If you're still relying on paper records and submitting just one tax return a year, you're leaving yourself, not to mention your clients, open to mistakes. And these errors come with hidden costs. In fact, HMRC estimates that avoidable taxpayer mistakes cost the UK £8 billion each year.
What looks like a simple mistake in your client’s ledger can mount to a major discrepancy, making reconciliation a nightmare for you and jeopardising your client relationship. But there’s a simple way by which you can prevent these errors and take on more clients without increasing your headcount.
By adopting cloud technology and real-time accounting software, you can spot issues as they happen and correct them at the source. No more waiting until year-end to discover something’s gone wrong. With real-time data, you’ll help your clients with accurate tax planning, tighter financial oversight, and stronger support.
In this blog, we explore how Making Tax Digital (MTD) bookkeeping can help you future-proof your practice and deliver even more value to the clients you work with.
What is Making Tax Digital?
What is Making Tax Digital?
MTD is HMRC’s effort to make the tax system completely digitised and trackable.
HMRC’s goal is to become one of the most digitally advanced tax authorities in the world.
That means moving away from outdated paper processes and one-off annual submissions and shifting towards real-time, digital record keeping.
MTD is changing the tax system to make it more efficient, accurate, and ultimately easier for you and your clients to stay compliant and avoid costly errors.
How does MTD benefit you?
How does MTD benefit you?
How does MTD benefit you?
HMRC’s push to bring tax into the digital age is already changing the way you manage client records, but it’s also an opportunity you can use to your advantage.
Technological advancement
As a bookkeeper, MTD isn’t just a compliance task; it’s your chance to embrace smarter, more efficient ways of working. With MTD requiring digital reporting on a more regular basis, your clients will require MTD-compliant software that provides real-time capabilities. This is where advanced tools like AP automation software become invaluable.
By automating accounts payable processes, you can take care of digital record-keeping for your clients with ease. No more chasing paperwork or manually entering invoice data because automated AP handles that for you. You’ll gain real-time financial insights and full visibility into your clients’ cash flow and spending. This puts you in a stronger position to support them with timely advice and better financial oversight.
Take TCS Guernsey, for example. They adopted AP automation to easily track stock price increases and monitor supplier price changes, even on 10-page invoices with hundreds of line items for their clients.
Winning more clients
When you automate the repetitive and time-consuming manual tasks that eat up your day, you free more time and resources to focus on growing your client base and deepening your relationships with existing clients.
Right now, there’s a huge pool of businesses that need guidance, tools, and expertise to make the shift to digital record-keeping and stay compliant with MTD. With quarterly digital reporting now a requirement, your clients need consistent, up-to-date financial data to remain on track, and they’re relying on you to help them do it.
The most efficient way to deliver that level of service is by using bookkeeping automation. Not only does this ensure full compliance with MTD, but it also positions you to offer more tailored advisory services backed by accurate insights. It’s a smarter, more scalable way to work, and it helps you stand out as a proactive, strategic partner in your clients’ success.
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How Can You Provide More Value-Added Service Through MTD?
How Can You Provide More Value-Added Service Through MTD?
MTD bookkeeping isn’t just a client-growing strategy. When you can go beyond basic bookkeeping and offer services that truly add value to your clients, you position yourself as a trusted advisor. Here are 3 ways you can provide more value-added services to your clients through MTD.
Digital record-keeping
With MTD now requiring digital record-keeping, automated AP ensures that invoices are captured accurately and instantly. You give them peace of mind, knowing that every invoice, receipt, and payment detail is securely stored in one central, searchable platform.
Each invoice comes with a complete digital audit trail, which not only ensures compliance with MTD and VAT regulations but also significantly reduces the risk of errors or discrepancies during tax time.
You’ll have instant visibility into the status of every invoice, whether it’s pending, approved, or paid, so nothing slips through the cracks. And when auditors come calling, your clients can grant secure access, allowing them to filter and retrieve the exact records they need without digging through paperwork.
Tax Rates Accuracy
Managing VAT accurately is a key part of staying compliant with MTD, and with AP automation, you can take control of this process with ease. You can set Default Tax Rates for your clients at the account or supplier level, ensuring VAT is automatically applied correctly as invoices are processed. This removes the need for manual intervention and reduces the chance of human error.
For clients who require, you can configure tax rates to automatically override and gross up the net amount of an invoice, keeping everything aligned with MTD requirements. VAT codes from your automation software sync directly with your clients’ accounting platforms, which means tax data remains consistent and accurate across all systems. With every invoice correctly coded from the start, VAT returns become quick, straightforward, and stress-free, transforming what used to be a time-consuming reconciliation task into a smooth, automated workflow.
Final Thoughts
You can tap into the MTD market by taking steps towards your digital journey. Take the time now to review your current AP solution and choose an AP automation provider who meets your needs and objectives. The more work automation software takes on for you & your clients, the more time you give back to your clients to grow their businesses.
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