Why It’s Time to Check Your Bookkeeping Process
Making Tax Digital is a government initiative designed to make it easier for businesses and individuals to calculate and pay their taxes correctly. It’s compulsory to use an online software package that complies with Making Tax Digital. Key dates potentially affecting you and/or your business are:
- From April 2022, all VAT-registered businesses in the UK had to start using Making Tax Digital software to keep digital records and submit their VAT returns to HMRC.
- From April 2026 sole traders and landlords with income over £50,000 will need to file quarterly Income Tax Self Assessments (ITSA) using compatible software.
- From April 2027 those with income of over £30,000 will then need to comply with Marking Tax Digital.
If you’re a sole trader or landlord, now’s the time to get ahead with a software package.
Making Tax Digital and Bookkeeping Packages
The Hargreaves Owen is committed to ensuring all our clients are ready for Making Tax Digital when needed. Going beyond simply complying with legislation, we are helping clients get the best from HMRC-recognised accounting software. You’d be amazed at the speed and insight bookkeeping packages offer!
Many adverts claim a software package can save you eight hours each month. That’s a whole working day of time! However the benefits go beyond winning back time, offering:
- a professionally presented, consistent invoice format,
- convenient payment options to encourage quick transactions,
- automated chasing of outstanding amounts, and
- easy monitoring of monthly business performance and accounts.
All these aspects add credibility to your business. Crucially, your online bookkeeping package helps you stay in control of your cashflow; the life blood of your business.
There are so many packages available! Clients are often deterred by the set-up process, cost and training involved. Please be reassured – we can help with all these aspects.
Setting Up Accounting Software
Depending on how long your business has been operating, getting started with a package can take anywhere from five minutes to several hours. Free trails or reduced pricing for a few months are often available. Most packages offer monthly subscription fees to help spread the cost.
Step 1: The first step involves creating an account and providing details such as your business format and accounting year-end.
Step 2: Next, decide if you’d like your software to access your bank transactions. If so, you need to set up your bank feed. After entering your login credentials the software imports recent transactions, usually 90 days’ worth, and adds them to the bookkeeping entries. Banks have tightened up their security, so you need to jump through a couple of hoops to get connected. Alternatively, some packages allow you to import bank transactions via a csv file avoiding the need to link to your bank account. If you need help setting this up, please let us know.
Step 3: Would you like to let customers pay with credit cards? Some packages have an integral credit card system. If not, you need to sign up with a payment processor such as PayPal or Square. It’s a good idea to browse the accounting software’s settings. For example, do you plan to use specific features such as purchase orders and inventory tracking? You will need to create a contact record for each of your customers. Including details such as email addresses and contact names helps when emailing your invoices to them.
A Quick Start
A minimal setup provides an immediate way to create invoices, pay bills and accept payments. All the accounting packages let you add customers, suppliers, and products during the process of completing transactions. You must decide whether you want to spend the time upfront setting everything up or update your system along the way adding contacts, invoices and payments when you need to.
Which online accountancy package is right for you?
Start by considering what you need from the package. Some of the questions to think through are:
- Do you have a business bank account? If the answer is “no” we would suggest you set one up as this would allow you to use the bank feed option on any package.
- Do you raise sales invoices and would you like to email them to customers?
- If you are using Amazon and eBay does it integrate with the package?
- Do you have stock? If so, would you like to have a stock control option available?
- Will supplier invoices be put on the package or are payments to your suppliers coming directly from the bank feed when payment is made?
- Are you registered for VAT?
- Do you need a payroll function?
- Will you allow customers to pay by credit card? If you do already, who do you use and which packages integrate with the credit card provider?
- How much does the package cost? Are there any additional costs for other apps you need?
- How much support is offered and is your accountant familiar with the package?
- Is it cloud-based, and can you easily give your accountant access?
Now you have a clear picture of your requirements it’s time to find the best online bookkeeping package for you, choosing one that:
- offers the functions you need,
- is easy to use, and
- is priced reasonably.
A quicker, easier way forward!
To help choose the best option for you, our team has reviewed the most popular online bookkeeping and accountancy packages.
Look out for our next articles about Making Tax Digital and bookkeeping packages.
The first package we review is Kashflow. Our clients can access Kashflow with:
- free use for six months,
- system set up, and
- two hours of free training.
Are you keen to get started?
Rather than wait for our blogs, give us a call! We’re happy to discuss the options with you and help you get started. Discover the benefits of digital bookkeeping!