The way we communicate with HMRC is going through a revolution.
From next month (April), VAT registered businesses, with a turnover in excess of the registration threshold, will be required to submit their VAT returns online through digital software, and by 2020/21 tax year other businesses may be required to use a fully digital based tax system to submit quarterly business information to HMRC.
This digital transformation, known as Making Tax Digital, has led to a number of cloud-based software solutions. With so much choice, how do you select the software that is right for your business?
Craig Robertson, associate in our Montrose office, reviews two market leaders: Free Agent and Quick Books:
Free Agent promises to be “Accounting software that sorts out the mess and the stress of managing business finances.” It is also 2018 winner of the Accounting Excellence Awards, small business accounting software of the year.
These are well-positioned claims, and are true of my experience of Free Agent. The company is owned by Royal Bank of Scotland, and the software is free to businesses that bank with RBS. It is very easy to use the system and is perfect for micro/small-sized businesses with few transactions and a limited purchase ledger.
This system works well for contractors, who may only raise a few sales invoices per month. Users have an easy means of tracking expenses, keeping tabs on their cash flow and are aware of expected tax liabilities.
Quick Books boasts to be “The world’s #1 online accounting software” and prides itself on “connecting the apps you love to expand your experience.” This is an accurate portrayal of my experience also. I would recommend Quick Books to small and medium sized businesses.
This software provides a comprehensive approach that can be built up depending on your business requirements, for example you can add a Quick Books Payroll feature, the system can keep track of stock in hand or it can be integrated with functional applications such as Go Cardless and Chaser to collect debts. The system can provide comprehensive management reports to assist with financial control and forecasting.
Both of these systems are very easy to use and will ensure your business is ready for the digital transformation. The software can be adapted to suit most business needs, and it is possible to use Quick Books for a high volume of transactions, or for a micro business to enjoy the depth of information available in Free Agent or Quick Books Self Employed Module. Both software packages can be used by sole trader businesses, partnerships, LLPs, and limited companies. My recommendations are based on my experience of finding the right solution for my client’s requirements.
With so many software options available to you any member of the MMGA team will be happy to give their informed opinion and help you get set up. Please get in touch if you have any queries.