and manage talent

What can you do to join the £1 million club?

Making your accountancy practice worth £1 million requires a well-thought-out plan, a focus on critical areas and a consistent effort. Think of it as a transformation project that compels you to:

1. Revisit your why's and values

You will not achieve the £1 million turnover mark unless you make it your end goal. Set aside dedicated time to reflect on your practice’s current state, its strengths and weaknesses, and the growth opportunities.

Understand the purpose and driving factors behind it to define its mission and inform the growth strategy. Find your “why.” Why are you running your practice? How are you making a change in your clients’ lives?

Create a framework with clear goals, objectives, and milestones to guide the practice forward. This strategy should align with your mission and your business strengths and opportunities.

2. Attract the right kind of clients and offer superior service

Consider developing expertise in a specific area of accounting, such as small business accounting or tax planning. This will help differentiate your accountancy practice from competitors and attract clients looking for specialised services.

In addition, please keep in mind it is vital to target the offerings to those clients that align with your business vision. When looking for a target market, ensure it is large enough, and there is demand for it – do your homework first.

3. Engage with the team and communicate your vision and goals

Attracting and hiring “A players” at all levels is as critical as landing the right clients. A strong team of qualified accounting professionals is instrumental in building a £1 million accountancy practice. Bringing fresh talent with the necessary expertise can help your business have the resources it needs to meet its growth goals.

Consider investing in employee training and development to help your employees sharpen their skills and attain new knowledge to deliver a superior service. Moreover, allocate the right jobs to the right people. Identify key roles and responsibilities and assign them to appropriate individuals or teams to ensure the tasks are completed effectively and efficiently.

4. Leverage technology for scalability

Identify and address any bottlenecks or inefficiencies preventing the business from growing. Invest in tools and software that help improve efficiency, allowing the business and your staff to function like a well-oiled engine, take on more clients, and expand.

Automation and digitalisation are becoming increasingly important in the accounting industry. By exploring using cloud-based accounting software such as Xero, QuickBooks and Sage, you can manage tax preparation, filing, and compliance tasks for all your clients in real-time and transparently.

Similarly, establishing and documenting workflows can help your staff to complete and deliver the tasks, in the same way every time, resulting in quality. Leverage practice management tools like Accountancy Manager, Xero XPM, Senta, Pixie, Karbon and IRIS to bring your practice operations under control.

5. Price your services appropriately

Charging properly for your services can undoubtedly play a role in helping you become a £1 million accountancy practice. Here are three ways to go about it:

  • Value-based pricing – This approach involves pricing services based on the value you provide to your client rather than on an hourly rate or the service cost. This can attract higher-paying clients willing to pay more for high-quality services.
  • Package pricing – Offering bundled services can provide more value to clients and make it easier for them to understand and compare pricing. With this method, you can give them more service combinations, closing more sales.
  • Differentiation-based pricing – This involves offering different pricing for different types of services and clients – for example, discounted rates for smaller clients and premium services for larger clients at a higher rate.

However, please keep in mind that there is not a one-size-fits-all solution when it comes to pricing. It is essential to strike a balance between charging enough to cover costs and remaining competitive in the market. Therefore, regularly review your pricing strategy and make adjustments to stay as attractive as possible for your clients.

6. Outsource

Outsourcing certain aspects of your clients’ functions can help you improve efficiency, reduce costs, and free up resources that can be used to grow your accountancy practice.

For instance, you can take low-end or tedious tasks such as bookkeeping and payroll off your staff’s plate, allowing them to focus on providing value-added services like tax planning and budgeting and having direct client interactions.

An outsourcing accounting company like Stellaripe can handle end-to-end accounting functions such as bookkeeping, year-end accounting, company secretarial, payroll, tax preparation and filing, and practice management like an extension of your in-house staff.

This can free up your time and allow you to take on more clients and expand your services, giving you a competitive advantage.

7. Expand your client base with robust marketing

A solid online presence is crucial for business growth in today’s digital age. To attract more clients or generate more revenue from the existing ones, you must market your accountancy practice confidently and transparently.

Take help from a specialist agency that offers digital marketing services for UK accountants, such as content creation, SEO, social media, and PPC management, to drive higher website traffic. Your practice should not be left behind as the world continues to shift online. Building relationships with other industry professionals can also help generate new business.

8. Explore merger and acquisition or franchising

If you are looking for a proven route to develop your own profitable accountancy business and an asset for your future, exploring inorganic avenues such as M&A or the franchise model will provide you with the systems and support you need to grow your business quickly and successfully.

Over to you

Ultimately, becoming a £1 million accountancy practice will require a combination of hard work, strategic planning, and a commitment to continuously improving and adapting to the market conditions. By taking smart and innovative steps, UK accountants like yourself can be in a better position to accomplish goals.

How to identify which clients need help with MTD ITSA

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The impending roll-out of MTD for ITSA in 2026 will fundamentally alter how your clients maintain and submit their financial data. Many may need your help when they start using accounting software to keep digital records and send paperwork to HMRC.

However, the basic question remains – who needs to use MTD for ITSA? Under the new legislation, the self-employed and landlords earning above £10,000 must submit quarterly updates, a Final Declaration, and one End Of Period Statement (EOPS) every tax year.

For the same, they need MTD-compatible software for digital record-keeping and sending updates to the taxman.

No one-size-fits-all strategy to work in MTD ITSA

Knowing how to give the best degree of support and to which clients is crucial as your accountancy practice gets ready for MTD ITSA.

When defining software options and ensuring correct information is conveyed to the right people at the right time, the recommended strategy is segmenting your clientele to help them cultivate new habits and behaviours for Making Tax Digital.

A one-size-fits-all strategy to introduce MTD might not work if you have a diverse clientele. You can divide your clients into groups based on their individual needs to make a good support plan that meets their needs. To help you and your clients migrate to MTD as smoothly as possible, we have compiled some segmentation advice in this blog post:

What is client segmentation for MTD ITSA?

Client segmentation is the process of putting your customers into groups based on things they have in common or what they need. Part of segmenting clients for MTD is figuring out whether and when your clients will need to follow the MTD rules, how ready they are, and how much help they will need from you.

What are the benefits of segmenting clients for MTD for ITSA?

Do all businesses need to register for MTD for ITSA? Depends. Where MTD is concerned, client segmentation is crucial in getting ready for it. It can help you:

  • Recognise the diverse needs of your clients
  • Determine which clients will want further coaching and guidance to prepare for MTD for ITSA
  • Create a strategy to assist clients with the MTD for ITSA transition and customise your services to meet the needs of individual clients

When should your accountancy practice commence segmenting its clients?

Developing a client segmentation plan right now is a good idea. Although MTD for ITSA may seem far off, you should prepare for the April 2026 deadline sooner rather than later. The shift will go more smoothly and without as much stress if you prepare your practice and clients well in advance.

How to segment clients for MTD for ITSA

Naturally, as an accountant, you will have to take on a more advisory role with your clients, teaching them how to use a cloud-based accounting tool, helping them file quarterly submissions, and ensuring compliance. There is a lot on your plate! Here is how you can segment your clients for MTD ITSA:

1. Collate updated information

As the first step, ensure that all your client information is up-to-date. Analyse your client list to see if any have begun using bookkeeping or bridging software without your notice. You might run a survey of your clients to learn more about their existing record-keeping practices, level of digital literacy, and familiarity with MTD for ITSA.

2. Organise your client data

Assemble the most important information about your clients on a spreadsheet. Create columns for details such as their existing bookkeeping technique, the number of employees they have, and whether they already use any tools for filing taxes or record-keeping.

3. Place scores against your clients

During client segmentation, a rating system can be beneficial. To assign points to each client based on how they meet the criteria, you may select the criteria that show how much assistance a client would require to move to accounting software.

For instance, “experience with technology” could be one of your requirements. A client who already utilises many business applications and does online banking on their smartphone would receive good scores. On the other hand, a client who does their banking in person and maintains their accounts on paper would receive a lower score, indicating that they are more likely to need help.

4. Analyse the outcomes of your segmentation

The spreadsheet and subsequent scores you draft will tell you how well-prepared your clients are for MTD ITSA. As a result, you can find out how many resources will be needed to make the switch to accounting software as smooth as possible.

The spreadsheet will indicate which software is best for your clients based on the type of business and the number of employees. You can get your practice and your clients off to a good start with MTD and avoid complications in the future by guaranteeing that you have chosen the most appropriate software for every customer.

5. Define your Making Tax Digital workflow

Once you know which client groups you have, you can determine how to familiarise each segment with MTD and transition them to your preferred accounting software. Start with the group you have specified will be the easiest to migrate as this will allow your practice to gain experience with the process.

Then you can start building a structure for all the other groups and making communication plans that will involve your clients, and give them all the required details. Your strategy could include webinars, video meetings, events, and one-on-one calls, depending on your clients’ wants and how many resources you have.

Depending on the number of MTD clients you oversee, you can categorise them all based on the potential assistance requirements for each client. For instance:

  • Class A: Will require little help – they will take care of filing quarterly updates, and you will handle the annual changes and confirmation.
  • Class B: Will require some help – they will manage the data gathering, and you will handle the confirmation and annual adjustment changes.
  • Class C: Will require additional guidance – they will probably need help collecting data consistently and may require ongoing support for submitting at the end of the year and every quarter.
  • Class D: You can offer an outsourced solution to those who cannot handle the MTD ITSA requirements or are not interested at all.

This is merely a recommended format; you can create one that works for your accountancy practice. You could also include other information like if they are using software, have a business bank account, or have any special tech needs.

In a nutshell

By asking your clients the questions mentioned above, you may get to know them better and decide how to best expose them to technologies that will benefit them in the long run. The good news is that Stellaripe offers support in MTD-related client data migration.

Our staff can ensure that your clients are ready for the transition to MTD for ITSA well before the deadline. Our experts have experience with all the commonly used software and can help you easily. Book a free consultation to get expert insights on MTD for ITSA today!

Categories MTD

The accounting outsourcing era: Are accountants becoming obsolete?

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It is not uncommon to see accountants in the UK outsourcing their clients’ accounting work in this day and age. Any function, such as tax preparation or payroll that is labour-intensive or time-consuming can be delegated to a reputable accounting outsourcing service provider.

And for a good reason. Outsourcing frees up accountants to focus on scaling their practice. It helps them reduce the costs of recruitment, training and infrastructural development, and it minimises their workload. What more does an accountant want?

But is outsourcing making accountants obsolete?

After all, the accounting outsourcing company manages the clients’ books, payroll, tax filing, and so on. What is the need for that team of practice accountants?

It is true an outsourced accounting services provider hires employees for its business to perform numerous accounting tasks and is responsible for their pay, benefits, and training, thereby reducing labour costs for the accountants’ practices.

However, that cannot be considered a replacement for the actual practice staff. Outsourced outsourced accounting services providers function more like an extended team for UK accountants.

While the former handles the day-to-day record-keeping, accounts payable, accounts receivable, payroll, tax returns, financial reporting, and other services for the end clients, the latter focuses on specialised services and face-to-face communication.

That could include advisory and business consulting support, budget analysis, and cash flow planning – anything that helps accountants deliver more value to their clients, resulting in higher profits and increased brand reputation.

Now that we have addressed that concern, let us look at the benefits outsourcing can bring to UK accountants.

As accounting took a specialised role focusing on strategic decision-making and capital optimisation, outsourcing part of the client accounts to an accounting outsourcing service provider rather than managing them in-house has gained precedence in the past decade.

1. Business continuity

Accounting is a time-sensitive function, and frequent interruptions can negatively affect the business. For instance, a client may face loss of records, delayed payments, and penalties when an accounting firm’s standard workflow is hampered due to system downtime, inadequate infrastructure, and workforce shortage. COVID-19 just taught us that!

With such gaps in business continuity, accountants often risk losing clients to a competitor or missing deadlines. Through outsourcing, they get to work with accounting outsourcing service providers stocked with adequately skilled and trained Xero- and QuickBooks-certified accountants having the know-how of the UK accounting and taxation laws, offering uninterrupted support and complete peace of mind even in an unplanned service disruption.

2. Data security

Accountants across the UK and the globe are fast embracing the digital shift and recognising that technology is constantly moving forward.

Although the increased use of cloud accounting solutions has streamlined processes for accountants, it has resulted in a massive volume of confidential data, which could be internal or client-related.

Either way, it is the responsibility of accountants to protect it. Even if client accounts are outsourced, the accounting outsourcing service providers go out of their way to exceed the industry standards to protect sensitive financial data.

Stellaripe, for instance, deploys remote desktop software and VPN solutions to log in and access client files on the accounting firm’s system to do the work. No confidential data is ever stored on Stellaripe’s cloud servers.

We have also implemented several information security measures, such as IP address restrictions, a breach notification system, destruction register maintenance, and 256-bit bank-level encryption for data transfer and management.

Other physical security measures include disabled USB ports, limited printer access, and continuously monitored office premises and web access. Unsurprisingly, accountants in the UK rely on outsourcing for data security support.

3. Control over the quality of output

Even today, many accountants are not comfortable outsourcing because they feel they will not have control over the output of their clients’ accounts. However, that is not the case. Accounting outsourcing service providers receive continuous training on the latest tax laws and seasonal industry-related issues to deliver the best possible service.

Stellaripe, for instance, has been built on the provision of UK accounting services for UK accountants. We have extensive and detailed experience in UK taxation, UK practices and UK accounting requirements. In fact, we are frequently better informed than our client accountants, which reflects in our work. Additionally, we implement a checklist-assisted peer review system to assess the quality of financial statements and tax returns we generate for our clients.

Accounting outsourcing service providers generally understand the implications of accessing confidential data remotely and sharing financial statements, and real-time accounting reports whenever requested – despite the geographical gap and different time zones. So, neither the control over client accounts nor the quality of output delivered poses a problem.

4. Process improvement

With their knowledge of accounting processes, service providers are better experienced in assisting accountants in the UK with process improvements in functions across the board. This is especially helpful for legacy accounting firms that may primarily rely on traditional processes. For instance, Stellaripe helps the client automate their entire accounting practice, which includes workflow automation and practice management, invoicing and onboarding of clients, bookkeeping, payroll information requisition, year-end queries, and a few company secretarial tasks.

Outsourced accounting services providers can help them analyse their current operating model and draft an appropriate road for process automation and the removal of redundancies. On the other hand, for digital-first accountants, such assistance can help them become more operationally efficient because of outsourcing.

5. Flexibility and creative freedom

Outsourcing client accounts frees accountants to brainstorm and execute different ways to scale their practice. They know they have the support of an expert team to manage the rudimentary accounting functions for their clients. Besides, at their disposal, accountants have the financial acumen required to minimise red flags and make progressive decisions.

Advisory accounting, for instance, includes offering accounting support to practices and other value-added services such as advisory and business consulting support using suitable tech and app advice.

It equips accountants with the information and expertise they need to make smarter and more profitable decisions for their clients than if they only provided simple compliance accounting services. Outsourcing helps accountants flex, pivot, and plan nimbly.

Over to you

Thanks to outsourcing, UK accountants can hire employees and gain access to a larger talent pool, not restricted geographically. They can work more efficiently, run errands, deliver high-end services, drive more business, and generate more profits in the long run.

Outsourcing is not making accountants obsolete; it empowers them to tap into their full potential. As the UK’s leading accounting outsourcing company, we leave no stone unturned to deliver excellent services to our clients. We are 100% reliable and professional. Try us!

Why accounting outsourcing matters more than ever in 2023

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As accountancy practices chart their growth plans for 2023, the chief question on their minds is, ‘how do I expand my business efficiently while continuing to provide stellar service?’ While big accounting firms commonly answer this with ‘outsourcing,’ the small and mid-sized practices still hesitate to pay outsiders to handle accounting functions for them.

The truth is, outsourcing is not just an ‘option’ anymore – it has been proven to be one of the most profitable, strategic and efficient methods to scale up, optimise processes and access top talent at a reasonable price. Here is why you need to consider outsourcing for your accountancy practice to grow if you have not already:

1. Access to better talent

A prerequisite to growing is having the best accountants on one’s team. And yet, the talent crunch continues to be a core challenge for accountancy practices across the UK. Without enough team members, your existing staff is often stuck handling compliance and admin tasks (which may not be their actual area of expertise or interest) rather than doubling down on high-end or advisory services (which is where the money is).

With outsourcing, however, routine accounting, tax, and payroll tasks are handed over to external experts who can do them faster and better. They can also provide technical higher-end expertise if you need that help too – they do not just do the basics.

2. Access to better tech

Accounting software solutions can be tricky to implement and integrate, especially when one considers that it is a relatively new innovation and that many old guards are not that comfortable with technology. Instead of figuring out which software to buy and how to train your in-house staff, why not get outsourced cloud accountants like Stellaripe’s on board who already have all the top-notch tools and know their way around them? They can help you understand and set up the right processes and app stack.

3. Easier to scale up

It is no secret that the UK accountancy market is becoming more competitive every day. New practices are entering the market at a rapid pace, bigger ones are acquiring smaller firms, and everyone is determined to fast-track their growth after the pandemic slump.

Amidst all this, those caught up in admin work and maintaining their existing client accounts often do not have the scope to scale. Who can blame them? When roles are outsourced, you get swift access to talent and can thus implement expansion plans much sooner.

The more talent you have with you, the faster you can get quality work done for your clients and the more money you can make – in other words, economies of scale.

4. Cost savings

The biggest reason why accountancy practices hesitate to outsource is their assumption that it will cost a lot. And it is true – the best accounting outsourcing firms will charge high prices. The cost, however, will pay for itself in numerous ways, for example:

One – you need only pay an agreed price, and there is no need to pay for benefits, sick and holiday pay, pensions and training costs which you would have to include for a full-time employee, so it is less than taking on a new employee.

Two – the kind of efficiency you enjoy when outsourced accountants handle your work improves the quality of your output and thus attracts higher-paying clients. Outsourcing is a big win for accountancy practices – trust us!

Three – you can take on additional work or even open up new revenue streams, such as offering simple services like management accounts, which you could not deliver in the past.

5. Happier in-house employees

Employees are the happiest when they have sufficient room to grow as individuals. In accountancy practices, however, overwork and a barrage of tedious accounting functions, such as bookkeeping and payroll, often limit such growth.

When you outsource, a good fraction of the burden is taken off the in-house staff. This means you have the space to put in more effort and innovation, learn new skills that will help you grow and take some much-needed time off.

The more employees are facilitated to grow, the more committed they will be to helping your practice grow too, which is excellent news for you when you seek to rise above the competition.

How to start outsourcing clients’ accounts

Of course, outsourcing your clients’ accounting functions requires a plan of action, like anything else, so that you are actually freeing up your time and benefitting from results superior to what you could achieve on your own and not chasing them when deadlines are near or worrying about data security. Here is how to make that work:

1. Examine your current workflow and challenges

Your practice cannot grow unless you have your workflow in order. Adding more clients or team members to a broken system does not fix the system! In fact, it only dries up the profits, increases stress, and stagnates growth.

When you sit down and look closely at what your team is doing on the job, you will be surprised to find how much of it is unnecessary business. The next step is to determine how many of those tasks can be outsourced and find a competent outsourced accounting services provider to work with.

It is crucial to define and delineate the responsibilities of your in-house staff and the outsourced team once you have identified tasks which can be outsourced.

The idea is to put the right people in place to keep processes running smoothly and ensure clients stay happy. A futuristic practice no longer banks on just churning out tax returns and piling on billable hours – such businesses struggle. Instead, your focus must be on bringing more value to the table for your clients. Accounting outsourcing helps you with precisely that.

2. Think of ways to streamline in-house

In addition to outsourcing your clients’ accounting functions, there are several ways to improve your practice operations. For instance, are you using tools like Microsoft Teams to collaborate and share updates? Do you have accounting practice management software that keeps track of your client projects and lets you see what needs to be done at a glance?

How many of your clients are still not using cloud-based accounting? There are many ways to automate every business function, even for those unfamiliar with technology. You need to do the research and find a good fit.

3. Review outsourcing businesses to identify a good fit for your business

If you think having an accounting outsourcing partner by your side can help you reduce the workload that comes with managing time-consuming and labour-intensive client functions such as bookkeeping and payroll and make time for your staff spend more time building client relationships and providing high-end advisory support, then find a suitable third-party outsourced accounting services provider.

Find someone who has experience in handling clients similar to yours. Where are they based? What do their IT infrastructure and data security procedures look like? Can you get hold of a few client testimonials or references? How cost-effective are they?

What is their working style? There are so many parameters on which you can identify an outsourcer. Choosing the right accounting outsourcing partner and moving forward to build a long-term relationship is vital.

4. Consider doubling down on an expertise area

Once you have identified an accounting outsourcing company that frees up a lot of your staff’s time, it could be worthwhile to pick an accounting niche and go all in on it. Having a niche allows you to distinguish yourself in a specific area, target your clients with more precise marketing and enjoy the economies of scale from performing tasks you are extremely good at.

And it is okay if you do not know which niche to pick straightaway. Experiment with a few and assess which ones your practice offers the most value.

5. Attract the in-house talent you do need

Everything cannot be outsourced, and you will want to invest in top-notch accountants with the skills and background to help you grow. This requires you to create a work environment that will appeal to these top candidates.

Offer outstanding salaries, remote/flexible working options and tailored career development plans so that you can attract the best people from anywhere. While accounting often involves long hours, allowing your staff to put in those hours at home could hugely improve their job satisfaction, so find ways to make remote collaboration work for you.

Over to you

In conclusion, building an efficient and future-proof accounting practice requires you to devote time to envision where you want to be. From choosing a niche to streamlining your operations to offering more tailored services, it all requires thought and planning, so start now.

Outsourcing can help you concentrate more on these growth plans by taking many routine/non-core client tasks off your shoulders. Do your research and invest in an accounting outsourcing team today – you will reap the benefits sooner than you think. The future of accounting is outsourcing. Ask Stellaripe!

How to meet and manage Self Assessment deadlines

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Taking up Self Assessment tax filing projects can be stressful for accountants. Individual business owners or those earning non-salary income can often have messy records and disorganised processes that can be difficult to work through, especially as the deadline approaches.

You can make things so much easier for yourself and your practice if you have a system in place. Here is a handy blog to help you build that system for your accounting practice and stay sane and productive during the upcoming tax season:

1. Create a digital system for your practice

If you do not already have a digital accounting system in place, you need one now. It would help if you also pushed your clients to use one.

Modern accounting systems like 1tap receipts that support automatic data extraction and bookkeeping can easily capture transaction data right at the source, either through bank statements or by drawing information from paper receipts, thus saving you and your team much of the hassle of last-minute data chasing.

This is very useful when processing tax returns for self-employed businesses or sole traders. The system also spots errors automatically, thus allowing you to clarify things with the client promptly and store all data safely on the cloud for verification at any time.

2. Add a reasonable cushion to deal with more challenging clients

Every accountant has dealt with a few clients who persistently submit details late. These are the ones you want to start following up with some months before the deadline so you can agree on a date for data submission. If you have not started now; start now!

Analyse the complexity of the work, and estimate a reasonable amount of time needed to complete it. To drive your point home, explain the consequences (such as hefty HMRC penalties) if they do not. Some of your recalcitrant clients might need this extra shaking before they step up.

3. Set a follow-up schedule for more difficult clients

Even if you do not have extra-tricky clients, delays are bound to happen, and that is because clients might genuinely miss your emails or need to remember deadlines for sharing documents with you when caught up with other things. A simple reminder can go a long way in helping you meet your deadline.

That is why you need a system of follow-up emails reminding your clients about upcoming dates. And do not worry about being pushy. Once their tax returns are submitted on time and they are saved from the wrath of HMRC, your clients will thank you.

4. Use a tax return questionnaire to complete each client’s work in one go

Take up each client’s returns only after they send you all the necessary information. Once you have that in place, block off time to complete those returns and commit to that timeframe. Sending a tax return questionnaire helps immensely in this scenario.

Ideally, it should include exhaustive questions requesting details on P60s, P45s where relevant, share certificates, dividend vouchers, interest income certificates/statements, mortgage interest statements, P11Ds, EIS/SEIS certificates, pension, property purchase and sale, foreign income, and so on.

Having a questionnaire is much more efficient than if you were to do bits and pieces of multiple clients’ returns every day. So please list clients in order of how difficult they are or their scope of work and work your way through it.

5. Get tax return information elsewhere

Despite your best efforts to collect all data beforehand, there will always be last-minute omissions to worry about. An excellent way to bypass this is to use public APIs to directly access client data from HMRC, including PAYE information, state benefits, marriage allowance claims and so on.

6. Schedule for other tax projects too

Self Assessment tax filing takes up most of the bandwidth in the winter, but you must remember your corporate clients too. Depending on their year-end filing deadlines, you may need to plan to free yourself so you can spend more time on Self Assessment work.

Try to shift any non-urgent client work to late January or February after the tax season. It goes without saying that you need to communicate with your corporate clients and let them know what you are planning. Keeping them in the loop should help them start collecting their documents for you faster.

7. Work with an accountable outsourcing partner

Meeting a deadline is much easier when someone is holding you to it. Take the help of an accounting outsourcing specialist like Stellaripe and minimise your tax season workload. This is an excellent arrangement when you have your plate full and want to ensure you can meet the Self Assessment tax filing deadline hassle-free without stretching yourself!

Plus, if you outsource now, you’ll have better control over your clients’ accounts and will not have to chase them for anything last-minute. Outsourcing is also cost-effective.

Dates to keep in mind

Now that you know how to get started with Self Assessment tax return preparation for your clients, here is a timeline of the relevant dates for Self Assessment tax filing:

  • October 5 – last date for registering your clients with HMRC for Self Assessment (for business owners, this needs to be done in the second tax year since their business began)
  • October 31 – last date for submission of paper tax returns. Individuals need to request a paper return, and HMRC will do this for people who have been identified as unable to file online.
  • December 30 – last date for online return submission for those clients who (i) have tax liability under £3000, (ii) already pay tax through PAYE, and (iii) wish to pay taxes on extra wages, pension or other such sources of income.
  • January 31 – the date by which you need to finish filing taxes and pay all your client dues

Penalties if your clients miss tax deadlines

As you know, the HMRC is quite strict about tax deadlines. Unless your clients have a reasonable excuse and have notified the taxman of the same, missing deadlines could mean hefty fines. Here are the penalties your client can expect:

  • For missing the deadline by even a day – an immediate fine of £100
  • A three-month delay – £10 per day for up to 90 days
  • A six-month delay – an additional fee of £300 or 5% of the tax owed, whichever is higher
  • A twelve-month delay – all the previously mentioned penalties, plus an extra £300 or 5% of the tax owed, whichever is higher
  • In certain exceptional cases – up to 100% of the tax owed

If your client has one of the following mitigating circumstances, though, you can submit an appeal against the tax penalty:

  • Unexpected postal delays
  • Unexpected, significant illness
  • Problems with the HMRC portal itself
  • Catastrophic events like floods or earthquakes
  • Software or computer failure when filing tax returns
  • Unexpected hospitalisation just prior to the deadline
  • Death of a close family member just before the deadline

Over to you

In conclusion, prior preparation and open communication make the Self Assessment tax filing season less stressful for everyone.

As an accountant, you can make things easier by relying on accounting software and automation for routine tasks so that you are free to focus on trickier tax dilemmas and offer tailored advice to each client on how they can minimise their tax burden.

To alleviate your tax season burden, take help from our expert tax preparers. Let us do all the hard work for you while you focus on building relationships with clients and growing your practice.