In the run-up to the first MTD deadline, we’re launching our Making Tax Beautiful series – a fortnightly look into the changing world of VAT from our Director of Product Strategy, Russell Gammon. This week, Russell takes a look at Tax software, and how Making Tax Digital presents the opportunity to modernise the whole VAT process.
“Tax doesn’t have to be taxing”. The one phrase that every Tax professional the UK over dreads more than most.
“Oh, you work in Tax, it doesn’t have to be taxing, you know”.
Now we’ve established it isn’t taxing, Tax is going Digital, with HMRC’s mandate around “Making Tax Digital” for VAT (more info on the specifics are here), and with it has bought another round of phraseology (hooray!).
MTD for VAT does represent a change in the VAT landscape, though it’s not the seismic shift that perhaps some people would like, and perhaps HMRC once envisioned. Still, it’s likely a sign of things to come, where the gathering of data digitally, more frequently and more correctly is a general trend shown by the authorities across Tax, Finance and Banking Regulation.
So, there is clearly a market for software to service this market. A few thoughts…
Most Tax software is ugly
I started my career almost exactly ten years ago and worked almost exclusively with Tax software for the majority of the first five years. I worked with some of the “known brands” in the industry, from 3rd-party tools through to in-house built tech.
One thing that was almost universally true about the software is that functionally, they were pretty good. Visually, however, they weren’t. That was largely fine though – the software was there to automate a process, reduce manual effort, and act as a control mechanism. It didn’t really matter that it didn’t look nice, or that it took 5 steps in a “Wizard” (remember those?) to do something; it worked and replaced a horrible Excel process, so it was a marked improvement.
On top of the visuals…
Most Tax software isn’t cool
I have a vivid memory from a few years back of a Senior Manager in a meeting describing a new piece of Finance software as “Facebook for accountants”. Stifled laughter; he couldn’t have been more wrong. Yes, it looked better than a WinForms app, was at least cloud-based, but still had far too many menus with too many options and took multiple days to train people to use.
I get that there are two main challenges that make it hard when it comes to Finance software. Firstly, it is naturally going to have to perform multiple functions to provide significant value over and above Excel, provide workflow, manage user rights and perform calculations. It will require training. “Facebook for accountants” isn’t ever going to be a thing.
Secondly, some of the requirements of complex organisations are exactly that – complex. Having a ten step master process, with three sub-processes, spanning many entities in multiple groups, with all steps having configurable user access – that’s tough to develop. But, how you expose that to users of the tool is key.
However, stepping away from Tax for a second, an important factor is that…
People use way more software now vs. ten years ago
One thing that’s happened over the ten years since I started in software is that people are exposed to software on a far more frequent basis. We’re all on our phones, ordering dinner on Deliveroo before getting an Uber home. We’re used to utilities helping us with everyday tasks.
What’s universally true of these successful apps is that they’re beautiful. Branded perfectly, with an army of UX designers making sure that not only are there as few steps as possible to do a task, but that the screen space is best used to minimise how far somebody’s thumb needs to move.
What this has meant is that consumers expect beautiful software throughout every part of their life. Accountants (yes, they’re consumers too) are becoming more demanding of the tools they use and increasingly the complaint to software firms is that the software they’re using in the workplace isn’t user-friendly. Functionality is always, obviously, important, but increasingly usability is too.
A quick nod to Xero
Xero is cool, and it is pretty. It’s also disrupted the SME accountancy world in a meaningful way. Xero’s genius is similar to Uber’s (et al), in that it performs simple tasks well at a very low price point, with zero (Xero?..) implementation friction. For a sole trader, shop owner or self-employed bricklayer, I have no idea why you would use anything other than Xero.
The software I’m generally concerned with in my role is a complexity level (or two) above Xero. But, why don’t we apply the same principles as Xero does; do what we do really well (the best) and make it as easy as a few mouse (/screen) clicks to complete tasks.
It’s therefore my view that…
Tax doesn’t have to be ugly
At Arkk, we’ve been fortunate enough to be able to design our MTD tool from scratch. We aren’t re-hashing something we’ve done before, which always makes it harder. We’re actually building a platform which is way broader than MTD, but more on that another time. For MTD we’ve been able to analyse the process and make it as simple as possible for the user. It does still require training, but that takes the form of interactive, intuitive, walk-through guides and knowledge-bases. We’re using a tool called Pendo (http://go.pendo.io/) to make that happen; we can focus on the content whilst they integrate with our app to make the whole experience as seamless as possible. Let’s move away from hours or days sat in a training room running through prescribed activities.
We’ve also gone to external design agencies to work on the UX. The result is something that looks, I would say, beautiful (hence the title of the article). We’re not “Facebook for accountants”, but we’re at least attempting to bridge the gap between software you’d use in your everyday life and software that you use in the workplace.
In a world first, a screenshot from our beta platform…
See, isn’t that actually quite nice looking?…
Tax can be beautiful
I’m not naïve enough to think that business tools can get away with just looking nice to sell well. That’s why me and my Product Team are in place to make sure that functionally it hits the right notes too. But it’s refreshing that the functionality hasn’t been the only focus of our development. I do think what we’re doing will surprise a few people. We’re making Tax beautiful. We’re also throwing Machine Learning into the mix, but some more on that another time…