The Practitioner: Costs climb, but speculating to accumulate
The Practitioner ramps up overheads in a bid to bring in more clients...but will any clients want their tax dealt with when Making Tax Digital comes into effect?
A LARGE CLIENT OF MINE has always told me to plan for the future and ‘create space’ for growth.
He has been with us since day one of his business, and in that time this has always been his ethos. To be fair, he has stuck to this belief, not just talking the talk.
I remember his first two or three years with us, where he was constantly spending more than the business could afford at the time, all made possible by a combination of credit card, bank loans, EFG funding and supplier payment deferrals.
It’s all worked out for the best, obviously, and even now with 420 staff he is still looking at creating space for future growth.
For me, I’m at the stage now where I’ve just committed the firm to planning for the next level. We’ve moved into larger premises and just recruited more staff.
If we stood still our new cost base would be unaffordable. If we didn’t invest in the growth we would have a problem keeping clients happy, and eventually they would get disgruntled and we would even lose the regular income they generate.
Two new staff start next week, and with all the setup costs they incur it’s going to be a tight Xmas period, cashflow wise. I’m confident we will get through it however, and then in the New Year push on and look for new fees to bring into the practice.
Digital tax ‘as painful’ as analogue tax
If the news headlines in the accountancy press are right, the new digital tax reporting would see firms like ours lose out on fees over the coming years.
I don’t see it as a big problem myself. For a number of years now online software has made it easy for clients to do their own books, and with integration with HMRC and Companies House, filing returns has never been so easy.
Thankfully for us, and lots of other accountants, clients would rather do what they do best and let us do the books for them. Creating space is for growth; not for doing your own taxes, digital or otherwise.
The Practitioner’s uncensored thoughts come from within their own practice – having left a regional firm in the heart of England
