As a modern accounting firm it’s likely you’re under pressure to regularly alter your practices in order to keep up with your competition. If you’re still relying on traditional manual methods of managing your clients’ accounts this could be a time consuming and potentially expensive undertaking. However, if you embrace web based accounting software it’s possible you could ensure you keep up with your rivals while simultaneously future proofing your business.
We’ve explored six ways cloud accounting software could future proof your accounts firm, from protecting against ever-changing legislation to ensuring you’re always providing value for money for your clients.
General Data Protection Regulation compliance
The General Data Protection Regulation (GDPR) is a new piece of legislation created by the European Union in a bid to bring data laws in line with the new and increasingly diverse ways the world is using personal data. The previous data laws have been based around the Data Protection Act 1998 but the European Parliament argues this and other laws are now out of date, allowing companies to make use of people’s data without facing tough penalties for misuse or non-compliance.
As of 25th May 2018, GDPR will replace these antiquated laws, ensuring all European countries are subject to updated data laws that protect those who find their data in the hands of businesses. While this news is positive for the public, it does mean hundreds of thousands of companies will now be required to update their data processes to ensure they’re compliant.
For the accounting industry, this means updating a number of processes to ensure compliance, from the analysis of tax data to the management of payroll information and the handling of invoice information. Thankfully, cloud accounting software such as the tools offered by Capium are capable of handling this process on your behalf. Specifically, web based accounting software can be regularly updated by its creators to ensure it’s always in line with current legislation, so you can rest assured your clients’ data is always handled within the necessary legal boundaries.
Speaking of compliance, it won’t just be GDPR that’s hanging over your business operations in the coming years. Compliance is a crucial part of every aspect of your business, including data handling, health and safety, and even pensions. For example, in the UK it’s now illegal for employers to fail to place their employees into a pension scheme and to fail to contribute to this scheme. Under the Pensions Act 2008, automatic enrolment applies to any employer who has staff members earning more than £10,000 per year, and as such it’s likely you’re required to ensure the automatic enrolment of your accountancy staff members.
This type of compliance can be handled using accounting software, including Capium’s accounting tools. This real-time software can be used to help you set yourself deadlines, such as to enrol your employees, so you do not forget to meet your responsibilities. This type of online accounting software also makes it simple for you to manage the payroll of your staff members, as well as the staff members of your clients, so you can ensure all pensions and tax contributions are delivered to the government as necessary.
Formatting in iXBRL
Inline XBRL (iXBRL) is a type of formatting that applies computer-readable tags to business and finance data without leaving a visible mark on the information. According to the government this type of tagging makes it easier for many of their departments to process data automatically, saving time for them and those waiting on the results of the operation.
Two of the departments that rely on iXBRL include HM Revenue & Customs (HMRC) and Companies House, both of which handle significant amounts of data from thousands of companies throughout the year, and particularly at the end of the financial year. It would be impossible for businesses to apply this tagging manually – it requires specific software to ensure it’s integrated into the data accurately and successfully – so cloud accounting software can be used to apply the relevant iXBRL tags at the click of a button.
It’s not difficult to see the benefits of this technology, but when it comes to future proofing your business, this type of tool could be an invaluable method of ensuring efficiency. While iXBRL and tagging in general is likely to continue developing as business changes, the ability of developers to regularly update web based accounting software means you and your clients will always comply with the demands of government departments, with little or no cost to your business.
Sharing accounting updates
The ability of businesses and the public alike to make contact within a matter of seconds means demands and expectations are changing. While accounting clients may have previously expected news from their accountant infrequently, they’re now more likely to demand weekly or even daily contact. This works both ways, of course, and it’s more acceptable for accounting firms to expect their clients to reply to data requests within days or hours, while before it could take days for documents to be posted.
This change it demands could seem daunting, but thankfully modern accounting software makes the process of sharing between business and client simple. No matter where you or your clients are located, transfer data in a click of a button and manage responses and comments in one place. This allows your practice to provide an efficient service to your clients and it allows you to prepare your business for even higher demands thanks to the regular updating of accounting software in line with the demands modern clients.
Making Tax digital
Making Tax Digital is a government scheme that aims to transform the tax system by 2020 through the embracing of digitalisation. According to government guidance, there are too many compliant businesses facing unnecessary fines due to an overly complex tax process, and Making Tax Digital is set to tackle this problem.
While this is expected to be a relatively positive step forward for most medium sized businesses, accountancy firms will be left with the responsibility of meeting the new requirements of the scheme. If you and your team rely on traditional accountancy practices, this could mean a complete overhaul of your processes. However, if you embrace web based accounting software you could find this process delivers nothing but positive results for you and your clients.
For example, with software such as Capium’s accounting tools changes including those required by the Making Tax Digital campaign will be automatically integrated into the system by the developers. As a result, you can avoid the costly and timely process of making manual changes to a traditional system, and instead benefit from immediate compliance and easy integration of the new rules into your operations.
Streamlining your practice
One of the most obvious and immediate benefits of using online accounting software is the streamlining of accounting processes. There is a huge variety of web based accounting tools now available for modern accounting firms, many of which have integrated streamlining features directly into their services.
In fact, most modern software is specifically designed to make accounting easier and faster for you and your clients, transforming tedious manual tasks into automatic processes that can save you time and money.
One of the greatest benefits made available through online accounting software is the ability to amalgamate bank feeds, providing you and your staff with real-time invoice, payroll and bookkeeping details to prevent delays during the accounts process.
Additionally, online accounts production software removes the complications associated with submitting your clients’ accounts to organisations such as HMRC and Companies House. This is made possible through the application of iXBRL formatting at the click of a button, the automatic proofing of documents through the error-checking tools, and the easy submission process that sends client documents to the relevant institution in seconds.
To find out more about how Capium’s range of web based accounts production software could future proof your accountancy firm, please call our support line on 020 3322 5578 or visit our website to book a demo.