Making Tax Digital (MTD) will shift tax returns needing to be completed quarterly. You’ll now have more regular touch points with your clients as well as a range of benefits for their business.
Here we’ll cover those benefits and 4 ways you can show them to your clients.
What are the MTD benefits for your clients?
MTD presents a great opportunity for you to speak with your clients about how using technology will streamline processes and ultimately save them time.
Many may see quarterly submissions as an additional burden but by using technology, the time spent pulling the numbers together will reduce.
This will also provide you with a steady stream of paperwork which you can work on each quarter, giving your clients more time to work on their business, and much less stress.
Better cash flow forecasting
With those quarterly insights into your clients finances, you’ll be able to show them a more accurate picture of their potential future tax liability. This then gives them time to plan and budget their cash flow across the year.
Having this information is vital to give your clients earlier insights for long-term planning. You’d be hard pressed to find a client who wouldn’t appreciate the help you can give them with that.
Avoiding unexpected tax bills
As you’ll be aware, in its current state, your clients will drop all their paperwork off relating to the previous tax year and then will have till January pay their tax liabilities. If this is left late, your clients can be hit with tax bills which they’re not prepared for.
Having quarterly tax returns under MTD means your clients won’t be hit with potentially unexpected tax bills that they have to pay by the due date to prevent any penalties or interest being incurred. Instead, they can plan for this by putting a set amount of money aside per month, ultimately helping with overall cash flow management.
Access to information
Using software such as Dext Prepare dramatically reduces the likelihood of missing paperwork and stores all documents in a digital format which can be downloaded as required – giving instant access to historic information.
Should your clients face a tax enquiry, all of the paperwork needed will be readily available for a swift solution. On top of that, there are no storage costs for either of you to pay and no additional space is needed.
How to show your clients the benefits of MTD
1. Raise awareness in your firm
To get the buy-in of your clients, you’re going to need everyone in your firm to be bought in too. This means having a plan which they can follow so internally, everyone understands MTD and can handle any objections which clients might have.
Show team members the advantages that MTD can bring to both their working lives and the overall success of the firm. A big positive will be steadier workflows which help to reduce stress.
2. Give clients a heads up
MTD is coming, whether we like it or not. It will be enshrined into government law and all businesses will need to follow the rules. Don’t leave it until the last minute to educate your clients on what this means for them. You definitely don’t want a competitor ringing your clients to talk about their MTD solutions before you do.
If you’re still in the early stages of planning how your firm will deal with MTD, be honest about that. Getting in touch with your clients now to tell them MTD is on your radar and you’re looking for solutions is much better than leaving them completely in the dark.
3. Make them aware of your plans
Of course, if you do have plans set for how your firm will deal with MTD, make all of your clients aware as soon as possible. You want them to know that you’ll take the burden of pain away from them and feel that you’ve got it all in hand.
Show them the new software you plan to use and how this will affect them. Ideally, you’ll find a solution which works seamlessly with both of your current setups so adoption is key. Choose data collection software which works around your clients’ workflows, allowing them to snap receipts on the go and submit invoices without having to think about it. That way you’ll have everything you need when it comes to filing their quarterly returns.
Raising the awareness of your plans should be done on as many channels as possible. This way you’ll give current and prospective clients full visibility of your MTD strategy. Have team members pick up the phone, put it in your client newsletters, email prospects about your plans and put it on your social media. The more you can get the message out, the better.
4. Have the answers ready
Your clients will no doubt have questions about what MTD means for them. Make sure you have the answers ready. This could be from how you plan to charge for the increased number of tax returns or what your firm’s plans are.
If, for example, your prices are increasing to offset the more regular tax return work, you might well face objections from clients. This is where you should role play with your team members. Arm them with the answers they need to be able to show clients the benefits of MTD rather than focussing on the negatives.
Remember, the more positives you can show – such as the ones outlined above – the easier it will be to show the value of your firm’s services.
How to help clients get the benefits of MTD
The more you can show your clients how proactive you’re being with MTD, the more they’ll see the benefits of working with your firm.
To help you get ahead with your planning, we’ve put together a guide covering the three key steps you need to follow to prepare your firm for MTD.
Read it here.