As you may know, HMRC is phasing in its landmark Making Tax Digital (MTD) regime, this will ultimately require taxpayers to move to a fully digital tax system.

The government’s aim is to encourage businesses to keep digital records and update HMRC quarterly for income tax. This was supposed to come into place this year but has been deferred.

However, it is worth getting used to maintaining all your financial transactions on digital accounting software rather than using paper or spreadsheets.

Why accounting software is useful for your business

If your business is well established, you will probably have set methods for keeping your financial records up to date. If the process you use is not digital, then you will need to make a major change when Making Tax Digital comes into force. You can start getting ready by moving to a cloud-based accounting software tool.

Here are some of the benefits of using a cloud-based accounting software:

• You can input details of all your suppliers and clients and if you need to generate invoices this can be done in minutes. You can even connect your bank feed to some software, so you can easily carry out reconciliation with invoices as money comes in or goes out.

• If it’s a cloud-based system, it means that your bookkeeper and accountant can access and review your financial transactions without having to view it on your computer. It saves you and them time when supporting you.

• Once the software is set up you can record all your income and expenditures in one place. This allows you to review real-time data which helps you to manage your cash flow.

• All reputable accounting software that is on the market today has good backup systems and is GDPR compliant, so you don’t have to worry about keeping supplier and customer data on your own computer.

It can be difficult to know which accounting software is best for your business, so to help you we have written some blogs about the most popular software solutions our clients use. It is worth talking to your bookkeeper and accountant as well to make sure that they are familiar with the accounting software that you decide to use.

There are numerous packages available and currently, we work with Xero, QuickBooks and FreeAgent amongst others.  Read our blogs to find out more about these or if you need more advice please do contact us by calling 01623 490 120 or email This email address is being protected from spambots. You need JavaScript enabled to view it..