Why should your business move to a digital accounting platform?

Why switch to digital accounting webinar

Earlier this week we held the first in a series of webinars to help business owners understand why the switch to digital accounting will not just make running their business easier but could also save the business and their owners money.

The webinar, presented by Cem Soydaner, Associate at Charterhouse Accountants, introduced the concept of moving to a digital accounting platform and why it has been driven by the HMRC campaign “Making Tax Digital”. The webinar highlighted a number of reasons why this move is beneficial, not least that it could save your business money.

There were numerous questions raised during the session and we have detailed these below together with Cem’s answers to help you reach a decision:

Is there a turnover limit for cloud software’s?

A:  No, there is not a turnover limit. I will use the example of Xero whereby the limitation is on transactions not on turnover. The limitation is that roughly after 200,000 transitions per year the software begins to run slower. However, I can state that we have clients who have gone over this threshold so to speak and there Xero is functioning as normal.

Is my data secure?

A: Yes, for example Xero use Amazon servers which as I am sure you will all be aware of are one of the largest, most secure cloud platforms globally.

Can I access my data offline?

A: No. Being ‘in the cloud’ the systems requires an internet connection.

Is cloud accounting GDPR compliant?

A: Certainly with Xero, as I am sure is the case with all other platforms, they take their responsibilities under GDPR seriously. You can read about Xero’s compliance with GDPR in their GDPR Centre.

Can someone make a payment using my cloud software?

A: No, this is not possible. When open banking becomes truly open then payments through a cloud software will be possible however, these individuals will need to be authorised by you.

Can my data be sold?

A: No, you are the owner of your data.

How can the software help me become more aware of the tax I pay?

A: Having real time information on the cloud at all times allows you to be able to manage your finances/spending at the touch of a button.

Can it help me get paid on time?

A: Absolutely, there are many different methods in which cloud accounting can assist in getting you paid on time. This is achieved through automatic reminders and/or pay now buttons on your invoices.

Can it help me to check which expenses I can claim for?

A: No, that is what an accountant is for.

How would Charterhouse recommend which software platform to choose?

A: We recommend Xero as we are platinum partners on the software and our staff are accredited with the relevant training to support you in your business. Which Xero subscription you need can be discussed in our consultation. However, we do also work with all the other major digital platforms.

Should you always go with the platform your accountants recommends?

A: I would on the basis that you pay your accountant to advise you, if your accountant is advising you to use a certain software then that is because they have the most knowledge on that specific software to again be able to advise you proactively in the future.

Is it necessary to keep paper copies of accounts and receipts as well and if so how long do I need to keep them?

A: If you are using your digital platform along with apps such as Receipt Bank or Hubdoc then once your invoice is scanned onto the system there is no need to keep hold of the invoice as HMRC approved the cloud records keeping of invoices. You will still need to keep hold of historical invoices which are not on the cloud for up to 7 years.

Will Charterhouse help with the training on how to use the software and if so, how much would it cost?

A: Yes, Charterhouse can offer a training session to you on your own data or on a demo client. This costs £200+VAT and £150+VAT for the setup of your Xero which will include but is not limited to setting up invoice templates, Chart of accounts, bank feeds etc.

Can I migrate my information from one system to another easily?

A: Yes, we can transfer up to 2 years’ worth of data from your old software which is included in the setup cost of £150+VAT. Should you require more than the 2 years historical data then a fee quote will be provided separately for this.

This switch to digital accounting webinar was the first in a series of three and the next two sessions, being run in Jan and Feb 2021 will go into more detail of specific areas around managing invoicing and cash flow.

To find out more information on the switch to digital accounting webinar series and when the next events will take place contact us or see our LinkedIn page.