Last year HMRC launched the Making Tax Digital incentive where they are requesting for submissions and returns to be made digitally by companies. The initial roll out affected VAT registered companies but eventually it will apply to all businesses of all sizes.
With this in mind I always ask clients to consider looking into accounting software to manage their business finances as in my opinion it is best to start the way you mean to go on.
Accounting software sounds far scarier than what it is. It is basically just an online platform where you can log all your invoices and expenses in all one place with some great additional features! There are so many out there to choose from to fit a variety of businesses and budgets so do your research and find the best one for you. We are partnered with Xero and Quickbooks and many clients use these well-known providers but there are lots out there.
So what are the benefits of using accounting software. Firstly, it keeps everything in one place. Most providers have great features where you can take photos of your receipts so not long have scrunched up bits of paper everywhere, you can send invoices directly to your clients and store their contact details so invoice tracking and recording payments is far easier.
Most providers also have the feature whereby you can connect your bank accounts so you can easily track money coming in and out and makes it really easy to match up your receipts making sure you are not missing any important evidence required by HMRC.
One of the great things about using accounting software is that it really makes you look at everything you are spending in the business and prompts you to look at your finances more regularly rather than leaving everything until the end of the tax year or financial year and then dealing with the panic to get all your information together.
One of the most common themes I see with those that are self-employed is the fear that sets in when it comes to completing a tax return. The great thing about keeping all your information digitally with accounting software is that a lot of the hard work is done for you. You can easily see the money which you have earned during the year and the costs split into categories making that all important final submission that little bit easier.
So for just a few pounds a month, why wouldn’t you invest in some technology to make running your business not only easier but better!
If you need help or support implementing your accounting software, please contact us about our training packages!