Whether you are an accountant yourself or a small business trying to manage the books, you may have heard of digital or cloud accounting already. The good news is that anyone can use paperless accounting, but you might find the idea of taking your accounts paper-free to be daunting.
Accountants and bookkeepers considering the prospect of moving clients to a new paperless accounts system might find the idea particularly overwhelming.
If you’re wondering whether moving to cloud-based bookkeeping is worth it, these are the benefits you can expect. We also look at ways to overcome some of the challenges accountants might encounter when moving clients to the cloud.
What are the benefits of cloud-based paperless accounting?
Cost, efficiency, and data security are three big boxes which cloud accounts software ticks. Paper, ink, scanning, filing… paper handling costs money; both paying for the actual resources themselves, and for the time involved.
It’s more efficient
One of the key benefits to paperless accounting is its sheer convenience. Dealing with digital records allows accountants and their clients to access bookkeeping records as they need to. More than one person can use the records at a time, and there’s certainly no waiting for documents to arrive in the post.
Accounting on the cloud also makes updating records much more straightforward. Rather than sifting through paperwork or generating more material for the stacks of un-filed filing, data can be recalled and organised without getting out of the seat. In some cases records can be updated automatically using built-in accounting tools such as Bank Feeds.
It’s not just the record entries, either. Receipts (and all the other scraps of paper clients send) can be photographed and uploaded to the cloud, and attached to the relevant record.
Data security is essential
One of the downsides to storing everything on paper is the risk it entails. The records aren’t backed-up in their organised format, so if data is stolen or lost to fire or flood, you’ll be left in the tricky position of trying to recover all your lost paperwork. Keeping your information in digital format allows you to recover it (providing you back it up of course).
And on the subject of data-theft; cloud-based servers are kept in highly secure locations, protected by all the industry-encryption standards you can think of. They’re often far more secure than paper-based systems, which is comforting in these days of GDPR.
Tax is being made digital
Another major reason to switch to paperless accounting is the upcoming Making Tax Digital changes. While it’s been subject to several delays, businesses will have to change the way they file tax returns.
- Businesses registered for VAT which have a taxable turnover below the £85,000 registration threshold must follow MTD for VAT rules for their first return from April 2022.
- Businesses paying income tax through Self Assessment will need to start following MTD for Income Tax rules starting from 6th April 2023 if their business income is above £10,000.
Whilst it might feel like plenty of time, preparing early will make the transition period less stressful.
Learn more about Pandle’s full range of features, or use our online transition tool. To talk to a real person about moving your practice to the cloud, call 020 3393 7434 or use the live chat button on screen.