You may have heard about Making Tax Digital, a UK government initiative to transform the tax system and make administration more efficient, effective, and easier for the taxpayer.
Self-employed businesses with annual income above £10,000 will need to follow the rules for MTD for Income Tax from their next accounting period starting on or after 6 April 2023.
To a business owner, the thought of going digital may seem terrifying. What happens to your shoebox of till receipts and dog eared invoices?
Spending hours (or days) sifting through paper documents is outdated and time consuming. In today’s climate, you need to free up as much valuable time as you can to spend working on your business rather than in it.
Today’s bookkeepers work smarter, but how did it all begin?
If you look back through history, you’ll find bookkeepers emerging whenever people bartered over goods. If Mr Smith gave Mr Brown a sheep and two chickens in exchange for a barrel of ale you can guarantee a bookkeeper was present to document the deal!
If Mr Brown later implied that he had only received one sheep and one chicken, the bookkeeper had the proof to dispel any grievances.
As the world evolved, and the exchange of currency became popular, bookkeepers were employed to keep more meticulous records. They began to record all transactions in a book with information about money paid and owed – single-entry bookkeeping.
It was the Italian monk Luca Pacioli who set the groundwork for modern accounting in the 15th century when he published a book in 1494 showing the benefits of a double-entry bookkeeping system. This led to the creation of a balance sheet of debits and credits, which meant bookkeeping became more efficient and offered a business owner a much clearer picture of their wealth.
As the world evolved, business owners recognised the importance of attracting investors and started to share the information the bookkeepers collated using balance sheets, cash flow and income statements. They provided the necessary proof that a business was making a profit.
Today’s bookkeepers use automated systems rather than single or double-entry cash books. They have progressed from the adding machine to life-changing software such as Xero, saving them time and effort.
How can you ditch the shoebox of receipts and go digital?
As the bookkeepers throughout history have advanced, believe me when I say that you can too! Making the switch from paper to digital is easier than you think.
Before you worry that your beloved shoebox will become redundant, allow me to assure you that it’s pretty impossible to eradicate every piece of paper in your office. Think of that as your comfort blanket – you’re welcome! However, reducing the sheer volume of paper will improve the efficiency and productivity of your business.
With the Xero accounting software, it’s easy to scan your digital documents and file away for when you need them. Of course, switching everything over to Xero can take time, which is why we support you and your team throughout the entire process of set-up and remain on hand to offer guidance until you’re confident with the transition.
Embrace Xero software
Are you ready to ditch the shoebox?
Let me help you leave the dog eared world of paper based accountancy behind and show you how to be more cost-effective, organised, and inspired. Switching to Xero software gives you the freedom and flexibility you deserve – don’t delay, switch today!
The Making Tax Digital initiative is a brilliant way of improving accounting for ourselves and future generations, so why not become part of the history lesson and go digital.
To find out more about Xero and how I can help support you and your business take advantage of my FREE consultation call (add LINK).