Small businesses now have access to software that previously only large firms could afford.

You may have heard or seen advertised Making Tax Digital (MTD), a process used by HMRC that enables businesses to electronically report underlying VAT transactions directly to HMRC. Digital transfers of tax information will soon be a requirement for all businesses, but that shouldn’t be viewed as a burden. Moving to digital accounts offers a business so many benefits, and those that fully embrace it will realise its full potential.

A timeline is in place which will require all business and personal taxes to be reported digitally by 2026. Currently VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns. Moving forwards – Self-employed businesses and landlords with annual business or property income above £10,000 will need to follow the rules for MTD for Income Tax from their next accounting period starting on or after 6 April 2023. Finally it is anticipated that Corporation Tax will be made digital starting April 2026.

Whilst these later dates may seem a long way off, there are so many benefits to becoming digital well in advance of the expected deadlines. Using software for your business and personal finances increases efficiency and reduces errors, and all at a cost that is affordable. At NSG we offer cloud based accounting software to all of our clients, as we understand its importance and the huge range of benefits it offers, some of which are highlighted below. Our recommended cloud accounting software is Xero due to its functionality and ease of use, however we also support other cloud based software including Quickbooks and FreeAgent.

• Store your accounts data all in one place updated in real time using automatic bank feeds.
• Real time accounts data allowing you to make informed decisions about the business as you go.
• Invoice directly from your accounting software (updating the accounts), emailed directly to the client with payment options to allow them to pay through the invoice.
• Easily identify the customers that owe the business and those who the business owes, allowing you to manage cashflow more efficiently.
• Cloud based software only requires internet access, this means that you and your employees or accountant can log on at any time and collaborate together.
• Utilise cloud AI intelligence to read receipts and invoices, improving efficiency, reducing manual entry and updating the accounts.
• Store all purchase invoices, receipts and other relevant documents in the cloud, accessible anywhere, perfect for working remotely.
• Payroll, VAT, CIS, Corporation Tax enabled and filed directly with HMRC
• No duplication of data as all data is stored in one place and in the cloud, saving time.
• A huge offering of additional apps link seamlessly with your accounting software, providing additional functionality, including cashflow forecasts, monthly management reports, and complex inventory management.

These are just some of the highlights we believe are most beneficial, however if you would like to learn more about digitizing your business including the most appropriate apps, then please get in touch.