Yes that’s right we mentioned those three letters again! MTD. Just before Christmas you may have heard the announcement that Making Tax Digital (MTD) for Income Tax Self Assessments (ITSA) has been delayed until 2026. This may have been a relief to you, or you may not have understood what MTD really meant for your business and the prospect of change can be difficult to comprehend. However, using MTD compliant software for your bookkeeping has great benefits to your business. You don’t need to wait until MTD comes into play, you can make the change now to see the difference it can make to your business finances.
At Numberwork Services we’ve been using MTD compliant software for quite some time now. We’ve found that our clients bookkeeping is much more accurate when using cloud software but it is also critical to be consistent with your bookkeeping to ensure this accuracy. It also means that you, as a business owner, have access to your finances in real time allowing you to make important business decisions.
If you’re currently doing your bookkeeping on a spreadsheet then there is much more work involved than there would be using software. By using cloud accounting you can connect your bank feed to the software so that all the information is pulled through. No more having to search through bank statements to log every transaction, which means less chance of human error.
Are you still hoarding paperwork?
Keeping hard copies of receipts and invoices isn’t good for the environment and it’s also quite likely that those important receipts and invoices will go missing. Without that paperwork you can’t claim the expense through your business as you need evidence of every transaction which you claim as a tax deductible expense. We use Hubdoc or Autoentry for our clients. You can use the mobile app to snap a picture of your receipt as you spend so you never lose a receipt again. If you receive invoices direct to your inbox you can send it as a PDF attachment to your dedicated Hubdoc or Autoentry inbox. Hubdoc/Autoentry can then be connected to your accounting software so that all of your expenses are in one place ready for reconciliation.
More to the bookkeeping than just recording transactions
If you’re doing your bookkeeping yourself then you’re probably just making sure you’re covering the expectations from HMRC in order to file your self assessment. If you invest in the services of a bookkeeper who is fully digital then you will get a much better insight into the future of your business. We can use your bookkeeping data to produce reports to establish the profitability and sustainability of your business. We can talk you through these reports during our monthly meetings (depending on your bookkeeping package) and support you to set goals and review them each month or quarter, holding you accountable and keeping you on track.
You see, Making Tax Digital (MTD) is nothing to be worried about, it will actually be an advantage to your business, especially if you start getting prepared now.
Book a discovery call today to see how we can support your business.