The Modern Accountant |💼 From Accountant to Fractional CFO

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🧰 Your Toolkit to Become a Fractional CFO

67% of accountants are ready to adopt modern payment systems. But evolving into a true strategic advisor — a fractional CFO — requires more than tools. It demands a mindset shift.

In a tightening economy, clients expect more than bookkeeping. They need insight, guidance, and forward-looking financial strategy. This is where the rise of the fractional CFO comes in — blending traditional accounting know-how with tech fluency and business acumen.

So how do you get there?

Modulr’s latest guide breaks it down into 5 actionable steps — from mastering real-time financial data to optimising payments infrastructure and automating cash flow reporting.

📖 Read: How to Become a Fractional CFO in 5 Steps

Sector Spotlight 🌟

TAX GUIDANCE UPDATES

HMRC Updates Guidance On Capital Allowances For First Year Allowances

HMRC's latest adjustments to its guidance on capital allowances mark a significant step in clarifying complex taxation aspects. Particularly noteworthy is the update on the definition of "unused and not second-hand" concerning first-year allowances (FYAs). This update aims to clarify situations where new components, such as those used by Hunter and Ball Ltd, qualify for full expensing when integrated with existing machinery. Importantly, only expenditure on new components, not blended second-hand ones, qualifies, steering businesses towards strategic investment in new assets.

Other pivotal changes include refining definitions of chattels and fixtures, and elaborating rules for real estate investment trusts. As the tax landscape continuously evolves, HMRC pledges further updates, especially concerning leasing and employee entitlements. While current modifications might seem meticulous, they underscore HMRC's commitment to helping businesses make more informed financial decisions while navigating the nuances of capital allowances. This adaptability is essential for businesses striving to optimise their fiscal operations.

ACCOUNTS AUTOMATION

Guide to Using OCR for Automated Accounts Payable Processes

Employing OCR (Optical Character Recognition) in accounts payable automation transforms a tedious, error-prone task into a streamlined process, enhancing efficiency and accuracy. The automation journey begins with the collection of invoices through various channels, followed by OCR software extracting critical data like supplier details and invoice numbers. Integrating this with platforms like PaperLess, firms see improved financial operations due to fewer manual errors, quicker approvals, and easily accessible audit trails.

For effective AP automation, start with small pilot groups and gradually extend its use. Training staff ensures smooth adoption and accuracy improvements over time. With its integration capability, OCR is a boon for finance teams, making operations scalable and focusing resources on strategic goals. In a world swamped with invoice volumes, systems powered by intelligent OCR are the linchpin in maintaining precise processes and robust data handling, truly supporting finance as it scales.

SME AUDITS

Is The FRC Simplifying SME Audits Through New Standards And Support?

The Financial Reporting Council's (FRC) endeavours to simplify audits for SMEs have sparked mixed reactions. While aimed at easing complexities, the real-world implications might not fully satisfy the expectations within the audit community. Audits have become seen as cumbersome, both in practice and cost, driving smaller firms away. The International Standard on Auditing for Less Complex Entities (ISA for LCE) proposes a tailored method, but its applicability remains limited due to inherent business complexities. Meanwhile, the FRC's move towards releasing additional guidance suggests a positive, albeit incremental, journey towards alleviating the audit burden.

Interestingly, the ISA for LCE wouldn't be feasible for larger or more intricate organisations. Given the UK's hesitance to adopt, a realistic standpoint is to anticipate practical guidance from the FRC to better tailor auditing processes without skimping on quality. Scalability provisions already exist within current frameworks, yet their underuse highlights the tension between maintaining thorough audits and avoiding overburdening processes. Thus, the FRC's future practice note could serve as a beneficial tool in striking this balance.

MTD IMPLEMENTATION

New Guidance Stresses Accuracy for MTD Submissions, Warning Against Nil Entries

In the latest update for tax professionals, major UK accounting bodies clarify the standards for Making Tax Digital for Income Tax (MTD for IT), due to launch in April 2026. The guidance urgently advises against nil submissions in quarterly updates, stressing the need for accuracy and adherence to Professional Conduct in Relation to Taxation (PCRT). Tax professionals are reminded to ensure all updates reflect actual figures, supported by HMRC easements where applicable, instead of placeholders or assumptions.

The guidance answers ten FAQs about common issues, such as managing client transitions and handling third-party data. It reinforces that all involved in MTD services must apply appropriate checks and professional judgement, ensuring submissions align with PCRT standards while awaiting further HMRC clarifications. This move aims to prepare agents for the impending MTD mandate, fostering accuracy and compliance in digital tax submissions.

AUDIT COMMUNICATION STRATEGIES

Improving Communication in Group Audits with Tips for Navigating Language Barriers

Effective communication in group audits is crucial, especially when working with international teams where English proficiency varies. Simplifying your language, avoiding cultural assumptions, and staying away from idioms and slang are essential. Keeping things straightforward and speaking at a measured pace helps avoid misunderstandings. Additionally, listening carefully and soliciting feedback ensures everyone is aligned and misconceptions are clarified.

Visual aids and careful use of humour can also enhance communication, as can replacing jargon with clear alternatives. For instance, instead of asking about "bandwidth," ask about "time availability." Such adjustments not only support clearer interactions but also foster a more inclusive and productive audit process. Understanding and respecting cultural and linguistic differences enable finance professionals to collaborate more effectively across borders, safeguarding the quality and success of audits.