Do I need bookkeeping apps for my business?

The short answer is – yes. At Timewise VA, we want to make keeping on top of business finances quicker, easier and less of a pain at year-end. We’re keen to share tips and tricks for saving money, using the best bookkeeping apps, saving time and growing a successful business (meaning that you can FINALLY get someone else to do ALL this for you!)

Plenty of small start-up businesses aren’t aware that there are bookkeeping apps out there. They create their invoices in Word, keep records of their income and expenditure on a spreadsheet, and spend goodness knows how long doing their self-assessments every year. This madness has to stop…and the Government is keen to do its bit to make it stop.

Making Tax Digital with the right bookkeeping apps

Making Tax Digital is part of the government’s tax administration strategy. By requiring businesses and individuals to enter their details for the year online, HMRC can help to reduce the tax gap. Probably not a problem that you were looking to solve anytime soon!

So what are the benefits of this new initiative?

  • It makes it easier to get your tax right every year. No recalculations or nasty surprises. Well, unless you count getting the calculation in the first place!
  • Enables businesses to integrate this with existing processes and other software to create easy, straightforward financial records
  • Improve the accuracy of your records, so you can easily understand how your business is performing, and where you need to boost investment or cut costs
  • Digital records are sent directly to HMRC – so you know that everything is submitted correctly and on time. No more faffing to fill in the form from scratch!

I’m VAT registered, does this apply to me?

Yes – it does. If you’re new to this, let us explain.

From April 2019, VAT registered businesses who had a taxable turnover in excess of £85,000 were required to comply with the new MTD for VAT requirements.

In April 2022, this changed to all VAT registered businesses, regardless of their annual turnover.

Although this is mandatory for businesses, the MTD registration is not automatic. Businesses still have to register themselves (if required) or alternatively appoint an agent to complete the process for them.

If you are not VAT registered, you are still required to follow compliance to MTD, whether that applies for your corporation tax, or if you are self employed. We had expected the full compliance to take effect in April 2020, however this is more than likely now to be April 2025.

Still, there is a huge benefit to getting prepared now, instead of waiting to be forced!

Which bookkeeping app should I choose?

We could write a whole blog on this (we probably will to be honest!) but given that there is a lot of choice out there, it’s worth starting with one and seeing how you get on. Your accountant or bookkeeper likely manages multiple platforms, however they all have their own preference.

Some bookkeeping apps are included in your business bank account benefits, so it’s worth checking that out first before you make a commitment. It’s best to have this conversation with a qualified accountant or bookkeeper who can also set it up for you and help you to navigate it independently.

Want our opinion? Drop us an email – enquiries@timewiseva.co.uk, complete a contact form or call us direct on 07789 383699. We’ll give your our own recommendation, as well as helping you to decide which package suits you, your business and your budget best.