Which accounting system is right for me?
Just like GDPR, Maxing Tax Digital hasn’t been quite as difficult to embrace as initially imagined.
In reality, the majority of accounting systems were well prepared and updated their software to ensure compatibility prior to MTD beginning on the 1st of April 2019. Now that the new processes are in effect, if your company is VAT Registered and has a taxable turnover over the VAT threshold of of £85,000, you will need to use compatible software to submit your Self-Assessment tax return to HMRC.
There’s plenty of options to choose from but how can you ensure that you choose the right accounting system for your business? A good place to start would be to take a look at our previous blogs, ‘What your accounting system should do for you’ and ‘What do the MTD changes mean for you?’
How to choose the right system for you
From assisting you with invoicing, payroll, bookkeeping and keeping an eye on your cashflow, your accounting system should make even the number-phobes among us feel in control of our finances. Most systems offer a free or discounted trial period. This is enough time for you to get to grips with the system and see if it will be appropriate for your usage needs.
But be careful, transferring existing records to an online system can be time consuming. Perhaps run some trial data before merging everything across. Whilst a trial price is a great incentive, be sure to check out the full price of all the functions you need your software to perform.
As this is only the first phase of HMRC’s digital plans, don’t delay ensuring your system is ready for the future. The below accounting programmes appear to be the most used and are compatible with the new HMRC system. HMRC’s own website has an extended list of software providers.
Our pick of three of the best accounting platforms
Both Xero, Quickbooks and Kashflow share a lot of functions with mobile apps and plugins to other software providers for all round functionality. Items such as Payroll and plugins almost always carry an additional cost. Here’s what we like best about these three;
- Xero – Likely the best on the market in terms of accessibility. Not only is Xero’s interface easy to navigate but it’s packed full of useful reporting features. These allow you to see at a glance where your business is up to in terms of invoices both due and to pay. There’s also a high functioning app available on Apple and Android which is useful for on the go accounting.
- Quickbooks – Again, HMRC recognised as being suitable for digital VAT submission. Whilst a little more clunky than Xero, it’s also more customisable. In terms of managing cashflow, Quickbooks allows you to integrate payment processing with a direct debit function. Quickbooks is a better solution for larger businesses and has a decent desktop application.
- Kashflow – If you’re looking for a compatible system that has the functions of an accounting programme but feels a little more like a CRM in comparison to the above, then Kashflow is a good place to start. Keep track of customers and suppliers, easily create recurring invoices and have full visibility of reports. These can also be customised as needed.
Of course, there are plenty of other systems available and if you’re afraid to navigate away from your current then investigate bridging software. Alternatively, you might currently use spreadsheets. It is still acceptable to use these to calculate VAT return figures and then use an API or bridging software to transfer these figures into HMRC’s system.
If you need further advice on which accounting system would be suitable for you and your business, get in touch and we can make an introduction to someone within our trusted network who can help.
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