If you’re a British small business owner who wonders what to ask Santa for, the answer should be simple: a cloud-based UK accounting software subscription. It might not sound fun or glamorous, but if you run a UK-based company that hasn’t embraced cloud accounting yet, it’ll be much more practical than a pair of socks. In fact, it might just save your business from accounting mayhem.
Why switch to cloud-based UK accounting software?
2016 was a geopolitical roller coaster. The UK’s “Brexit” vote to leave the European Union last June has cast doubt on what the UK’s future relations with the EU will look like. It’s also unclear how possible post-Brexit regulations might impact accounting laws. But here’s the great news: Cloud-based UK accounting software can help you future-proof your company’s accounts.
Are post-Brexit doubts not a strong enough reason for you to research UK accounting software? Remember that 2017 is also the year when you’ll need to start preparing your business for the UK’s new digital tax system. You did remember that paper tax filings will soon go extinct…right?
In this article, we’ll explain why it’s more important than ever for British small businesses to use cloud-based UK accounting software. Read on to learn:
- How cloud-based UK accounting software can help your business manage post-Brexit changes;
- The big UK digital tax switch that you should also prepare for in 2017;
- How to start researching the best UK accounting software for your small business.
Brexit-proof your business
The Brexit vote’s result has thrown many for a loop. This includes small business owners who wonder how it might impact their accounting practices. But these unknowns can be overcome with the right cloud-based UK accounting software.
Native accounting clients are downloaded and installed, often with one-off payments. By contrast, cloud-based accounting software can be billed in increments and accessed on the go from any internet-connected device. These are two of several ways that cloud-based accounting software ensures peace of mind.
“In testing times, it’s even more important that business owners retain their focus on the fundamentals and have robust accounting processes in place that deliver meaningful information to the business owner at the click of a button – with the minimum amount of effort,” says Paul Bulpitt, UK Head of Accounting at Xero.
According to Bulpit:
“Accounting software – especially online accounting software – can help mitigate these changes in multiple ways:
- “If/when there are any regulatory changes, online accounting software will automatically make the updates, without you having to install any software or work out the impact of the changes for yourself;
- “Online accounting software can automate many accounting processes and deliver insights right to the mobile device of any business owner – allowing real-time collaboration with business advisers and access from anywhere;
- “The capability to check your live bank balance and cash transactions from within your online accounting software means that small businesses not only save time but, critically, get the benefit of complete, up-to-date visibility of cash. Cash is king and will help small businesses weather the storm.”
Prepare your tax system to go paperless
Brexit is far from next year’s only accounting question. HMRC’s Making Tax Digital initiative is another reason why cloud-based UK accounting software should be on your mind.
As of April 2016, all five million of the UK’s small businesses have access to their own digital tax accounts. HMRC’s goal is to digitize the country’s entire tax system by 2020.
HMRC aims to collect and provide data for every taxpayer in real time. This means you won’t need to wait until the end of each year to see how much your business owes. But you will need to digitally track and share your taxes with HMRC on a quarterly basis. The core goal of Making Tax Digital is to keep all tax information stored in one place – something that cloud-based UK accounting software shines at.
“In the short to medium term, small businesses will need to think about what Brexit means for them, and consider the impact on their strategy and future growth when making forward-looking disclosures,” advises Bobby Chadha, Senior Product Manager at Intuit UK. “Small business owners will need to follow the events closely to ensure they are aware of the impact that triggering Article 50 will have on financial reporting.
“However, one impending change that UK small businesses will need to start preparing for right now is the impact of Making Tax Digital, which will see HMRC digitize the tax system by 2020. This looks set to be a major change for all small businesses and accountants alike.
“Yet it’s important that they don’t panic. The new system will be implemented in stages from April 2018 to 2020, so they will have plenty of time to adapt to these changes and feel confident managing their finances and taxes online.”
Choose the right cloud accounting software
It’s hard to imagine how Brexit won’t have an impact on small business accounting. But even if it doesn’t, it’s important that you research cloud-based software in order to take your taxes to the digital side. UK accounting software such as Clear Books, Kashflow, and others can help you manage your finances on any internet-connected device. They also help you adapt to off-the-cuff changes.
You should keep several things in mind while shopping for UK accounting software. These include which features you need most for your small business, integrations with other business software, mobile capabilities, and more. Click the button below for a checklist to help you balance the books throughout Brexit and beyond.