Digital transformation is one of the most talked about priorities in business today. It can mean anything from creating new online products to cutting costs. But all agree that organisations must become more digitally focused to stay competitive.
Accountants vary widely in how 'digital' they are today. Does your practice still rely on paper filing systems and manual processes?
HMRC recognises the efficiency and accurate that digital records deliver. Under Making Tax Digital (MTD) we are already filing VAT returns online, and this time next year, we will all need to have digital links tracking VAT back to each individual transaction. The move is projected to save billions in lost taxes through errors and fraud.
Rule changes like these can seem an additional burden on an already busy practice. But it's much healthier to view MTD as an incentive to improve your processes and future-proof your firm.
Five reasons why it's good to go digital
Businesses in every sector are embracing technology solutions. Here's why:
1. Compliance
OK, MTD is a big reason in itself. Going digital is essential to meet the new rules. But for practices that already use the main accounting software platforms, there is little disruption. It's a question of understanding whether your provider is picking up all compliance or if you will need to make adjustments at your end.
2. Efficiency
Manual processes and paper filing is enormously inefficient – especially if you need to track something back or search for a piece of information. With an online system you can perform these checks in seconds. If you rely on paper records you'll be searching through files and relying on human involvement to find what you need.
3. Accuracy
An unfortunate truth is that as humans, we all make mistakes. The evolution of spreadsheets was a godsend to accountants in identifying anomalous data, and the move to more sophisticated digital solutions empowers us even further to identify errors. By going digital we can easily confirm that all records and files are accurate.
4. Transparency
The more we embrace digital tools in managing our work, the better visibility we have at the touch of a button. It's easy to look back at data from past years, compare performance and make predictions about the future. Performing the same tasks manually could take days or even weeks.
5. Crisis management
Have you ever considered the impact on your practice if something were to happen to your premises? How would you cope if all your filing was lost in a fire? Online accountancy packages store all your clients' details in the cloud, under impenetrable security. You can access the data you need at any time of day from any location. It's great peace of mind for a reputable company.
With any technological adoption, there's a steep learning curve and a certain amount of additional work involved. But with MTD already here, it makes sense to give it your full commitment to make sure that you're ahead of the competition – and ready for the future.