TechnologyMaking Tax DigitalMTD: We’re all going to have to get digital

MTD: We’re all going to have to get digital

There are as many questions surrounding the MTD initiative as there are answers. One thing is certain though: we’re all going to have to get digital

Are you the type to start queueing for the latest iPhone the day before its release, barely able to contain your excitement? Or maybe you are more likely to reach for a notepad and pen than a laptop?

Whether you are an early adopter of technology or you are still clinging to your parchment and quill, Making Tax Digital (MTD) is going to affect us all. Of course, none of us knows exactly how it is going to affect us and there are as many questions surrounding the MTD initiative as there are answers. One thing is certain though: we’re all going to have to get digital.

Are your clients MTD ready?

You may well have had clients asking about MTD already. Some will be worried that it’s going to mean a heavier workload; others are worried that they’re going to end up paying more tax – but the biggest fear for many is the technology issue.

Every business will have to use some form of digital accounting to be MTD compliant and the majority of small businesses simply aren’t ready for the change. Given that a whopping 65% of small businesses are going to have to adjust their accounting processes, 23% are using manual records and 16% are still using the shoebox method, there is a lot of work to be done.

If you are already using digital accounting software with your clients, that’s great! You’re ahead of the curve, and becoming fully MTD compliant shouldn’t prove too tricky. But if you haven’t yet been sold on the idea of using digital software, it’s time to join other accounting firms in looking into your digital options.

The benefits of digital accounting

Even without the advent of the MTD initiative, introducing digital accounting to your work processes can be a huge boost to your practice. While many clients are still behind in their own bookkeeping practices, they rely on their accountant to be up to date with the latest technology.

Just like the rest of us, they want working with their service providers to be seamless and simple. In the context of accounting, that means they want to be able to access their accounting records online, from multiple devices, and they want to be kept in the loop without having to take time out of their busy schedules to call or email their accountant.

How to choose the right accounting software for you

There are so many options out there and you want to be sure that you are choosing the best one for you and your business. So, what should you be looking for in a great MTD-compliant software system?

Secure information sharing

One of the things that people fear most when it comes to the internet and new technology is the security of their information – and this goes double when it comes to money matters.

Your clients will be reassured if you choose a software package that takes security seriously. You want to be sure that your data won’t be hacked or compromised and that everything is constantly backed up so that if your computer crashes, your data is safely stored on a secure cloud server.

Efficient invoicing

If we counted the hours spent creating, sending and chasing unpaid invoices, it would be terrifying.

It makes sense then to choose a digital accounting system that simplifies the entire process, allowing you to create branded invoices easily and let clients settle their invoices using your preferred payment method, at the touch of a button.

You also need a system that makes it easy to see which invoices have been paid and which are outstanding, with customers sent automatic reminders if they don’t pay within the stipulated timeframe. With software like this, your invoices will always be there, ready and waiting for you to complete your VAT report. And speaking of VAT…

VAT returns made easy

You can save yourself a headache or two by choosing a system that makes submitting your clients’ VAT returns a breeze. Find software that allows you to generate, store and submit VAT returns directly to HMRC.

This will enable you to compare the various VAT schemes and calculate which will be the most cost-effective for your customers.

It’s also beneficial for the software to be fully compliant with VAT MOSS invoicing and, for construction industry clients, find a system that will enable you to verify subcontractor details directly with HMRC and prepare and submit contractor CIS returns online.

Support and training

If you’re brand new to using digital technology in your accounting practice, you will want to choose a company that knows how to support its user community.

While certain software is very intuitive and easy to use, digital accounting is bound to take a number of accountants out of their comfort zone — make sure that you’re not left out there all on your own!

Find a provider with an active community forum, which you can use to ask customers and staff for advice and support on getting the most out of the software.

Look out for providers with a UK-based telephone and email support system, which you can use if you have any additional questions. If you prefer a more personalised approach, find a provider that will arrange to come to your offices to deliver a training session tailored to your specific business needs.

Making Tax Digital doesn’t have to be scary

In fact, it can be an amazing opportunity. Sure, no one likes to be forced to do things before they’re ready, but the fact is, implementing digital accounting now will benefit your practice in a number of ways. You’ll be able to communicate better with clients, offer a slicker service and save them some money too.

Happier clients, happier accountants. Talk about a win-win!

Don’t just take our word for it; try a free Clear Books trial today!

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