Late filing is a huge problem, with tougher penalties on the way. Accountants’ jobs would be so much easier if clients just responded on time.

Millions of entrepreneurs miss the deadline for self-assessment filing with HMRC every year, and while the pandemic may once have been a legitimate excuse, it no longer carries weight.

While January is the big one, there’s also year-end accounts, capital gains, share incentives, and that’s not to mention the various individual deadlines each client will have for filing with Companies House.

Blowing deadlines is stressful enough, but the consequences of doing so carry harsh sanctions that are about to become even tougher next year.

From 1 January 2023, a new HMRC system for late VAT submissions will take effect, changing how and when penalties apply. Repeat late filers will be hit more extensively than those who flub the occasional deadline, and of course, like most things tax related, it’s complicated.

“The new penalty regime is more nuanced than before, in many ways, it is a fairer approach albeit not as simple as the previous regime,” says Jason Croke of Rayner Essex accountants. While there will be a “period of familiarisation” for the first year, meaning documents filed a few days late won’t land anyone in trouble providing there is a good excuse, that won’t last, Jason says.

“It’s unlikely to be a good idea to get into the habit of paying late, not least because when the ‘period of familiarisation’ ends, the business does not want to have formed a bad habit,” Jason adds.

Unfortunately, there are a lot of companies already stuck in their ways.

In a letter to HMRC last year, the ACCA industry body revealed in a survey of accountants representing 14,000 clients that 22.2% were expected to miss the January filing deadline, with ACCA estimating that 2.5m businesses could face penalties.

It’s worth exploring why the problem of missed deadlines happens, and how some firms are finding ways not just to file on time, but to improve client responsiveness to the extent they can take new work on.

Top 3 reasons why accountants miss so many deadlines (and what to do about it)

1. The client is too busy to respond in a timely manner

Ever heard of a business owner with too much time on their hands? Neither have we. Entrepreneurs are busy, and often the smaller the company, the less time they have to do, well, anything.

There have been occasions where in lieu of getting the desired information about the books in time, the accountant has taken matters into their own hands, which is risky and potentially lawbreaking if data is submitted without authorisation.

The most straightforward way to handle a client who is unresponsive is to change the way they are alerted. If they need a greater frequency of nudges or prompts, or to be spoon-fed the requirements, implement a system that makes it easier for them to comply.

2. Information arrives in dribs and drabs

Waiting until all the necessary data is received to file is proving fatal for many accountants hoping to file on time. When everything is last minute, the likelihood of missing data or mistakes creeping in spikes.

For dealing with procrastinators, some accountants have opened simple, inexpensive collaborative portals with workflows set up to ensure all the relevant information is sent, with specific dates and auto generated alerts.

Software that can automate reminders about missing information, with gentle reminders of the costs of not doing so, frees up the accountant to concentrate on other matters.

3. Doing the books is messy and some clients are scared of facing reality

Every accountant has horror stories about the state of some receipts and invoices they receive, but there is a client on the other end, and with the best will in the world, paperwork may not be their thing.

Forward-thinking practices have set up modern client portals that take the pain out of document sharing and collaboration. It costs almost nothing to create safe, cloud-based environments with workflows walking their clients through very simple information submission protocols.

From invoice and receipt capture to billing steps and other important matters, software-savvy accountants have worked out the best way to help clients help themselves is to give them the tools to do so.

Help your clients and make better use of everyone’s time

Clients have short memories and almost always want to prioritise their own business rather than dealing with paperwork. That makes getting a timely response is crucial to hitting deadlines. Changing the way you interact with your client may not be easy, but when the upsides are saving time and making the whole process simpler, the benefits of doing so should be viewed as a major opportunity.

And for the accountant, finding smarter ways to collaborate and communicate are key to making sure all the information needed to file is received on time, alleviating the threat of financial and other professional sanctions, and significantly reducing the stress of busy season.

Move your work forward faster

Stop chasing people for information, Glasscubes will do that for you. Discover how we can save you time and eliminate the tedious task of constantly emailing clients for outstanding information. We help accounting professionals work smarter, faster, and with less effort. Contact us today!