Making Tax Digital (MTD) is knocking at the door for businesses across the UK. If you need to get a handle on what these VAT changes are and what they mean, see our introduction blog to MTD.
As a bookkeeper, accountant or business adviser you will no doubt be aware of the changes coming for both yourself and your clients.
Some clients will be ahead of the pack on this and many more will need a push. We know from our own Reckon Cloud Adviser partners that many businesses are behind the curve, though those using a solution such as Reckon One are easy to manage as MTD functionality is enabled automatically.
The story here goes beyond mere compliance though, as there are many ways you and your clients can benefit from the digital switch that has been triggered by MTD. Communicating these positive upsides to your clients will be greatly beneficial.
1) Business health visibility
With MTD requiring digital records to be maintained, your client’s finances will become visible and accessible throughout the year. No longer will your clients have to wait for year’s end to see their accounts as they can log into a cloud accounting system to view ‘live’ data.
The benefits here are manifest – being able to make timely decisions, have access to a live ‘net position’ calculation and better predict cash flow and tax liabilities will allow a business to take better control and will have many advantages in terms of growth and profitability.
2) Smarter, less hassle
The new MTD system will also become less burdensome.. Systems such as Reckon One can automate much of the data entry processing using bank feeds, recurring transactions and integrations with abroad range of 3rd party apps. By drawing information from banks and integrated systems the burden on clients is eased.
Furthermore, businesses will see less workload associated with submitting VAT information. Mostly we will see verification that pre-filled data is correct, rather than providing a full report, meaning that submitting VAT returns using MTD will be more painless.
3) Fewer mistakes
Submitting VAT returns manually, especially when not using purpose made software, is fraught with the potential for error. Any small mistake, say at the beginning of the year, will snowball throughout the year and result in a potentially massive error at the end.
With quarterly, digital submission however, mistakes will be picked up on much sooner, avoiding unpaid taxes, tax disputes and any hassle associated with tax errors when dealing with the HMRC.
4) Cloud accounting benefits
For many small businesses, the very step of upgrading from paper processes or excel sheets will bring enormous benefit.
MTD is a real trigger for businesses to go digital, and those that have not had the pleasure of using cloud accounting software such as Reckon One will reap a multitude of time savers and business boosting advantages.
Not only will cloud accounting apps make MTD itself a hassle free experience with bank feeds and integrated modules, they will also be getting:
- Centralised data
- Anywhere, anytime functionality
- Invoicing and quotation management
- Direct banking links
- Reporting and predicting abilities
- Cloud Advisers like yourself can be granted access for hands off accounting
Furthermore, mistakes will be a rare occurrence and many task are automated or semi-automated to make all of your client’s accounting tasks that much simpler.