Sage Blog

Over at our sister blog xbrl with Sage they’ve recently been celebrating iXBRL day!

To anyone outside of the world of accountancy “XBRL” is the tagging of financial data. Every bit of data on your financial statement is tagged so that computers can easily select, collate, analyse and exchange the data. Add an “i” onto your XBRL and you have “iXBRL” the human readable format of this financial data. Phew, easy.

So, what is so important about iXBRL and why do we need to know about it?

From the 1st April this year all companies filing their Corporation Tax Return with an accounting period ending on or after 31 March need to do so in an iXBRL format. This means that accountants can no longer file tax computations or final accounts using PDFs or documents such as Word or Excel.

At Sage we’ve been working overtime making sure everything is in place. For accountants it means new ways of doing things; thankfully our software takes care of most of the challenges for them.

Jayne Archbold our Accountants’ Division MD cuts through some of the rumor and speculation around iXBRL and sets out the facts and figures of Sage iXBRL software, showing exactly what is involved in making sure the we have the right accountancy software and support in place to ensure things go smoothly.

We knew it was going to be bad.

But as the first official breakdown into what the Government owes is published, the UK’s debt crisis appears to be much worse than anyone thought.

Steve Porter, Sage Accountants Division

New figures confirm that Britain is now in the red to the tune of £4 trillion – a hefty £65,000 per person. And experts say that as analysts continue to pore over the country’s post-election finances, the figure could rise even further.

So how does it all add up? And where do we go from here?

According to research from the Office of National Statistics (ONS), the amount owed is double that previously predicted by analysts – including the Centre for Economics and Business Research.

ONS experts say our borrowing is now so huge it would take each of the UK’s 62 million residents five years to pay off their share.

Their report, published last month, attempts to present a comprehensive review of our debt by adopting an approach pioneered by former Prime Minister, Margaret Thatcher.

Thatcher advised assessing spending and debt in the same way that households calculate what they can and can’t afford.

Round up of our financial health

The ONS says their survey represents the first realistic round up of our financial health since the election and looks at amounts spent on public sector and state pensions, bank bailouts and costs incurred by Labour’s Private Finance Initiative.

The figures are truly mind-boggling. The report calculates there is now a net public sector debt of £1.08 trillion but values state assets – including the worth of every school, hospital, office, council house, railway, ship, aircraft, vehicles and land – at £1.4 trillion.

Analysts added the large amounts spent on pensions – there is some dispute about these but the ONS estimates the public sector pot is £1.2 trillion and the state pot £1.35 trillion – to the additional costs taxpayers must cover, including £40billion for decommissioning old nuclear power stations and £500billion for contingencies.

Another £1trillion to £1.5trillion was spent on banking bailouts and take-overs, setting the total debt at around £4 trillion.

More bad news to come?

ONS chief economist Joe Grice said that the estimates were ‘important steps to help assessment of the public finances and their sustainability.’ But others have warned that there could be more bad news to come.

Mike Denham from the TaxPayers’ Alliance warned that the amount could double as the true cost of helping the banks is revealed and our pensionable population increases.

As he says: “Once you take account of the full extent of state pension liabilities and other costs associated with an ageing population it may be that the real liability could be double even these figures.”

For now, the Treasury’s response has been to establish an Office for Budget Responsibility and a Public Service Pension Commission to look into spending and sustainability respectively – amid fears about cuts and freezes.

Managing public finances

But professional bodies like the Institute of Chartered Accountants in England and Wales (ICAEW) say more wide-scale action is needed to address the problem and are calling for an overhaul of the way public finances are managed.

Chief executive, Michael Izza, explains: “While there are important debates to be had about specific spending cuts, I believe that meaningful reform is necessary to underpin sustainable public finances over the long term and create a culture of fiscal responsibility.”

As he says, there is still a lot of number crunching to be done but finding meaningful, permanent solutions to our debt problem is a challenge we all face.

Thinking business

At Sage our aim is to do our bit in terms of helping sustain a slow but steady recovery. We pride ourselves on our mantra of ‘thinking business’, and this includes an understanding of how important is to keep a track of the financial health of your company. We know the value of financial control and visibility, and this is something that we try and weave into everything we do – whether as part of our software solutions or the advice we offer via our wide-reaching support network.

Business advice and Accountants

Coming specifically from Sage Accountants’ Division, we’re also aware of the key role that accountants can play here – in terms of providing the right software and support to businesses. After all, in our last Pulse survey we saw that small and medium-sized companies now see accountants as their first port of call for business advice.

We’re all in it together, and the time and cost savings that we can produce from our continued close relationships – understanding the needs of a business or practice and offering the most efficient solutions or guidance – mean that we can all play our own part in edging towards economic recovery.

Steve Porter, Sage Accountants’ Division

I had a great day at Sage Connect, the Sage UK and Irelands Accountants Division event at the British Museum this week: buzz, interaction, vision and inspiration.

Now, I’m not grading my own paper here. Yes, as  Head of  Marketing for the Accountants Division, it’s my budget and my team’s responsibility – but that’s precisely the point. The team headed by Lisa Benner did an incredible job and enabled me to focus on the key aspects of the day: customer and partner learnings, Sage’s Cloud vision for accountants, iXBRL and compliance – and real humour from speakers Nick Hewer and Spencer Kelly.

Sage and Blackberry

Main sponsor RIM delighted accountants and our teams with the extent of business tasks you can get done on the BlackBerry – many were unaware that you could do your time and billing on the device, link to Sage 200 and Sage CRM Solutions as Taylorcocks Accountants described in a recent case study

Nick Goode, Sage Accountants Division

. Accountants always tell us: we are a time-bound profession and any savings on task execution means more billing time and faster resolution for customers. We enjoyed a dinner in London with the RIM team and there is real appetite for more mobile solutions for our accountant customers.

iXBRL

Doing new cool stuff on the Blackberry is always enticing – as is, for our customers and for us, tax, compliance and of course iXBRL. Julian Hatt from HMRC did a tremendous job of answering many questions about compliance, setting our customers minds at rest. For example, HMRC are adopting a “soft landing” approach where iXBRL filings will be treated leniently in the first two years after mandatory online filing in April next year. He also confirmed to the audience that expert systems such as the Sage Accounts Production product range are needed, that while HMRC does have an online tool it is only for “occasional use” for clubs, as an example. I picked up a question on the Q&A Panel regarding word tagging – that accounts prepared in Word and Excel will have to be tagged and that we will provide a product for this along with the XBRL enablement of our tax and accounts production software. Your views on outsourced tagging are welcome. With Companies House representatives also present throughout the day (a big thank you again), customers were able to get the information they need live and direct.

Future directions?

I also had the pleasure of welcoming Gina Dyer of AccountingWeb to one of my breakout sessions on Cloud computing and online solutions for Sage Accountants Division.

Through interaction with customers and partners during the sessions, I was able to draw pictures of customer needs: online collaboration between accountants and their customers; mobile access for onsite accounts review and editing; cool ideas like e-invoicing; the real demand for online payments leveraging the fast-growing Sage Pay solution; and most of all, the confirmation from our customers and partners that an “all cloud” position would be wrong; that our vast customer base means one size does not fit all and that our rollout of products and services online over the coming months and years is the right approach.

Sincere thanks to all who contributed to the debates – our only regret was lack of time!

Celebrating Success

Jayne Archbold, the Managing Director of the Accountants  Division, awarded 12  of our customers and partners for innovation, business growth, customer service, beta involvement and more. As each winner took to the stage, a different “money” themed tune blasted out (Pink Floyd, Simply Red, The Beatles and the Flying Lizards – remember them?) – I think it worked, good fun and sincere thanks and congratulations to all our winners.

I loved the way that Gina was able to get a video of Nick Hewer from the apprentice during the drinks reception. Nick had given us the inside view on The Apprentice. I completely agreed with him that the worst ever task execution was the army guy who tried to sell Macro cheddar to the French and cook sausages over a baked bean tin… And thanks Nick for your comments about how Sage grew from a tiny start-up in 1981 to the global giant we are today.

Past, present and future: the iconic British  museum with its Egyptian obelisks at the head of the stairs leading down to the event, where we entered the very real business of accountants, representing every type of British business at work today and every day; and with us now and into the future, the new worlds of online filing, payments, collaboration and services for accountants.

Of the tweets (#SageConnect) and emails on the event, the comment I liked most is that our desire to understand exactly what accountant customers need is palpable. At our core at Sage is Extraordinary Customer Experience, in using Sage products to run your business and in the services we provide.  Feedback, as ever, welcome.

Nick Goode, Head of Commercial Marketing, Sage Accountants Division

Here at Sage we’re busy organising a special event for our Sage accountants on the 21 July. If you’ve not come across a Sage accountant before, you’re probably wondering what they are.

What are Sage accountants?

Well, Sage accountants aim to deliver the best possible service to their customers when it comes to Sage software and services. So, if you’re looking for an accountant it’s a great place to start.

It’s a really important relationship to us, so not only do they get training, specialist software and dedicated support from us, this year we are inviting them along to an exclusive event, Sage Connect 2010.

Sage Connect 2010 event

Sage Connect 2010 gives our accountants a chance to stay ahead of their peers with the latest information from industry leaders, as well as inside information about us, and what lies ahead.

If you’re one of our accountants, you should have received your invite by now, and hopefully you’ve already got it in your diary. And here are the  keynote speeches you’ll get to see:

• Julian Hatt from the HMRC who’ll be talking about the Corporation Tax and iXBRL aspects of Lord Carter of Coles’ 2006 Report: Review of HMRC Online Services, as well as HMRC’s approach towards transitional measures and extraneous developments that are impacting on the implementation of iXBRL
• Spencer Kelly from BBC’s “Click” will be giving an insight into business technology and emerging trends
• Michelle Sansome of the Accounting Standards Board will provide an overview of plans and timelines for International Financial Report Standards for SMEs and Microentities
• Jack Mansfield from Companies House will speak about eFiling plans and future developments

Help shape the way we develop our software and services

Have you got ideas or opinions regarding our software? Then, you’ll have a chance to pose your questions to the Sage team, including Jayne Archbold (Managing Director of Sage Accountants’ Division), and Heads of Research and Development for some of your key Sage software. You’ll also find out how to become a BETA customer and help with shaping Sage software, and as a taster get the first glimpse of the features in Sage Practice Solution.

Workshops

There’s a wealth of workshops available to you, with something for everyone. Personally I’m looking forward to ‘Cloud Computing? What, Why and How?’

Celebrating success

We’re particularly excited to introduce our Sage Accountants’ Awards 2010, which will be co-hosted by Nick Hewer from BBC’s The Apprentice.

This is a chance to celebrate and recognise the achievements of accountants in practice, and the contribution they make to UK businesses. With our Pulse survey showing that 60% of small businesses want sound business advice and consultancy from their accountants, it certainly seems like the right time to celebrate the contribution made by Sage accountants to British business.

If you’ve been entered we wish you the best of luck.

Come and join us

One of the most productive aspects of conferences is networking, and we’ll be hosting a drinks reception in the evening. You’ll have a chance to have a more informal chat with other attendees and the Sage team, so we’re looking forward to seeing you there!

If you’d like to join us, please send an email to sageconnect2010@sage.com

Daniel Duran, Sage Accountants’ Division

It’s been a tough few years for the accountancy industry. And the toll taken by the recession has had very direct consequences for us all.

In an effort to cope with the economic downturn, we all know that many firms have had to freeze or even cut salaries, with some asking staff to accept reduced working or conditions in a bid to increase efficiency and minimise redundancies.

Steve Porter, Sage Accountants' Division

But now, as tentative recovery begins, accountants are starting to ask when they’ll be rewarded for their loyalty – and those personnel who settled for less will soon be asking for more.

So will they be successful? And will firms face even more difficult decisions in the months to come as a result of previous cost cutting?

What will the effect of the recession have on current staff whose careers have halted during the downturn and how will the new raft of summer graduates find their way in this changing landscape? One thing is for sure, there is no shortage of young people wishing to join the profession.

Almost 10% of all UK university leavers currently pursue a career in accountancy in some shape or form. The vast majority of these still enter the ‘big four’ firms – KMPG, Ernst and Young, PriceWaterhouseCoopers and Deloitte & Touche.

Although there is a small decline – the number of qualified workers employed by the top 50 firms has fallen by about 3,000 or about 5% over the past year – this means there are still almost 57,000 accountants working in the UK.

Access to such a large talent pool has been part of the problem. Having such a large number of staff and graduates to choose from means that in recent years employers have been able to offer reduced salaries as people compete for jobs.

In turn, new joiners have found themselves having to lower their pay expectations, sacrificing financial gain in return for job security.

Those already in position when the recession began have seen salaries frozen or hours shortened. And the introduction of four-day working weeks and optional extended leave have also been seen across the sector, as part of a longer-term strategy to stave off redundancies. Other smaller firms have laid off management staff and replaced them with less experienced, cheaper graduate recruits.

While this type of cost cutting might work well in the short-term, industry experts warn it could prove costly in the long run.

Although it could be argued that having such a large pool of talent to choose from means it is possible to secure strong candidates at reasonable rates, the departure rate of staff in such an environment is likely to be high.

If firms continue to offer non-competitive salaries even when the economic climate begins to improve, personnel will move on – wasting money and time spent on training and career guidance.

With this in mind, firms are urged to resist cutting training in a push to reduce costs.  Some argue that companies who don’t train their staff are far more likely to have problems later on – that those who invest in developing the talents of their employees are much better placed to weather tough times.

In some of the larger companies employers are offering accountancy professionals salaries that will not entice people to move, and those people who do move are more likely to do so with reluctance or because they feel they have no choice.

In order for employers to find and retain the most talented candidates on the market, there needs to be some change in the way they attract talent. Going on the understanding that people will be happy just to have a job isn’t feasible for the future, and there must be more forward thinking in the market.

As soon as there is evidence of an upturn, there will be huge unrest in the market if employees do not feel suitably engaged with employers or feel that they are not gaining enough recognition for their work. And unless comprehensive succession plans are in place, companies may not be prepared for a loss of skills and people when the market moves on.

So as the economic climate continues to change, how we attract, retain and reward staff looks set to be a talking point for some time to come.

Steve Porter, Sage Accountants’ Division

We all know how crucial credit can be. Yet in these uncertain economic times, guaranteeing access to lending is becoming more difficult than ever.

Despite being recognised as a vital survival tool for small and medium-sized businesses – and a necessary strategy for the UK’s long-term recovery – many are still struggling to secure the credit they need.

Steve Porter, Sage Accountants' Division

A more cautionary approach to approving funds has been seen across the board with suppliers, trade credit insurers, building societies and banks failing to meet their lending targets this year – all showing a reluctance to extend terms.

A mistrust of traditional business data as a way of measuring risk is recognised as one of the biggest barriers to securing credit and many banks and suppliers are demanding more up-to-date and monthly management accounts as part of any application.

One of our recent Sage Omnibus surveys found that half of accountants polled said they were now being asked to help prepare quarterly or monthly accounts, while another 53 per cent revealed clients were struggling to access credit.

Here at Sage we have been engaging with numerous industry bodies such as the Confederation of British Industry (CBI) – as well as other trade credit insurers and interested parties – to understand the impact on the market and explore ways that we could potentially assist both you and your clients.

Help is at hand

What can SMEs do to help themselves? If they are to secure continued lending, they must be pro-active about their credit profile – looking at ways to offer more real-time accounts and to improve their financial standing.

Accountants’ role is key, and there are credit and analysis tools at hand to help identify new ways to help businesses stay ahead – such as CreditPal (provided by Future Route).

These secure, internet-based facilities help users maintain detailed financial accounts and manage lending needs. For example, CreditPal complements Sage software – such as Sage 50 Accounts and Sage 200 – requiring no extra download or installation, and allows users to review internal finance and automatically generate standardised and validated monthly management accounts.

Accountants can offer such credit and analysis tools as a value-added service, generating data on a client’s behalf, or acting as an advisor to help SMEs access and set up the service in-house.

However these links are made, accountants are able to play an invaluable part in maintaining the steady credit flow all businesses need.

Steve Porter, Marketing Campaign Manager, Sage Accountants’ Division