Keeping it digital

The postponement of Making Tax Digital (MTD) for income tax until April 2026 (and later for limited companies and partnerships) has been well publicised and subject to a vast amount of scrutiny. Whilst this temporary postponement may have been a welcome relief for those not yet keeping digital records, there are a number of advantages from transitioning to an online bookkeeping software system that could benefit your business in more ways than you might first think.

Time saver

In the majority of cases, bookkeeping without using online bookkeeping software is a very manual and repetitive process. Most online bookkeeping software systems utilise technologies to automate those time consuming, repetitive tasks, thus providing significant efficiency benefits whilst reducing inaccuracies through mitigating the issues of human error. For example, you can: set up automatic bank feeds which allow you to download all bank transactions; automatically process your supplier invoices; implement ‘rules’ for recurring entries; automate routine journal entries; and create sales invoices and statements of account for more efficient
cash collection.

User friendly

One of the most important benefits for business owners is that you do not need to be an accountant to use most online bookkeeping software. There is generally a short learning curve, and a lot of support from the provider is available as well as support from your accountant.

Monitor your performance

Manual bookkeeping, usually done once a year, can be a labour-intensive task involving the collation of data that is out-of-date. With continuous computerised bookkeeping you have the ability to run accurate, meaningful reports with real-time information, enabling you to accurately monitor the performance of your business at the click of a button. This enables you to make agile and proactive (as opposed to reactive) decision making.

Back it up

The majority of leading bookkeeping software providers are now using cloud-based systems, meaning that wherever you are, all you require is a device with internet access to be able to log on and access your data. This also enables your accountant to access your data at any time throughout the year to assist with any queries you may have and provide proactive.

Most leading bookkeeping software providers will also have a mobile app, meaning you can log on, upload documents and monitor financial performance on the go.

Digital storage

Paperwork, including receipts from retailers, can be scanned and stored within the software via an app, or PDF attachments received via email can simply be dragged into the system. Digitally stored records not only remove the need to store all of your paperwork in files and boxes, which take up valuable space and can easily be misplaced, but give you ease of access, so you can easily search for invoices on the software and view, reprint and resend if necessary. Digital record storage will save you time, space and money. This also has significant sustainability benefits, reducing the need for unnecessary printing and paper usage.

Many businesses have already transitioned to online bookkeeping software; however, they are possibly not fully utilising all of the benefits on offer. For example, bank feeds – connections that allow you to automatically import transactions from your bank directly into your bookkeeping software, ready for you to reconcile each day. This eliminates the need to manually post bank transactions (saving time) and reduces the risk of human error. Also, many businesses have multiple arms but do not accurately track the financial performance of each one. Utilising ‘departments’ within your bookkeeping software will enable you allocate each transaction to the relevant trade with ease. You would then have the ability to run departmental reports to show an individual profit and loss account for each one, a very valuable tool for assessing performance when making financial and business decisions.

If you would like to discuss any of the above in more detail or require assistance in selecting the right bookkeeping software for you and your business, RRL would be very happy to assist.

RRL
Peat House, Newham Road,
Truro TR1 2DP
01872 276116
post@rrlcornwall.co.uk
www.rrlcornwall.co.uk