To some businesses, accounting is seen as nothing more than an irritant.
It’s that thing you have to do every once in a while which means dropping ‘real work’ and instead burying your head in spreadsheets, invoices, and bank statements.
Yuck.
Despite this, implementing cloud accounting and keeping up-to-date with your bookkeeping can actually make your business more profitable.
Here’s why.
Reconciliation on tap
Regular bank reconciliation will help you make better business decisions and more easily keep on top of debtors.
Without cloud accounting, all of this is a lot more difficult and can be a real nuisance.
A lot can change in a few weeks, but with automated reconciliation and connections between your bank account and accounting software, you’ll only need to spend five minutes here and there to keep everything up-to-date.
Compare that against having to find dedicated time slots in which to spend hours record keeping and the benefits are obvious.
The Tax Man suddenly isn’t quite so scary
The Tax Man (whoever he is) gets a bit of a bad rap.
You work hard all year and your business produces a positive bottom line only for a massive chunk of it to be swallowed up my HMRC.
That’s their job, but you might be missing a trick. With regular record keeping and modern cloud accounting, your accountant can give you timely tax advice, and that could result in significant savings on your end of year corporation tax bill or self-assessment.
The alternative is to avoid regular record keeping and only find out the savings you could have made after the year end. And who wants to hear that kind of news?
Helping with MTD
Making Tax Digital (MTD) is a government initiative which aims to make it easier for businesses and individuals to keep on top of their tax affairs.
MTD is in place now and its compulsory for VAT-registered businesses which turn over £90,000 or more annually. Such businesses are expected to keep digital records and send digital VAT returns each year.
Can you do that without cloud accounting? No. But, thankfully, most modern cloud accounting software is MTD compliant.
It’s a two-birds-one-stone approach that enables better business planning while remaining compliant with HMRC’s new rules.
How can I update my accounts more often?
Despite the benefits above, you may still be scratching your head as to how on earth you can fit in accounting tasks among everything else you do each day.
There are three strategies for this which should work for you:
- Make it a regular item in your diary. You check your email each day, right? So why not make a sweep of your cloud accounting software a regular occurrence, too?
- Do it first thing. If your first task of the day is to eat a live frog, the rest of the day can only improve. That’s the thinking behind the ‘Eat That Frog’ principle, and one you can definitely apply to accounts – and the rest of your business.
- Ensure your bank account is set up with a live feed to your accounting software. The best cloud accounting platforms will link to your bank account so that transactions are automatically pulled in and reconciled.
Still not sure about the benefits of cloud accounting and up-to-date bookkeeping? Quiz our team on it – they’d love to help.
