Making Tax Digital for VAT – New penalties for non-compliance
HMRC have issued guidance for VAT-registered business and their agents on how to avoid penalties for non-compliance with the Making Tax Digital for VAT (MTD) rules.
In particular, there is a new £400 per return penalty if you file a return but do not use functional compatible software.
There are additional penalties if the business does not keep its records digitally. HMRC may charge you a penalty of between £5 to £15 for every day on which the business does not meet that requirement.
Key extracts from HMRC guidance include:
You must file your VAT return using functional compatible software
Functional compatible software means a software program, or set of software programs, products or applications (apps) that can:
- record and store digital records.
- provide HMRC with information and VAT returns from the data held in those digital records.
- receive information from HMRC.
You must keep records digitally
You must keep some records digitally within your functional compatible software. This is known as your ‘electronic account’. Your electronic account must contain:
- your business name, address and VAT registration number.
- any adjustments from calculations you make outside your functional compatible software for any VAT accounting schemes you use.
- the VAT on goods and services you supplied, meaning everything you sold, leased, rented or hired (supplies made).
- the VAT on goods and services you received, meaning everything you bought, leased, rented or hired (supplies received).
- any adjustments you make to a return.
- the ‘time of supply’ and ‘value of supply’ (value excluding VAT) for everything you bought and sold.
- the rate of VAT you charged on goods and services.
- your reverse charge transactions, where you record the VAT on the sale price and the purchase price of the goods and services you buy.
- copies of documents that cover multiple transactions made on behalf of your business, like those made by volunteers for charity fundraising, a third-party business or employees for expenses in petty cash.
All transactions must be contained in your electronic account, but you do not need to scan paper records like invoices and receipts.
Our team at Kirkwood Wilson are here to support you with your digital accounting, and help you prepare with the latest compliance. If you would like to learn more please contact us for simple and straightforward business advice.
Business recovery planning: How your local accountants can help your business get back on track
What is business recovery planning?
Business recovery plans are the plans used by the operational teams of a business following an incident which affects their ability to operate normally. They usually consist of contingencies for core processes, plant and assets, business partners and human resources. They also include (but are much more comprehensive than) disaster recovery plans for information systems. Their main goal is to facilitate business continuity.
Why is a business recovery strategy high on today’s agenda?
Business recovery planning covers all sorts of unforeseen events, from fires to floods to terrorist attacks, and therefore the plan is usually very broad in its scope. Where the assumption is a physical set back of some kind (like a flood or a fire), the business recovery strategy employed will be around buildings, equipment, etc.
However, the impact of COVID-19 has put many businesses, large and small, into positions where they have been trading at levels far lower than those required to make a profit – in some cases businesses in industries like hospitality have had to temporarily shut down. In both cases, although the government has been supporting the wage bill through furlough, rent and other overheads have still been outgoing costs which have had to be covered in the meantime and businesses that are still operational have had to completely adjust working practices.
If you didn’t have a business recovery strategy in place before Covid, it may be that you’re thinking about putting one in place for future contingencies.
When should business recovery planning be put in place?
Realistically, as soon as possible after the event in question. It’s a potentially complex and wide-ranging strategy that can cover things as simple as where people can work from in lieu of the usual office space availability and getting business insurance claims started, through to IT backups, failover sites (digital and physical) and supplier failure contingency.
Where do accountants fit in with your business recovery strategy?
Having an accountancy business in place and ready to support you when you need it most is critical not only to ensure business continuity during what may be a financially tough time, but will also give you peace of mind that someone who knows your business is there to help. Accountants will be able to help with the following areas:
- Cash flow modelling and forecasting
- Cost reduction recommendations
- Securing additional Time to Pay through HMRC
- Sourcing alternative finance options
- Overall health check and solvency review
How Kirkwood Wilson Accountants can help in your business recovery planning
As local accountants who specialise in healthcare and construction – including CIS – we have an in-depth knowledge of the kinds of issues that can arise in your industry and the types of support that you will need to get your business back on track.
We work closely with our clients to ensure we understand where your skills lie and where you might need us to step in during an emergency. For more information on how we can help your business recovery strategy take shape, get in touch on 01704 546 000 or email enquiries@kirkwoodwilson.co.uk.
Why your small business needs an accountant
You might be mistaken into thinking that as a small business, you are able to manage your own accounting and bookkeeping. However, as with any business, whether small or a start-up, the aim is always to grow. By enlisting an accountant, you can focus on the growth of your business whilst they handle all the paperwork. Read on to find out more about why your small business needs an accountant.
What do we mean by small business?
Of the 5.5million registered businesses in the UK, over 99% of them are classified as a small to medium-sized business. These small businesses and start-ups cover a whole range of useful and luxury goods, or services and experiences. However, small businesses have a number of defining characteristics that help to identify them as a small business.
To be legally identified as a small business, your organisation must consist of less than 50 employees, with a turnover of less than £10,000,000 annually. A micro business is a little bit smaller than that, with less than 10 employees and a turnover of less than £2,000,000 annually.
What a small business accountant can do for your business
In the UK, company accounts must be submitted to Companies House every single year, regardless of whether your company has been active or dormant in the last 12 months. Your accounts must be registered with Companies House within 9 months of the last Accounting Reference Date, also known as the ARD. This is usually the anniversary of the last calendar day of the month your company was registered. So, for example, if your business was registered with Companies House in January, your accounts must be filed with Companies House in the following September.
If you run a small business, or you are self-employed, an accountant can bring considerable advantages. We’ve listed a few of the top ones below.
An accountant helps you handle growth
As a small business, your aim is likely to be that you want to grow your business sustainably. By hiring an accountant, they will be on hand to help you handle these growth transitions, such as hiring new employees or moving to new locations. Your small business accountant will be on hand to look after the finer details of your businesses growth, such as payroll, employee tax management, property taxes, utilities and so much more. This frees up a considerable amount of your time to run your business.
To improve your cash flows
The old saying goes, “cash is king” and in business, this couldn’t be any more true. Cash is the fuel that will keep your business running and without proper control of your cash flow, you cannot make the critical business decisions necessary to keep your business running.
Having a good small business on hand will help you to ensure that you have good credit control and cash management policies. For example, say your business offers services or goods on a 30-day payment term. By hiring an accountant, they can work to keep your business on top of your finances and ensure that you have good credit control with your customers paying on time.
Reduce your workload
Understandably, you will want to focus your time on the day to day running of your business rather than spending your precious time and resources on bookkeeping and compliance. This is where an accountant comes in handy.
Let’s say, for example, that you run an Amazon business dealing in technology. Business is booming and you need to ramp up your resources to keep up with demand. This is where an accountant that specialises in accounting for Amazon sellers will come in handy. They can handle all of the day to day running of your business bookkeeping whilst keeping up to date with tax and company compliance.
They provide valuable business advice
When you choose the correct accountant, they will also be able to serve as a valuable resource for business advice. Carrying with them a wealth of knowledge and experience from dealing with companies and clients from all walks of life, an accountant will be well versed in most of the problems and challenges you may encounter in your business.
As a result, they are a brilliant resource for sound boarding ideas off and providing valuable business advice. For example, imagine you have a small food takeout business that is booming in popularity. So much so, that you consider opening a new location in another town. Your accountant will be on hand to help advise you on the potential challenges and pitfalls you may face as a business owner looking to expand, to help eliminate some of that risk.
They help you to process payroll
Businesses with employees need to operate payroll effectively and in-line with proper payroll regulations to ensure that employees are treated fairly and legally. By not complying with payroll regulations, your business could face huge fines and backdated tax bills that may ultimately lead to the collapse of your business.
By hiring an accountant to handle payroll for you, your business will not fall foul of payroll regulations, leaving you with one less thing to worry about.
To help measure your businesses performance
Oftentimes, business performance is neglected by small business owners, as is setting timely and measurable business objectives. It has been suggested that approximately 90% of startups fail because they fail to keep on top of their objectives and measure these against their performance. However, an accountant will help you to understand your business’s performance that will enable you to effectively plan your business growth moving forward.
They keep you up to date with tax and compliance regulations
By hiring a business accountant, they will help you stay up to date with the very latest in tax legislation and other regulations. In doing so, your accountant will help you from falling foul of legislation that may affect your business and cash flow should you encounter large fines and tax bills.
As an example, perhaps you are struggling to keep on top of your accounts and taxes, with HMRC stepping in due to large unpaid corporation tax bills. In this instance, your business will most likely incur large fines and backdated tax bills. However, by having a small business accountant in place, you can avoid this issue altogether as they file your company accounts annually and calculate your tax bills.
Find a small business accountant
You can see why it is so important to find a small business accountant to help you grow your business, whilst also managing your accounts and ensuring that you keep up to date with the latest tax legislation and compliance.
When you are looking for a business accountant, it is important to not just consider the cost to your business. You need to also consider the service they are providing and how good their customer service is. It is vital that you feel comfortable enough to be able to have frank business discussions with your small business accountants about the future of your business and they must understand the nature of your business to help you operate effectively.
Consider all of these factors when looking for your first small business accountant and watch your business flourish with their support.
The importance of bookkeeping when selling on Etsy
During the past year, the percentage of retail sold through ecommerce platforms like Etsy rose from less than 20% to well over 35%. In the course of a single year that’s a phenomenal change, and it’s thanks to the entrepreneurial, open-minded makers and crafters who were able to take up that challenge and move their goods online during the toughest of conditions that we have been able to continue to send beautiful gifts and treat one another even in the hardest of times.
However, along with the creative side of doing business online comes an aspect that some of us are less keen on – accounting. It will do you no favours to simply stick your head in the sand when it comes to bookkeeping, so we take a look at the importance of bookkeeping for Etsy sellers, what support is available, and what you can expect from an Etsy accountant.
Why is bookkeeping for Etsy sellers so important?
Bookkeeping for any business, large or small, ecommerce or face-to-face, is important because it allows you to keep track of day-to-day financial transactions like sales and purchases. However, what sets apart the kind of business done over ecommerce platforms like Etsy is the speed at which these processes take place; goods are bought and shipped in a matter of hours in many cases, with purchases then immediately made to maintain stock levels. Below are just some of the reasons why bookkeeping is so important for Etsy sellers:
Keep track of income and outgoings
In order to understand what money you are making and spending and to keep a control on that expenditure day-to-day, you need to ensure that you are keeping track of those movements. Software such as Xero is designed specifically with bookkeeping for Etsy sellers and other ecommerce platforms in mind; it integrates directly with ecommerce stores so that the tracking of finances is smooth and automated, and you can access that information at any time and from anywhere via an app.
Manage cash flow
As a small business, cash flow is equally as important as – if not more important than – profit. Whilst one of the key reasons for being in business is profitability in the long-term, if your cash-flow doesn’t enable you to pay your suppliers or workers, you won’t stay in business very long. Bookkeeping allows you to keep control over your cash flow, make sure that you are receiving money when you expect to, purchase stock only as you need it and pay your suppliers at a time that gives you the best chance of success.
Analyse successes and capitalise on them
Bookkeeping, for Etsy sellers just like all other small businesses, helps to inform you of what is going right and where you could improve. If you track when you sell goods, how much profit you make and from which product lines into which market areas, you can start to track what works for your business and what you should do more of. If you choose to work with a management accountant, Etsy, combined with the information from your cloud accountancy package, will provide them with all the data they need to be able to analyse which areas to invest in, expand on and promote, as well as enable you to forward plan for the future.
If you are looking for an Etsy accountant who can support you in growing and managing your business, Kirkwood-Wilson Accountants are experienced in bookkeeping for Etsy sellers; we are Xero Gold Partners and can support you in the set-up and installation of a cloud accountancy tool as well as providing you with accountancy services to fit your needs longer term.
If you want to feel like you are in control of your business but with the support of an experienced Etsy accountant, get in touch with us for a chat about your business on 01704 546 000 or email enquiries@kirkwoodwilson.co.uk.
Selling online? Why you need our ecommerce accounting services
Setting up your own online business is exciting! Finding out what works for your customers and watching your turnover grow over time, not to mention the many benefits in terms of managing your own time and making your own decisions, can be exhilarating. However, the idea that we have to suddenly become experts in every area of business – from marketing and sales to accounting and employment law – can be daunting.
The most effective way to run a business is to try to understand the basic requirements of every area of your business, match those with your own abilities, and outsource the bits that don’t fit with your skills, your time or your passion. The great thing about ecommerce accounting services is that, done properly, you can choose exactly which areas of your finances you want to outsource and keep the rest for yourself. We take a look at some of the benefits of using an experienced ecommerce accountant and how we could help your business grow.
How do you start your own ecommerce business?
Before we get down to the benefits of using an experienced ecommerce accountant, we thought we better start with the basics. How exactly do you start your own ecommerce business?
Firstly you need a product or a service. Once you have this, there are plenty of tools online to help you get set up to start selling across a range of platforms, including Amazon, Etsy and Ebay.
One of the most important things to consider when setting up your own ecommerce business, is to get everything you need in place from the start. We are seeing more and more ecommerce business men and women who are supplementing their full time job with income from their ‘side-hustle’. With this comes the potential for nasty tax bills in the future, especially if you’re already close to the higher-rate tax threshold in your ‘normal’ job.
Organising an ecommerce accountant from the very start can not only help you avoid expensive tax bills, but they can also help you with business advice including cash flow management, setting budgets and giving you the tools you need to help your business grow.
The benefits of using an experienced ecommerce accountant
Now we understand the importance of having that accountancy support right from the start, let’s take a look at some of the other benefits of having an experienced ecommerce accountant in place for your business.
Keep control of your finances
We’re not suggesting you hand over your accounts (and therefore your financial control) to someone else. Quite the opposite, in fact. We believe that all business owners should feel completely in control of their finances, whether you are running a multi-million pound manufacturing business or a sole trader ecommerce business selling handmade goods from your kitchen.
One of the great advantages of employing ecommerce accounting services which are designed specifically for businesses like yours is that, when used properly, you have access to, and total control over, your own business’ finances.
Have full visibility of your business’ finances
One of the fantastic changes that accountancy has seen over the past decade is the development of excellent cloud accountancy packages which can be fully integrated with your ecommerce store and provide you with the tools you need to run your business and your finances seamlessly.
We recommend that you choose a package like Xero, which provides an app so that you can manage your finances on the move, as well as giving you a solution that will track sales, costs and inventory so that you can take care of all your key financial aspects in one place. You can then choose how much intervention and support you want from your ecommerce accounting service provider, and that’s where ecommerce accountants like Kirkwood-Wilson come into our own; our expertise in digital accounting combined with experience in supporting small business owners of ecommerce sites means that we understand just how much flexibility you need.
Create your own financial support package
It may be that you’re looking for ecommerce accounting services that will support you from the outset, assisting with setting up your cloud-based accounting software and helping you to integrate it with your ecommerce platform to ensure that the data is correct and the outputs are providing you with the right level of support.
We did exactly this for our client Mad Fashion, who moved from manual tracking of stock, sales and costs to Xero, which fully integrated with their existing ecommerce site to take the pain out of their financial tracking. You can read more about how we supported them as a Xero Gold partner in their case study.
However, you don’t need to go all-in; Kirkwood-Wilson Accountants offer ecommerce accounting services that are completely tailored to your needs. Not only are we a Xero Gold partner and therefore well placed to help you set up digital accounting, but we also offer a range of basic accounting packages that can be adjusted to fit your needs and the needs of your business.
Choose ecommerce accounting services you can trust
If you are looking for an ecommerce accountant, we will work with you to understand the level of support that your business requires and make sure that you receive just the right amount of back-up and advice to give you the best chance of growth – without breaking the bank.
To find out more about our ecommerce accounting services, get in touch for a free consultation on 01704 546 000 or email enquiries@kirkwood-wilson.co.uk.
Connecting Receipt Bank with your Futrli app
Here at Kirkwood Wilson, we are passionate about staying up to date with the latest accounting software. We are always on the lookout for new technologies that can help our clients to achieve their accounting goals. Read on to find out more about Futrli and how connecting it to your Receipt Bank app can help you to improve your financial records.
What is Futrli?
Futrli is an accounting app for the UK market that was formerly known as CrunchBoards. This app allows you to create financial forecasts and reports based on either financial or non-financial data. Here at Kirkwood Wilson Accountants, we advocate Futrli for medium to large businesses that often require much more extensive reporting on their budgets, KPIs and cash flow.
Through Futrli, business owners can receive both their financial and non-financial KPIs, with the ability to generate 3-way forecasts across a 10-year period. This is part of what makes Futrli such a popular accounting app in the UK. Not only this, but Futrli can also provide you with multiple “what if” scenarios for different circumstances. So you always have an idea of how things will play out for your business.
Find out more about Futrli by reading our blog post, ‘What is the Futrli app and how can it help you?’.
What is the Receipt Bank app?
Receipt Bank is a UK accounting app that claims to be “the #1 remote working tool for accountants and bookkeepers”. This accounting app works to connect business accountants with their clients by capturing receipts and data in an instant. You simply need to snap a picture of any receipts relating to your business, and the Receipt Bank app does the rest. It extracts the data to remove any of the key details that the accountant will need, and stores this securely on a cloud-based system. This means that your data is only accessible by approved parties.
Here at Kirkwood Wilson, one of the reasons we love the Receipt Bank app so much is that it can seamlessly integrate with the leading accounting, payroll and payment software. This means that Receipt Bank fits seamlessly into a complete end-to-end solution that will meet your business needs.
How Receipt Bank works
The Receipt Bank app is a great way to capture, store and keep track of all of your business receipts, bills, invoices and bank statements to share with your accounting team. You simply need to use your phone to take a photo of the bill, receipt, invoice or bank statement and then upload to the Receipt Bank app from anywhere on-the-go. What will you do with the extra time saved by scrapping time-consuming financial admin?
Connecting Receipt Bank with your Futrli app
Whilst Futrli turns your bookkeeping data into daily insights, Receipt Bank is a secure way to upload and store all forms of business transaction data. Coupled with Futrli’s prediction and planning software, Receipt Bank can assist in helping you make the right decisions to keep your business growing. To connect, you simply need to integrate your Receipt Bank app with the Futrli app in your account settings.
Speak to Kirkwood Wilson to find out how accounting apps can help you
We believe that accounting should be made simple for our clients. This is why we are constantly on the lookout for new and exciting accounting apps that will help you to make the process easier, whilst we do the hard work! This way, we can continue to deliver you our excellent service, whilst also saving you time to focus on the bigger picture – growing your business.
If you want advice on the best accounting apps or how we can help you to get your accounts in order, get in touch with us today. We are always on hand to help you with any of your accounting queries.
What is the Futrli app and how can it help you?
Here at Kirkwood Wilson, we are passionate about keeping up to date with all the latest accounting technology. We are always on the lookout for new technologies and apps that can help us to help our clients in the best way possible. Here, we explore the features and benefits of the Futrli app and explain why we are such big fans of it.
What is the Futrli app?
Before we get started on the finer details of the Futrli app, we thought we should explain exactly what it is. Futrli, pronounced “future-lee” and formerly known as CrunchBoards, can be best described as a piece of financial forecasting software.
The app allows users to create financial forecasts and reports based on either their financial or non-financial data. These can be created either from a pure starting point or using the helpful templates that Futrli provides within the app.
Futrli is perfect for those medium to large businesses that require extensive reporting on their budget, KPIs and cash flow.
Why did the app go from CrunchBoards to Futrli?
For those who are more familiar with this app when it was known as CrunchBoards, it might be worth explaining why the app underwent a rebranding and overhaul.
Futrli’s co-founder, Amy Harris, has stated that the company wanted to focus more on accountant-delivered advisory services. Futrli didn’t want to be known as just another “number-crunching” app. Rather, they wanted to provide a customisable experience for each accounting firm and their clients.
What data can be exported from the Futrli app?
Through the use of Futrli, businesses can receive KPIs, both in the financial and non-financial sense, as well as data from various date periods, whether transactional or cumulative. One aspect of Futrli that makes it so popular with businesses is the ability to receive 3-way forecasts across a 10-year period.
Not only that, but the app can also provide you with multiple “what if” scenarios for various different circumstances. For example, say you knew that you needed to reinvest some money elsewhere, you’d be able to receive a forecast for this particular scenario which would give you an idea of how this would play out for you and your business financially.
How Futrli works alongside other accounting apps
Here at Kirkwood Wilson, we are big advocates of digital accounting and work with several accounting apps, such as Xero and Receipt Bank. This is to ensure our clients receive the best services and can access their financial information with ease.
Futrli can be easily integrated with other accounting software, such as Xero. Through this integration, financial data can be automatically updated, which means that users no longer need to manually enter the data themselves.
This integration is ever-more effective as forecasting can come directly from the previous year’s financial data, providing more of an accurate forecast.
Kirkwood Wilson and Futrli
With many users of Futrli labelling this app as a “clever” and “innovative” way to visualise your money flow, we just had to get in on the accounting action – so to speak!
We believe that accounting should be made easy for our clients. We always want to ensure that our clients receive the best services possible, which means we are always on the lookout for new and exciting apps to make these processes easier.
If you want some advice or help with your accounts, then get in touch with us today. We are always happy to help!
Digital bookkeeping made easy with Xero accounting
Choosing an accountant that uses Xero will open your business up to countless bookkeeping opportunities, from allowing you to access valuable pieces of information within a click of a few buttons to enabling employees to preview performance measures. Read on to find out more about Xero Accounting.
How to use Xero Accounting
Finding an accountant who uses Xero doesn’t have to be difficult. If you require an accountant with experience of using Xero accounting systems in your industry, then look no further than Kirkwood Wilson Accountants. We’ve got Xero gold partner status, are highly skilled in Xero accounting, and all things digital accounting related.
So how will Xero accounting work for your business? Here at Kirkwood Wilson, we’ve compiled the following list of examples for how to use a Xero accounting system:
- Log into Xero to view real-time information on cash flow.
- Make informed decisions on improving the efficiency of your business
- Xero accounting will help you get one step ahead with Making Tax Digital (MTD).
- Say goodbye to missing sheets of paper, with Xero accounting system you can store information in one simple place.
- Add in customisable quotes for each task or transaction so you can easily identify transactions.
- Effectively manage clients, including invoicing, reporting and keeping contact details.
Benefits of choosing an accountants with Xero bookkeeping
If you’re a small business owner, you might be thinking that a good way to save money is by completing your own accounting yourself. This can include late nights invoicing and getting to grips with tax returns. In some situations, rookie errors can occur.
Choosing an accountant with a strong knowledge of Xero is the surest path to effectively integrating
a Xero digital accounting system into your business. They can explain the necessary steps needed to streamline your bookkeeping.
Here are just some of the benefits of choosing a Xero gold partner, like Kirkwood Wilson:
- Limit the chances of any ‘rookie’ errors, Xero accounting system helps digitise your accounts and invoice digitally.
- Your accountants will help you to set up your Xero accounting system and talk you through the necessary processes.
- Your accountants will help you to ensure you never miss a tax return deadline.
- Your accountants will provide you with useful information about how to streamline your invoicing payments, helping with cash flow.
Get a Xero accounting system from Kirkwood Wilson Accountants
At Kirkwood Wilson Accountants, we’re dedicated to helping businesses streamline their accounts and a Xero accounting system is perfect for the job. With a click of a few buttons, businesses can access their digital bookkeeping activities and gain valuable insights on cash flow quickly and easily.
Whether on the way to a business meeting or out of the office on leave, employees can access the Xero accounting system from anywhere with an internet connection.
So if you’re on the lookout for a digital bookkeeping system and an accountant who can advise on a Xero accounting, Kirkwood Wilson Accountants can show you how Xero accounting can work for your business!
Why not speak to one of our expert Xero accounting system accountants today by calling us on 01704 546 000?
The benefits of digitising your accounts
Moving away from manual accounting practices, miscellaneous receipts, and excel spreadsheets can be a daunting task. However, getting up to date with the era of digitalisation, will not only make your business compliant with HMRC ‘Making tax digital’ (MTD) initiative but, can also reap numerous benefits for your business. Here at Kirkwood Wilson, we are specialists in digital accounting and are here to take you through the benefits of digital accounting and explain how our expertise can benefit your business today!
What is digital accounting?
As of April 2019, all VAT registered businesses over the taxable turnover threshold of £85,000 were required to keep digital tax records and submit VAT returns via MTD compliant software. This initiative prompted a roll out of digital accounting software and a surge of online cloud accounting systems. HMRC also advised that companies that earn below the VAT threshold can also sign up for MTD for VAT voluntarily, as it would soon be a requirement for all businesses.
Digital Accounting provides the opportunity to transition your business away from manual bookkeeping to keeping all of your business’s financial information in an electronic format. Digitising your accounts will get you ahead of the game and will make tax returns, invoicing, and making payments a much simpler task.
At Kirkwood Wilson, we are a Xero gold partner and experts in Xero online. Xero is an online, cloud accounting system and also compliant with MTD. We are also experts in Sage and QuickBooks, so we can help you make the best decision about which software is most suitable for your business.
So, what are the benefits of digitising your accounts?
- Streamline your business processes
- Increased reliability – digital accounting allows you to keep your data secure
- Suitable for all businesses and industries.
Streamline your business processes
Manual accounting practices always involve a risk of human error and it is virtually impossible to store financial information in one place. This becomes a struggle when it comes to compiling a report or financial summary.
A digital accounting system will store your all of your information in one place, which gives your business access to real time financial data; from cash flow to balance sheets in a few clicks.
Xero online will provide you and your employees with instant access to your finances from any location and any time, as long as you have access to an internet connection. It can also provide daily summaries of your finances, send invoices, track projects, and so much more, saving you valuable time to focus on other business operations.
Increased reliability – keeping your data secure
Digitising your accounts and using an MTD compliant online accounting system will offer more reliability than manually handling paper documents in a filing cabinet. In the event that your business’s financial information goes missing, there will be no need to worry after digitising your accounts and years of financial information won’t be lost in a flash.
With digital accounting you can backup your data securely, meaning that all information is stored in a remote location and can be retrieved any time of the day.
Suitable for all businesses and industries
Of course if you are under the taxable threshold of £85,000, you might be hesitant or not see the urgency to digitise your accounts, as the April 2019 deadline did not apply to you.
However, it is worth bearing in mind that digitising your accounts will move your business into the 21st century, allowing you to focus on your core operations. In addition with HMRC’s mission to be “one of the most digitally advanced tax administrations in the world”, it won’t be long until your tax returns will be required to be digitalised.
Additionally, we understand that it is important for businesses with numerous departments to be interlinked and up-to-date with key financial information. With paper-based accounting, it can be a timely process updating all departments on the latest financial reports. With online accounting software, any stakeholder, with access rights, can access financial information, leading to fluidity throughout your business.
How can Kirkwood Wilson help in making your accounts digital?
As experts in digital accounting, we can offer you expert advice about Xero online cloud accounting system. One of our experts can talk you through the range of benefits that Xero has to offer. We can also advise, how best to integrate digital accounting practices within your business and how to make you HMRC Making Tax Digital compliant.
Not only do we specialise in Xero, here at Kirkwood Wilson we understand that online accounting systems can be daunting, especially with the varied options and platforms available. We also offer training in QuickBooks and Sage to help you decide on the best approach to digitising your accounts.
To find out more about digital accountancy or enquire about our digital accounting services including Xero, Sage and QuickBooks training, contact Kirkwood Wilson today Call 01704 546 000 or email enquiries@kirkwoodwilson.co.uk.
Is Xero Making Tax Digital compliant?
HMRC’s ‘Making Tax Digital’ (MTD) policy has been introduced to enable businesses and individuals to organise their taxes correctly by utilising modern digital software. Xero is making tax digital, through their cloud-based ‘making tax digital’ compatible software. As we all know, in today’s modern age most things are moving online to make life easier and to provide a more environmentally friendly, paper-free approach to filing documents. This is why HMRC’s Making Tax Digital was conceived and in order to accurately implement this policy, Making Tax Digital compatible software is a big must for you and your company.
Making tax digital compatible software
A significant element of HMRC’s Making Tax Digital policy is that businesses are required to implement a fully digital tax system. Therefore, it is vital that appropriate software is installed and utilised to comply fully. This is where Xero comes in.
As provided on HMRC’s list of Making Tax Digital compatible software, Xero has been verified as completely MTD compliant.
Is Xero Making Tax Digital Complaint?
Xero has specifically created new features that are designed with you in mind to ensure that the Making Tax Digital implementation is as easy and pain-free as possible. These new features are available in every package that Xero has to offer – at no extra cost. This is why we recommend Xero as the most suitable option when you’re considering ‘Making Tax Digital’ compatible software.
Xero and Making Tax Digital
Since Xero has been working closely with HMRC over the last three years, they have recently implemented their MTD for VAT solution to assist businesses with becoming HMRC Making Tax Digital compliant and to support them through this changeover. Xero has worked hard to produce a new VAT process that works in line with the MTD policy – just what every business needs!
The new VAT Solution includes:
- Additional reports
- VAT outlines
- The means to post VAT adjustments
- The ability to submit in real-time to HMRC
Xero software has been specially designed to make the move towards Making Tax Digital for VAT as effortless as possible. Xero not only caters to your invoicing, payroll, billing, and expenses needs, but it can also implement your online VAT processing system.
Xero has even put together a free training course for anyone who feels they require a walkthrough of the MTD journey, so they have everything needed to become an expert in MTD for VAT compliance!
Here at Kirkwood Wilson Accountants, we recommend Xero as our number 1 choice for Making Tax Digital compliant software.
For more information about our digital accounting services, or for a Making Tax Digital consultation, contact Kirkwood Wilson today. Call 01704 546 000 or email enquiries@kirkwoodwilson.co.uk.