Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

What the global digitisation story can teach us about STP

Promoted by Xero

As tax authorities around the world enforce a shift to digital, experience shows that the challenge for advisors lies largely in communication. 

Sponsored Features Xero 02 March 2020
— 3 minute read

We’re living in a time of unprecedented social, economic and technological transformation. Across the globe, government tax authorities are introducing legislation that replaces pens, Post-It Notes and stacks of paper with sophisticated digital processes. Here in Australia, Single Touch Payroll (STP) has heralded the end of payment summaries (RIP) and kickstarted a mass migration to accounting software. 

Advertisement
Advertisement

For accountants and bookkeepers, mastering change is nothing new – at this point, it might as well be part of the job description. However, with the advent of STP and its global counterparts, you’re not only faced with guiding clients through a considerable shift in process; but also a major shift in attitude. This, arguably, is where the true challenge lies.

 

Charting the waves of digital migration 

It only takes a brief look at the interaction between tax and tech to understand that change is inherent to modern business. Most Commonwealth countries developed tax authorities during the First World War. Next, with the advent of the Swinging Sixties came the computer age, where mainframes were used to speed up the processing of tax information sent to the authorities via forms. By the late 90s, small businesses and their advisors had discovered software, using it to prepare and package those same forms and send them into the mainframe. 

Then, came the cloud revolution. In this brave new age, mainframes are plugged into APIs designed to receive electronic forms faster than ever before. And as APIs continue to power more and more interactions between businesses, customers and suppliers, the momentum shows no signs of slowing. As an industry, hundreds of millions of dollars have been invested into moving accounting to the cloud. Naturally, governments have been paying attention.

Following in a widespread global movement, STP is by no means the first (or the last) of its kind. Whether it’s Payday Filing in New Zealand, Making Tax Digital (MTD) for VAT in the UK or the global adoption of e-invoicing – one thing remains clear, the future is digital. In line with new legislation, governments around the world are sharing the same message: moving online makes things easier, faster, simpler and cheaper for everyone. 

 

Learning and leading from global experience

As a Product Manager for Xero Business, Tim Wright was at the front line when MTD for VAT was introduced in the UK. “The team at Xero saw MTD as an opportunity for growth and improvement,” he says. “The UK has had legislation decreeing ‘thou shalt lodge digitally’ (or words to that effect) for years. More recently, VAT registered businesses above a certain threshold were required to also keep their records digitally and submit returns using MTD-compatible software. So we needed to create that capability within our software.”

Like STP, the focus for MTD is on real-time reporting, decreasing human error and boosting efficiency, transparency and security. And, again, like STP, the solution lies in creating streamlined, up to date, enabled software. In Tim’s words, “It was the perfect incentive for us to review our systems, products and overall experience. Xero has a duty of care to our customers, which is why we strove to create a solution that would make the entire process as streamlined (and secure) as possible.”

“This same duty of care is why we’re deeply engaged with government and professional bodies in each of the territories we operate in. All of which means constant product testing and working directly with both tax authorities and accountants and bookkeepers.”

 

Mastering the communications around compliance

As humans, we don’t tend to rush towards change. “MTD or STP – whatever the acronym and whatever the country – when it comes to encouraging clients to adopt a new way of working, what accountants and bookkeepers are ultimately faced with is (for many) encouraging an entirely new way of thinking”, says Tim. 

All of which illustrates the fact that legislation of this nature is as much a communications issue as it is a compliance one. 

“Efficiency can be a difficult message to sell because it requires that initial output of effort from the client. That’s why at Xero we do our best to educate advisors on the implications of legislative change anywhere in the world. Then, we work with them to help bring their clients on board.”

Here in Australia, with roughly 150,000 small businesses made up of 1-19 people still yet to comply with STP, the communications journey is far from over. Which is why it pays to draw from experience. Having supported countless advisors through similar transitions across the globe, Xero’s arsenal of STP resources – from talking points to project plans – is here to provide you with everything you need to ensure that your clients aren’t just compliant; but confident about what the latest changes mean for their business. 

Because while technology may facilitate the work that you do, nothing is more important than people connecting with people.

What the global digitisation story can teach us about STP
image intro
accountantsdaily logo
Sponsored Features
FROM THE WEB