Making Tax Digital (MTD) represents a key step by HM Revenue & Customs (HMRC) to digitising the tax system – enhancing efficiency, reducing non-payment and underreporting, and making filing easier.
Its aim is to help business owners reduce avoidable tax errors that may result from traditional accounting methods, such as manual books and inaccurate records.
However, one of the issues that many SMEs come up against – particularly, in our experience, is changing the use of long-held accounting methods – and now have the need for MTD-compliant software.
What happens, then, when a business doesn’t have this in place? We can tell you, but we find it is more effective to show you with an example.
Through the lens: A business’ perspective
Meet Jane Doe and ABC Accountancy, the firm she founded more than 30 years ago which holds tight-knit relationships with clients.
Jane has successfully adopted cloud accounting software and migrated many of her clients over to it, accelerated by the introduction of MTD for VAT.
However, one client, a long-established company, has resisted the transition and continues to use traditional accounting methods.
While Jane’s client has moved away from paper records, financial information is kept on spreadsheets and the client has no way of submitting their VAT returns without a compatible software.
Prior to partnering with Summa Tech, Jane and ABC Accountancy have two options with regards to this client – waste hours on repetitive data migration or fail to submit a compliant VAT return.
Now let’s look at what happens when Jane decides to approach our team for support in making her client’s VAT returns more efficient and at a lower risk of investigation or penalties.
The Summa Tech approach
Jane isn’t alone in her predicament.
While cloud accountancy software has been adopted by the majority of practices and business clients, some clients with long-established traditional accounting methods are less than happy to make the switch.
Others might not be unable to, whether due to the cost of investing in a full cloud suite or the size or nature of the business.
Whatever the reason behind situations facing accountants like Jane, MTD for VAT can often be a headache that firms could do without if clients lack compatible software.
To address this issue, we have created our specialist bridging software to ensure a smooth transition from server to spreadsheet to MTD portal.
Our bridging software is designed to make the transition smoother – including easy import of data from spreadsheets and other non-compliant records it is also able to be branded for Jane allowing the great client experience to continue.
Beyond easy collation of essential data, our software also offers a range of other benefits typically delivered to business clients through cloud accounting solutions and integrations, including:
- Automation – We can help you and your clients to automate repetitive tasks such as data entry, which helps you reduce errors and save a significant amount of time.
- Cost-efficiency – Our bridging software is a more affordable solution for businesses that aren’t able to make the investment into a full cloud solution.
- Security – Our solution keeps your financial data secure.
Returning to the client…
How does Jane’s client benefit here?
Initially, the client is able to hold on to their preferred method of record-keeping and accounting, reducing the disruption that can be caused by adopting new working processes.
This is likely to enhance the client’s relationship with Jane and her team by working in a way that works for everyone involved.
Beyond this solution, the client avoids potentially significant financial penalties associated with non-compliance with VAT regulations.
They also retain cash flow by not having to invest in a suite of cloud software which might not suit their operations.
Finally, Jane faces far less stress over ensuring that her client remains compliant and provides accurate information to HMRC.
If this sounds familiar to you, then you can deliver the same results to your clients with our easily accessible, flexible solution designed to support busy accountancy firms.
Do you relate to Jane and her practice? Contact us to book a demo of our MTD bridging software today.