New FRS regulations – what accountants need to be doing
As the regulations come into force, you’ll want to be as prepared as possible. While company directors are responsible for decisions relating to disclosure and policy, accountants will be expected […]
As the regulations come into force, you’ll want to be as prepared as possible. While company directors are responsible for decisions relating to disclosure and policy, accountants will be expected to provide sound advice.
Software is understandably a very important part of providing an accurate service, so making sure your company keeps up to date can be a huge help. One provider worth investigating (as an authority on the topic) is IRIS, who supported the original IFRS compliance for publicly listed companies in 2005 and now support accountants working with non-listed companies and smaller businesses in making the transition to FRS 101 and FRS 102.
The right software will help apply new FRS, but that isn’t the end of the story. Many companies moving over to the original IFRS regulations seriously underestimated the scale of the project at the time, resulting in significant strain on resources to ensure their compliance. Planning really is your friend, as otherwise compiling accounts under the new system could take up to five times as long.
Engaging with your clients
While accountants can do a lot of preparation behind the scenes, shifting mindsets within clients can be a tricky task. Accountants will need to have extensive conversations with their clients to build out the working papers and provide evidence on various decision-making processes. You’ll also need to explain how and why their final accounts will look different.
It’s better to discuss these things proactively, so you can effectively manage client expectations. Such conversations may also open up opportunities to sell a wider range of business services to them. This may be time-consuming, so schedule your meetings sooner rather than later.
Scoping out the size of the task
Next you’ll need to understand how long the transition process will take for each of your clients. To do this, you can try using a UK GAAP Impact Calculator Tool, which can help you size up the challenge of your firm’s FRS transition and the associated number of man-hours required.
The calculator will calculate the total client numbers, how many require conversion and warn of those it deems the most complex to transition. Once you’ve inputted a number of adjustable assumptions and client information, the tool will then calculate the predicted time it will take to convert your clients.
And in no particular order, some other things to think about for FRS conversions include:
- doing a pilot with one (simple) client in order to gain a practical understanding of the information and decision-making required
- resource planning – can you handle the workload with your existing resources?
- training requirements for key team members
- appointing an ‘FRS Champion’ with overall responsibility for driving the change
Still a bit bamboozled? Accountancy Age have put together three in-depth briefing documents which can walk you through the above in more detail.