How can cloud accounting help my business?

Cloud accounting software is revolutionising business through the use of real-time accounting information, streamlined efficiency and the ability to have remote access to all of the information you need.

Through the use of cloud accounting software, you can have all of your information in one place, with data that is automatically backed up, to ensure efficiency in your business.

Analysing the performance of your business doesn’t have to be difficult. Cloud accounting software makes financial information more accessible, allowing you to review your profitability and make informed decisions to develop your business.

The ability to have remote access to data through software is particularly beneficial. Should you experience any issues with weather, such as flooding, causing problems for staff members getting to work, or in cases where a pandemic may represent issues such as self-isolation, staff can securely access the company’s data from anywhere.

There may be areas in which you can save, and the integration of cloud accounting software will ensure that reviewing these costs regularly is simple, to allow you to maximise your profitability. The software can help with budgeting as well, with the ability to implement controls to stay on top of spending being key features of many applications, such as Xero, QuickBooks and Sage.

The benefits of cloud accounting include:

  • You have a clear overview of your current financial position, in real-time.
  • Multi-user access makes it easy to collaborate online with your team and advisors, with all financial information stored in one central location that can be worked on by multiple people at any one time.
  • The software is automatically updated, saving time and enhancing security.
  • Everything is run online, so there’s nothing to install and everything is backed up automatically. Updates are free and automatically installed.
  • Upfront business costs are reduced – version upgrades, maintenance, system administration costs and server failures are no longer issues. Instead, they are managed by the cloud service provider.

Making Tax Digital changes

The Government’s Making Tax Digital (MTD) regime has been in place for almost a year, with further changes to the system set to come into force in April 2021. An increasing number of businesses are now looking at integrating cloud accounting and business software to help them get to grips with managing their tax and financial information online.

If your business is VAT-registered and has a turnover of more than £85,000, you are required to use this software to send quarterly digital reports to the Revenue for VAT purposes (since April 2019).

Originally, other forms of taxation, such as Income Tax and Corporation Tax, were meant to follow on from the requirements for VAT April 2020 at the earliest. However, following the 2019 Spring Statement, the Government included an amendment in a Written Ministerial Statement, which confirmed that MTD for other forms of tax would be delayed until April 2021 at the earliest.

MTD for VAT will still not be applicable for VAT-registered businesses with a turnover below the £85,000 threshold, but the Government has confirmed that April 2020 will mark the end of the ‘soft-landing’ period for MTD.

Penalties for late filings have been suspended since the introduction of the digital tax regime last year, but this will come to an end in April 2020.

As a result, penalties for late MTD filing will now work on a cumulative basis over a 12-month rolling period, with potential penalties rising as high as 15 per cent of the VAT due.

How can apps help me and my business?

Cloud accounting technology has significantly changed the way we work. Xero, for example, suggests that cloud accounting can save business owners up to “three hours a day” on resource-intensive record-keeping and administrative tasks.

Receipt Bank, for example, is an add-on app that is designed to simplify the processing of receipts. The app works on any smart device, and all you need to do is simply take a photo of a receipt, with the app then translating this into workable data.

Once the data has been processed, it can be extracted and stored in secure cloud storage and shared with accounting software such as Xero, or shared with your accountant.

How can McGills help?

If you need help with cloud accounting, look no further. At McGills, our team can help you choose the right cloud accounting package to suit your business.

For more information, contact our expert team today.