Cloud Accounting is a Way for Modern Businesses to Stay MTD Compliant
The fast-paced transition towards a digitalised future and the upcoming ‘Making Tax Digital’ (MTD) initiative is changing the way we do business. To embrace the change and upkeep with HM Revenues & Customs (HMRC)’’s guidelines regarding MTD, modern businesses are rapidly adopting the practice of cloud accounting. Harnessing the digital technology, companies can remain on top of their business with access to real-time information, anytime and anywhere. It is safe, it is affordable and it helps you comply with MTD!
Discussed here are the key advantages of cloud computing and how it is the simplest way to stay MTD compliant.
1. Get Real-Time Data, Anytime, Anywhere
HMRC’s MTD will be powered by advanced cloud accounting software, providing instant access to business-critical data in real time. All financial information and bank transactions will automatically flow into your business’s digital tax account. This will let you keep on top of all your income, expenditures, profits and loss. The online system enables you to access such data anytime and from anywhere, right on your device.
This gives you a complete overview of your company’s financial position, empowering you to take smarter and quicker business decisions. This is different from filing tax return online and is much broader in scope.
2. Improved Accuracy
Considering the complexities of record-keeping and filing tax return in paper form, inefficiencies and errors creep into the process, leading to billions of dollars of tax loss every year. However, cloud accounting system that is compliant with MTD makes it relatively easier to input real-time records, bank feeds and other transactions into your digital account. All transaction data automatically flow into your ledger, making bookkeeping and tax return filing simpler and quicker.
This helps eliminate avoidable errors and discrepancies, and improve accuracy levels in tax management.
3. Time Saving
MTD-compliant cloud accounting systems will allow you to digitally upload all your ‘bank feeds’ and other transaction data right into your digital account. You do not have to rely on paper receipts, invoices or bank statements. You can also use software with OCR technology that allows you to scan receipts and upload the same into your account automatically. With all these features, your time spent on recordkeeping will be reduced dramatically.
4. Cost Savings
If you choose MTD-compliant cloud accounting software, rest assured that there are no upfront license fees, expensive upgrades or initial setup cost. You do not have to worry about the downtime in installing and integrating new software or upgrading the existing one to ensure it complies with MTD. Cloud software installs and updates live, and all your data are saved in the Cloud. This means you do not have to spend additional money in getting data backups.
With MTD and cloud accounting solution, you can now run your business and keep a tap on your accounts and tax filing remotely from any device that has internet connectivity.
Seek expert guidance of an experienced tax consultant or accountant to know how cloud accounting can help you comply with MTD and make bookkeeping and tax filing seamless.