About the barefoot accountant
The barefoot accountant provides accountancy services to creative sole traders who just want to be fabulously creative and not worry about the boring stuff. Operating from a shop front in Hertfordshire, the firm delivers personalised tax and accountancy services in a relaxed and judgement-free zone.
Challenge: Getting the right information, at the right time, from creative clients
Accounting-for-creatives firm the barefoot accountant has a reputation for being wired to the specific needs of creative businesses and sole traders, helping to take the hassle and headache out of their finances.
“Many of our sole trader clients find record keeping a chore,” says Ele Stevens, owner of the barefoot accountant.
“They are focussed on their art and often work unsociable hours, so understandably, extracting information can be tricky at times”. There can be challenges making it hard to navigate the lumps and bumps in the tax regime. “Imagine a client who hits the VAT threshold part way through the year,” Ele explains.”
“If we don’t get that information until, say, 8 months after the year end, we have to back track. There’s potentially a year-and-a-half of VAT that our clients can’t possibly claim back from their own clients, and late submissions are a really big deal.”
Solution: de-stress the information-sharing process with Coconut, giving everyone access to the documents they need, when they need them.
Since keeping records is one of the great pains of business ownership for creatives, the firm needed a solution that made it as easy as possible. “If something’s easy for clients to use, they’re more likely to use it,” explains Ele.
“That’s why we love Coconut. Clients can photograph receipts into the app while they’re waiting for a train or waiting for someone to join them for coffee. It’s breaking down the barriers and enabling clients to share the information we need.”
After trialling the app and getting some positive feedback, the barefoot accountant rolled Coconut out to all their clients in March 2021. Understandably, there was some hesitancy among their client base.
“Some clients were really happy to use Coconut, some were completely overwhelmed, and the rest were somewhere in the middle,” Ele says. “But even for the clients who were panicking, it was actually really easy to pitch Coconut to them and get them setup.”
This is because Coconut sets the practice and their clients up for Making Tax Digital, which comes into force in April 2024. MTD will make it compulsory for most businesses, sole traders and the self-employed to report their income and allowance expenses digitally to HMRC four times a year, with the eventual aim of going completely paperless.
“As a firm, we’re really conscious that Making Tax Digital is going to be time consuming, but we don’t want to increase our fees for that,” Ele says. “So we say to our clients, look, we found this brilliant app, we think you’ll really love it. And we’re going to include it in our fees to you so you’re not paying anything more to be compliant with Making Tax Digital. It’s all upside.”
“Obviously, some clients don’t like to change what they are doing. But once they’re on board with Coconut, people have been really pleased. That boosts their confidence in us, too.”
“We can’t possibly operate as an accounting practice with people bringing in receipts if we’re having to do four returns a year: it’s just not going to work. We needed something real time, And Coconut delivers.”
Results: real-time information sharing saves time, boosts service quality, and opens up the path to significant revenue growth
the barefoot accountant has yet to complete a full tax year with Coconut so they’re not able to put a £-value to the gains just yet. But from a service-quality perspective, Ele is delighted with the positive impact on the team and workflow.
Ele explains:
“It’s not valuable to the client for us to input receipts when there’s software available to do it. Our value is the advice, and putting everything together. That’s what we need to focus on, so we need reliable software to do all the other bits.”
“At this stage, we can confidently say that we’re able to plan better and we’re much smarter with our time,”
“Instead of dealing with paper receipts and plugging them in, we’re able to analyse data and give more advice to the client. Yes, we can get self-assessment returns done early so we’re not leaving things to the last minute. But we can also immediately see what’s going on. If a client has questions, if they are approaching the VAT threshold, if they aren’t limited companies yet for whatever reason, we can keep an eye on it as we have their figures all the time.”
“Rather than being reactive, we can deliver a much more proactive service with real time advice. That allows us to offer a proper managed service for sole traders, which we couldn’t do before because we couldn’t access the information.” For the client, these are impressive benefits, and for the team at the barefoot accountant, Coconut opens up the possibility of significant revenue growth.
“With all the time that Coconut saves, we can potentially take on more clients,” Ele says. “We know there won’t be a big rush in January, right before the tax deadline, so we can fit more people in throughout the year. The time saving aspect is key.”
TL;DR
Challenges
The barefoot accountant wanted to deliver a managed, proactive service to its sole trader creative clients, but was impeded by the lack of record keeping.
Solution
Roll out Coconut’s user-friendly bookkeeping and tax app to all sole trader clients, helping clients get organised and allowing the accounting team to access good-quality data whenever they needed it.
Results
- No more chasing for receipts, notes or bank transactions
- Greater focus on value-added services for clients, instead of chasing information
- Future-ready solution, enabling compliance with Making Tax Digital without hiking fees
- Time-saving and efficiency gains for the business, throwing the doors open to potential revenue growth
