In the modern business world, it is more important than ever to be working with a digital accountancy practice – not only for compliance reasons. Below we detailed just some of the benefits your firm could experience as all of our client’s already have.
Why do you need a digital accountant?
HMRC’s Making Tax Digital initiative went live as of 1st April 2019. Making Tax Digital requires that records of income and expenditure must be kept digitally and filed quarterly. This is one of the most significant changes since the introduction of PAYE and VAT.
Who does this affect?
Small businesses, landlords and the self-employed with turnover above the VAT threshold.
When will they have to use the digital service by?
- From 1st April 2019 onward, only businesses with a turnover above the VAT threshold (currently £85,000) are required to keep digital records and only for VAT purposes
- businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020
- for those under the VAT threshold digital tax is optional
What are the benefits to your business of using a digital accountancy practice?
With a traditional accounting firm you will receive and review your accounts at the end of the year. However, using software provided by a digital accountancy practice allows financial information to be updated regularly and accessed at all times. Therefore, you are always aware of your current financial position and won’t get a shock at the end of the year when the accounts are prepared.
Forecasting and Planning
Being proactive, not reactive. By being constantly aware of your financial position, day by day, forecasting and tax planning can take place sooner. Your firm can prepare for what is expected to happen and make necessary adjustments, putting you at ease, rather than problems being too late by the end of the year.
Using digital accountancy software saves a lot of time and effort on bookkeeping. Rather than having to hire a bookkeeper or do it for yourself, pictures of receipts and invoices can be uploaded via smartphone, desktop or emailed. Relevant data is extracted, requiring no data entry from you. The information is then sorted and categorised and can be used for bank reconciliations, payroll and sales. A burdensome task that consumed hours is now completed easily and efficiently.
While filing cabinets can be locked and desktops can have security systems, they do not provide the same level of security that digital accountancy software packages provide. Data is encrypted and there are many layers of firewalls as well as regular security audits being performed. Data centres and servers are monitored 24/7 which is protection you cannot gain from a locked filing cabinet without hiring a security officer all day. Thus, you can relax knowing your details are safe and secure.
A traditional accountancy firm will save clients’ information on their desktops in the office or store it in their filing cabinets. Employees, therefore, cannot access information without being in the office. A digital accountancy firm can access data anywhere as long as they have a smartphone, tablet or laptop with them and can therefore respond to queries from any location or if a desktop breaks down in the office. This provides faster advice to you as the client.
With cloud accounting reducing the time and effort spent on business administration, more time can be spent with you, reviewing your situation and providing you with tailored advice when required. As digital accountants, we are not just focused on transactions but on interpreting the figures and using them to provide advice that will help expand and improve your business.
More frequent meetings
Rather than just meeting at the year-end, we have the time to meet throughout the year to help you grow your business and reach its full potential. Thus, your accountant is not a distant figure you see, roughly, once a year. We can collaborate and build relationships with you, as the client, as we see you more often and get to know the ins-and-outs of your business.
Discover more about our process and how our digital accounting services can help your business succeed. Already heard enough? Then get in contact with one of our specialists today to revolutionise your business!