Digital Accounting – What is it and why should I adopt it?

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Digital Accounting – What is it and why should I adopt it?

Back in July 2017, HMRC set out it’s plans to digitise accounting, making it easier for consumers and business to get their tax right and creating the one of the most advanced tax systems in the world.

So how does this affect me?

Since the launch of MTD (Making Tax Digital) for VAT in April this year, businesses above the VAT Threshold will have to store all of their records digitally, in order to submit them via MTD compatible software. At some point in the near future (delayed from April 2020), this requirement will be rolled out to all businesses, to sudmit their corporation tax, Income Tax and National Insurance obligations digitally. This will also mean that all of these tax submissions will need to be submitted quarterly; instead of having an annual tax return, these will be replaced with a digital tax account where all your information will be stored.

Realistically, this means that, if you have not already moved a cloud accounting package. you will probably need to in the near future, as it will become increasingly difficult to continue to use existing desktop pc software or spreadsheets. Whilst there are ways to transfer the data, these changes by HMRC, will see most software companies move to cloud based software and stop support for their older packages.

Thankfully we do have an answer for this, with our own Tick & Bash accountancy software, that is fully compliant with HMRC and comes included with our accountancy services.

The benefits of going digital

There are big advantages to moving to digital accounting software. For example:

  • Generate invoices digitally and email them to customers (or you can still print and snail mail them). You can even get paid directly from the invoice, with integrated payment links.
  • A clear indication of what invoices you have outsanding and who you have to pay.
  • Bank data can be fed directly into your accounts package on a daily basis.
  • Upload of receipt and invoices. No need for hundreds of physical files and folders.
  • Up to date information. At worst you should have data up to your last quarter.
  • Better reporting, most packages have clean and simple dashboards to allow you to track sales and purchases.
  • Estimating your current tax position.
  • Online tax filing.
  • Client and supplier management
  • Secure cloud storage with no need to manually backup your data.
  • Reduction of hardware costs – with your accounts software in the cloud, there is no need to upgrade your pc or server as often, just to keep up, as all you need is access to the internet. This also mean no annoying updates to worry about.

These are some of the big plus points, but there are more and new features get added all the time. Simply put digital accounting is faster, more efficient and makes your life easier.

So how would I switch to digital accounting?

As we said earlier, there are a lot of digital accounts packages out there, but if you’d like to make the switch quickly and easily, you can move our own software, Tick & Bash, free of charge when you sign up for our accountancy services. Setting up is quick and easy, we will help you get underway and in addition there is a full online help service. Our software also has a mobile app you can access on the move so you can always keep on top of your finances.

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