What is Cloud Accounting?
You may have heard talk about cloud accounting, digital bookkeeping or MTD ready software but what does it all mean?
What is the Cloud?
First of all, let’s explain the cloud – the cloud is where your data is stored. Gone are the days of having all of your data saved on one computer. These days your information is saved on web servers that can be accessed from anywhere in the world. So long as you have internet access you can view, edit and save your data from any device in any location. This is great for business owners who are always on the go or abroad travelling.
Not only that but you can give access to others whether that be in the form of delegating to your staff or providing your accountant with access so they can help you throughout the year rather than only having input at the year end.
From a security point of view, all of the software we work with is GDPR compliant and most have bank level security so in reality it is generally more secure than a laptop that could be stolen or manual records that could be lost in a fire for example.
What is Making Tax Digital?
From 1 April 2019 HM Revenue and Customs is starting to roll out “Making Tax Digital (MTD)” which insists that all information is submitted to them via a digital link known as an API.
The initial phase of the roll out only applies to businesses who are VAT registered and above the VAT threshold. In effect it means that you would no-longer be able to log into the Government Gateway to submit your VAT returns. Instead they will need to be submitted via software that has been approved by HMRC. A list of these software can be found HERE
Manual records and old software such as Sage Desktop (pre v25) and Excel will no longer be accepted by HMRC under the new MTD rules. Bridging software can be used to convert excel records into the correct format to send to HMRC however, we have found that all of our clients have embraced the change to “MTD Ready” software thanks to it’s many benefits.
What are the benefits of cloud accounting?
There are many great benefits including; ease of access, automation, accuracy and tailored reporting not to mention the many apps that can be integrated.
The app market places are growing on a daily basis and consist of data capture, automated processing, payment channels, expenses, payroll, eCommerce and many many more. You can read about the main software we work with HERE
and find out more about other apps that may help your business run smoothly for Xero at apps.xero.com
and for QuickBooks Online at quickbooks.co.uk/apps
In a nutshell, cloud accounting, digital bookkeeping and MTD ready software all refer to you maintaining your records on software approved by HMRC. This doesn’t have to be a compliance burden – It can help to grow your business, ensuring the smooth running, accurate recording of data and up to date reporting.