Although the Making Tax Digital (MTD) for Income Tax Self Assessment deadline has been pushed back to April 2026, there are umpteen benefits to digitising your tax processes now. Whether you’re currently using computer-based spreadsheets or pouring over paper files, going digital will significantly ease the load you’re carrying when running your business. It’s a win-win.
It sets your business up for success
Before MTD for VAT was introduced, we strongly encouraged our clients to go digital. We live in a world that’s increasingly embracing technology, and doing the same will ensure your business is ready to compete in this digital landscape. In fact, a collaborative study by eight international universities in 2022 showed that SMEs who adopt digital accounting systems are far more likely to succeed than those who don’t.
Clarity is fundamental to business success. It’s what helps you make those big business decisions that bring you closer to achieving your goals. We won’t pretend the path to success is always straight, but understanding exactly how your business is performing puts you in a much better position to deal with any challenges that come your way.
Digital programmes like Xero give far greater visibility of what’s going on in your business, so you know what’s coming into and out of your accounts, down to the pound. Being able to access up-to-date financial figures gives you a daily handle on your current business performance that just isn’t possible on desktop spreadsheets or paper.
It boosts your team’s productivity
Making your accounting records digital will bring productivity benefits from day one. It frees up your team’s time, as they can access records easily and immediately from any location. Digitising your accounts also lets you collaborate with your staff, business partner or accountant to input data, track finances and organise payroll. They can support you remotely, instead of you or your team having to go at it alone with the one set of records. You and your staff will have more time to spend on the things that really matter.
It makes more cash available
Going digital with your accounting will boost the amount of cash you have available for your business. How? Three words: get paid quicker. Online systems like Xero generate invoices in just a few clicks. Less time spent exporting spreadsheet data and drawing up manual invoices means you’ll be paid faster. Keeping everything online creates clear timelines, so you can clearly track when to expect cash in your accounts. It is also super easy to set up multiple payment methods to make it easier – and quicker – for your customers to pay you.
Getting set up on digital systems also makes it far easier to identify areas where you can make easy wins and save cash. Xero is designed specifically for small businesses managing their finances, and a clear breakdown of your performance makes it easy to see where you can implement small changes to make marginal gains.
The cloud gives freedom, security and peace of mind
Away from your usual setup? Going digital lets you access your financial data from anywhere, at any time. You aren’t restricted to being in any one physical location with your files. You have a busy schedule, you’re juggling a lot, and cloud software means you can check your accounts in the office, at home, or even on the school run. The Starfish team are mostly working mums, and we know first-hand how going digital helps get your business to the point where it fits around your life, not the other way around!
Digital accounting software like Xero guarantees your data a high level of protection, which can’t be done with manual accounts. With paper files, you’re at risk of finding them damaged, misplaced or stolen. Xero takes data protection seriously, encrypting all information and implementing intrusion protection systems so it’s always secure. The software requires two-step authentication as standard, and anyone who has access to your data must be invited and approved by you, giving you full control.
It also gives total peace of mind that it’s secure from any dreaded tech problems around the corner. Whether your computer stops cooperating or there’s a spillage on your laptop, your financial records won’t be affected. Digitising your tax ensures your data is backed up in the cloud with triple-padlock security.
It makes tax season a breeze
“Tax season” and “relaxing” probably aren’t phrases you’re used to seeing in the same sentence, but going digital is an entrepreneur’s best friend come submission time. Forget the palaver of trawling through Excel to compile your tax figures. Digitising your accounts means that, when tax season rolls around, all the data you need is already set up and ready to be submitted.
It’s all done by clicking a few buttons, saving you the days or weeks it would take to do a manual return. All that’s left is then deciding how you’re going to spend that freed-up time!
It’s time to go digital
Converting your accounting to digital might seem like a big change, but it’s actually much quicker and easier than you think. Now’s the time to take that step to set your business up for long-term success. Fill out our form for a free, no-obligation consultation and let’s chat about how to put digital processes in place that take the load off your shoulders.