HomeGrowth & TechApps and Micro Clients

Apps and Micro Clients

If my time spent judging the Small Practice of the Year entries for Practice Excellence has taught me anything, it is that the Cloud has been embraced by small practices almost universally, and that has meant that they are able to service significantly more clients per staff member.

Whether Xero, Sage, QuickBooks, ClearBooks, FreeAgent or Prelude, accountants everywhere have made their choices based on numerous and varied criteria.

What is almost universal is that the client who is being placed on this software has a turnover at least at the level of the VAT threshold and one that will require a balance sheet.

Small income and expenditure clients such as sub-contractors, taxi drivers and the like have not in any great numbers been put onto these packages, mainly due to costs, and the fact that it is a ‘sledgehammer-to-crack-a-nut’ approach.

While the cost of these packages for small clients is a major factor, of equal importance is the fact that these systems are not designed for such small businesses that don’t predominately use a business bank account, are not VAT registered, and don’t actually have many transactions each month. They are most certainly not intuitive, and to a varying degree have to be taught – and this teaching time weighs large in accountants’ minds when they are making decisions to place clients on these systems.

So does that mean that micro businesses and the self-employed cannot automate their processes? Does that mean that micro businesses and the self-employed are restricted to paper-based records, or at best the use of ill-conceived spreadsheets, with the result being that many accountants struggle to make this work profitable. Is there another way?

HMRC were asked this question during their MTD deliberations. They knew full well – as we all do – that VAT registered businesses, or businesses with a reasonable turnover, were well catered for software-wise. But the micro and self-employed were the worry, because cost and training constraints held them back from the digital environment. HMRC’s research led them to the conclusion that for these taxpayers the answer was an App, whereby standard bookkeeping interfaces were abandoned in favour of intuitiveness –and if they could get providers to supply this free of charge, then job done.

Now, for the first time, accountants can see that a level of automation and ease of working can be applied to our smallest clients, and all that was required for accountants was that we would be able to offer these Apps to the clients that we wanted, giving us the same oversight we get for our larger clients from cloud-based applications.

I have spent many hours working with the design and technical team at MyFirmsApp to achieve a system that is simple and intuitive for my smallest clients and yet one that I can monitor, review, amend and – if HMRC ever make a decision – use to file their quarterly reports. Even if quarterly reporting never becomes the norm, I can see now how my January will definitely be easier for me and my staff.

As I write this article, the system is in beta test mode and is called MyFirmsApp Collect and, believe me, it is looking very good. Perhaps by the time you get to read this article it will have gone to the next level.

What it has shown me is that we can automate the work of the very smallest client at negligible financial and time costs. I believe the term ‘App’ will become as synonymous for micro business and taxpayers as ‘the cloud’ is for the rest of our clients. Some may say it’s a game changer, some may say it’s a major breakthrough. For me it means that I can take on more of the smallest clients that at present I’m shying away from.

  • Tony Margaritelli, Chair, ICPA

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