How bookkeepers can support you with MTD for ITSA
We explore how bookkeepers can support your business with navigating HMRC’s MTD for ITSA initiative.
How bookkeepers can support you with MTD for ITSA
As most business owners will know, it's easy to fall behind on admin every so often. But before you know it, one or two unreconciled statements stack up. Suddenly, your bank feed becomes overwhelming.
It doesn't need to be this way. Not if you have a skilled bookkeeper waiting in the wings. Working with a bookkeeper can help you build better habits around your financial admin, prepare for your tax bill, and manage your finances more effectively.
And with Making Tax Digital (MTD) for ITSA on the way, there’s never been a better time to find someone to keep your books in check. In this quick guide, we’ll take a look at how working with a bookkeeper can help you stay on top of your business admin.
What is the difference between an accountant and a bookkeeper?
Without bookkeeping services, accountants can’t do their jobs. Great accounting relies on an accurate, up-to-date ledger. Bookkeepers record, maintain and reconcile business transactions. They keep your information stored, safe, and accurate. Many bookkeepers also cover tax returns, so this isn’t a service that's unique to accountants.
For some business owners, it’s not a question of an accountant or bookkeeper – they’ll work with both. Other business owners can get all of their needs met by working with a bookkeeper. If you’re trying to decide between accountants vs bookkeepers, look at the services outlined by each to see who will provide the most value for you.
When it comes to MTD for ITSA, many bookkeepers will be able to provide all the services businesses need to comply with the legislation.
Can a bookkeeper do tax returns?
However, it’s important to note that not all bookkeepers offer the same services. Some specialise in bookkeeping tasks, such as recording transactions and producing financial reports. While others might be tax experts in their own right.
Many bookkeepers can support you with MTD for Income Tax, given that maintaining an up-to-date ledger is critical for your quarterly updates. Plus, most bookkeepers can guide you through choosing and implementing ITSA-compliant software.
How do you know if you need a bookkeeper?
If you’re not sure whether you need a bookkeeper’s support with MTD, here are a few reasons why you might want to hire one:
- You don’t have time to keep an eye on your books
- You’re new to bookkeeping and don’t have the expertise to maintain accurate financial records
- You’re using a bunch of disconnected apps, tools, and processes that make it hard to see your true financial picture
- You’re new to MTD-compliant software and would rather have an expert take the reins
- You’re keen to reduce the risk of MTD penalties and remain compliant
The benefits of working with a bookkeeper for MTD for ITSA
Working with a bookkeeper isn’t just for MTD compliance. Here are just a few benefits of working with a bookkeeper for MTD for ITSA, and more:
If attention to detail isn’t your strong suit, it’s worth trusting a bookkeeper's beady eye. Bookkeepers are trained to keep accurate financial records, which will help ensure your tax returns are correct and filed on time.
And since keeping digital records is one of the essential aspects of MTD legislation, having a bookkeeper who prioritises accuracy and compliance can save you time, hassle, and MTD penalties.
2. Regular maintenance
Before hiring a bookkeeper, you might have completed your bookkeeping ad hoc. But a bookkeeper will maintain your accounts regularly and systematically, leaving less room for error.
This will be especially useful when MTD for ITSA comes into effect since quarterly updates depend on regular and consistent bookkeeping.
3. Time savings
Even if you only have to spend a little time on it each week, you could probably benefit from spending that time on other business aspects. By outsourcing to a bookkeeper, you can free up time to work towards your personal and professional goals.
4. Improved cash flow
If your books are regularly updated, you’ll always have a true reading of your financial position. Bookkeepers can share insights about your cash flow, which will help you make informed financial decisions.
5. Peace of mind
Sometimes it’s not about reducing the workload, but the mental strain. Having a professional bookkeeper on board can give you confidence and peace of mind, knowing your accounts and tax affairs are in safe hands.
6. Informed decision making
Bookkeepers can support you with so many essential business tasks, from bank account reconciliation and payroll to fraud detection and cash flow monitoring. Having someone who can reveal insights about your financial position will help you plan more effectively and make informed decisions about your business.
If you’re ready to bring an ITSA-ready bookkeeper on board who uses MTD-compliant Xero software, have a look through our Advisor Directory today.
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