You may be wondering how cloud accounting works because you have heard everyone going on and on about Making Tax Digital (MTD). You may be one of those business owners who had to register for MTD for VAT, because it became obligatory and now you feel overwhelmed not knowing how to comply with it.
Or you may be a sole trader who has to submit self-assessments to HMRC every year and now you have heard that MTD for Income Tax Self Assessment (ITSA) is delayed until April 2026. When you heard this you may have let out a big sigh of relief ! But why is that? Going digital is nothing to be scared about and here’s why!…
Or you may be a business owner running a limited company and you are worried knowing that HMRC will get to you eventually in the next few years making it obligatory for you too to go digital, as in full MTD for corporation tax. Again, why is that ? Going digital is nothing to be scared about and here’s why !… read on to find out how cloud accounting works and why you should not waste your time and energy worrying about it.
Why cloud accounting is good for your business
At LAS Accounting we have been prepared for MTD for quite some time. The main reason for this is because cloud accounting will take your business to a whole new level. It eradicates the need to hoard paperwork so you can clear out your glove box or wallet or that old shoe box you usually store all of your receipts in ! With the use of cloud technology such as Autoentry or Dext you can simply upload your receipts as you spend, to the mobile phone app, or straight to the cloud from your desktop or simply forward them to an email containing your invoice straight to your dedicated Autoentry or Dext email address. It’s really simple and easy to do and it also means you will never lose a receipt and have to pay HMRC more than you need to !
The essence of cloud accounting is that it enables efficient access to real time financial data anytime, anywhere, allowing you to have more flexibility in working in your business and helping you to make calculated and timely business decisions.
As the business landscape evolves, business practices also need to evolve in order to maximise new opportunities and mitigate new risks. The impact of technology on the way we do business is evident for all to see. Cloud accounting is changing the way businesses and accountants manage, maintain, access and gain useful insight from financial data.
Why cloud accounting ?
There are numerous benefits to using cloud accounting such as gaining back the time to focus on your business rather than on endless number chores.
Cloud accounting is great for a number of obvious reasons:
- Accessibility – you can use cloud-based software from any device with an internet connection, from your laptop, tablet or mobile phone, making it easier to manage your business anytime, anywhere.
- Accuracy – your financial data is processed by highly performant programs that leave little or no room for error, eliminating the risk of, manual re-keying of data and human error;
- Real time data – cloud accounting software make it possible to have access to real-time data to give you full visibility of your finances at any point in time. This will make it easier for you to keep on top of your business’ financial situation and make savvy business decisions;
- Secure– with cloud accounting, your data is secure and backed-up automatically ensuring that security and privacy is always airtight. All of your information is stored offsite which means it can no longer be adversely impacted by theft of a computer or any other physical factors. You invite users to access your data, and you control the level of access granted;
- Cloud ecosystem – with a whole ecosystem of apps and add-ons, cloud accounting software is scalable and can grow with your business. Industry and sector specific add-ons can be used to create a bespoke system to meet your business requirements, now and into the future;
- Enhanced business performance – technology led accounting platforms help your business operate at maximum efficiency, to allow you more time to spend on business critical tasks. This includes integrations with payment services to assist with cash collection, dynamic reporting solutions and dashboards to provide complete visibility of your financial position; and
- No hidden costs – no need to install upgrades or purchase new hardware. You pay for the software by monthly subscription. Automatic updates are free and instantly available.
- Collaboration – Having access to your accounts in real time and being able to collaborate with your accountant is important to allow you to make savvy business decisions and plan ahead for the future of your business.
How does digital accounting work ?
How cloud accounting works, or in other words, how digital accounting works, is not at all a scary tale of science-fictional doom.
By using Quickbooks and Autoentry together we have access to all your financial data allowing us to reconcile your accounts more effectively without having to ask you lots of questions. For example, we can extract the data within Quickbooks to produce insightful reports and forecast the future success of your business.
You are covering the steps that HMRC needs you to take in order to file your tax return, but you are also getting so much back from the investment you have made in your accountant. You can now see your business in a whole new light. You are not just logging your transactions, but you are actually planning ahead for the future, setting budgets, keeping an eye out on your spending, You can chase debt easier when it becomes overdue, so you are more likely to be paid on time, allowing you to keep your cash flow nice and healthy.
Quickbooks can integrate with payment methods such as GoCardless and Stripe. This makes it much easier for clients to pay you with the touch of a button, really no excuse for them not to pay you when it’s really that simple !
Once MTD comes into play you will already be compliant and the prospect of MTD for ITSA and MTD for business tax will no longer be daunting. You will already be a pro ! You will not only know how cloud accounting works, you will ride the tide with it !
How can LAS Accounting help you ?
Overall cloud accounting will save you time and money and with an accountant alongside you, you will get so much more out of your numbers. We’re here to support your growing business in any way we can so that you can achieve the success you have been working so hard for.
Now might be the ideal time to engage the services of an accountant to do all the work for you and provide you with all the advice you need to be on top of the numbers.
Don’t hesitate to get in touch for any further enquiries at: firstname.lastname@example.org