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If you are among the businesses owners, who conduct their operation using traditional materials such as report cards and spreadsheets it is time you consider upgrading to a digital system. The introduction of a Making Digital Tax System for handling all taxation affairs requires every business to maintain all accounting records in a digital form. Even if you already have digital software for recording and processing accounting transactions you need to ensure that you meet all the minimum standard requirements.
Here are some essential factors you should consider when choosing a Making Tax Digital Software:
HMRC does not have its own MTD software but it is outsourcing to an accounting software developer who will integrate it into HMRC’s systems. HMRC Making Tax Digital scheme is not only about compliance but is also about streamlining the process. The software will allow businesses to submit their accounting information directly to the HMRC system in real time, therefore, reducing errors and incomplete information.
Easy to use
There are many types of software out there that any business can use to process its accounting transaction, however, every software is different depending on the developer and intended purpose. It is essential that you choose the right one for your businesses needs. The software should be easy to understand, used to avoid errors when making entries and avoid wasting too much time as your employees try to understand it. Why not compare a few different options to ensure you choose a system that ultimately suits your business and is comfortable for your employees to operate.
Ensure that you chose software that is compatible with your hardware, operating system and databases. The software that you end up choosing may have been developed to only work with specific systems and hardware. If you do not know much about businesses systems and compatibility you can consider hiring a professional who can help you out. Ensure that the expert you hire is not only familiar with the information systems but also has knowledge in accounting matters.
While the main objective of getting new software might be for maintaining tax information, it is highly recommended that you chose software that can serve other purposes too such as generating payrolls and accounting records. A multipurpose system can also be used to automate some transactions such as sending reminders to debtors, asset management and sending notifications to various departments.
With most businesses upgrading to digital platforms, security is a major concern that should not be ignored. Be mindful of scams that could interfere with businesses operations. Ensure that your physical systems such as databases, computers and other physical accessories are secure and are only accessible by authorised personnel only. You should also ensure that your virtual information is well secured by monitoring employee accessibility as well as installing a firewall to keep hackers out.
Scalability and ease of updating
Your business is a growing entity and may grow to an unimaginable scale in the next few years. You should ensure that you install software that can be scaled as your business grows. The software should also be easy to update to accommodate other changing business features such as new taxation policies.
The right system should help you streamline your businesses processes and also adhere to the new taxation regulations.