How Davenports Accountancy streamlined their tax processes to better serve their clients

For accountancy firms, growth is extremely welcome but not without its challenges. A bigger team, with more clients and a greater number of responsibilities can see workloads escalate and processes become increasingly complex.

Davenports Accountancy, founded over 20 years ago by Scott Davenport with partner Jason Davenport, who heads up the separate marketing division, has enjoyed a period of rapid growth. 

In order to continue this growth, Scott and the team needed a software solution that was forward-looking and continuously evolving. Three years ago, they adopted Xero and migrated all of their clients across. 

We talk to Scott about how Xero, especially the Xero Tax feature, has helped the practice streamline workflows, reduce manual tasks and improve efficiency, enabling them to better serve their clients. 

Challenging times

First, Scott tells us about some of the challenges he faced prior to Xero, in particular struggling with the workload of completing clients’ personal tax returns: “I’d have to do it all myself because the system we were using wasn’t very intuitive. You’d really have to know where things were going and how to set things up in the software.”

The cost of adding extra users to their previous software was also a barrier to training up other staff members and spreading the load. And even when other team members did use the software, clunky processes and technical niggles often meant Scott was pulled away from other work to help. 

He adds, “You think you’ve got your day planned and then suddenly you have to spend an hour trying to work out why someone can’t get into the system.” 

The right solution

Xero Tax is built to streamline compliance by making it faster to prepare and file accurate accounts and tax returns for both companies and individual clients. 

As a practice chosen to test personal tax in Xero Tax, Scott didn’t waste any time finding out how it could help improve their processes. “We were straight in and setting up clients,” he says. “It’s been really straightforward.”

Because Xero Tax is available at no extra cost and intuitive to navigate, Scott was able to quickly get the rest of his team using it. 

“With Xero Tax I can give simpler tax returns to another member in my team, they can put it into Xero Tax and I can just review it,” he says. “That then frees up time for me to do more consulting and forecasting work with my clients, to better support them in moving forward.”

Scott explains that the solution is also helping educate other members of the team with regards to personal tax returns: “Xero Tax is enhancing the team’s knowledge of personal tax, offering a less time-consuming alternative to taking a formal course.”

Everything connected

With Xero Tax, data flows between your clients’ books and accounts through to their tax return, cutting back on time-sapping manual tasks as well as reducing errors. 

Scott explains, “I know when I correct something in Xero it will then match the accounts. Whereas before I might have changed it in one piece of software and forgotten to change it in the other. The more things that can link together, the less I or someone else has to rekey it, and the less chance of it being rekeyed wrong.”

Scott predicts filing clients’ personal tax returns will be a much quicker process from now on — helped by the fact that Xero Tax connects easily with other parts of Xero to create a seamless end-to-end experience. 

Using work management software to track time spent on tasks, Scott says, “I get the feeling we’re saving about 50 to 55% of our time using Xero Tax compared to the software we used before. I think anyone who tries it will see the benefit of Xero Tax.”

Getting ready for Making Tax Digital

With Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) on the horizon in 2024, Scott is looking to use both Xero Tax and Xero Go – a new mobile app to help ease the burden of financial admin for sole traders in the UK – to help with the transition for affected clients. 

“Using both Xero Go and Xero Tax will help us tremendously, allowing us to more efficiently prepare clients for the future of digital tax. I can only see our use of Xero growing.” 

As for Scott’s advice for other accountants? Start preparing sooner rather than later. “I think talking to clients now and bringing your team with you as you’re doing that will make life easier for you in the future.”

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Source: Xero Blog