How to get ahead of Tax Season: A Guide for SMBs

Small business owners used to dream of the days when they would be able to breeze through tax season and set aside the countless piles of tax paperwork. Today, as more businesses adopt digital tax returns as standard, those dreams can become a reality.

Businesses have been handed the opportunity to streamline tax season once and for all – with the added bonus of setting great accounting practices in place for the rest of the year. As we approach the Making Tax Digital deadline (April 1st 2022), getting ready has been vital.

What has it taken to unlock a business’s inner tax guru, and how can other businesses do the same as the next tax season comes around quickly? Here’s five top hints and tips for small businesses to boss tax season every year – and take control of your finances forever.

Get digitised

Digital taxes might be designed to make tax easier and help you get ahead, but we know that making the switch can be tough. The good news? Accountants and technologists have been preparing for years so you don’t have to. 

Surviving the tax season is easiest when you have modern, cloud-based accounting software at your fingertips. It’s functional, compatible software – helping you to complete everything the Government is asking for with confidence. The right accounting software enables you to keep accounting records digitally, and it can communicate two-ways with the taxman to submit returns or receive information.

Small and mid-sized businesses that still rely on spreadsheets and filing cabinets are burdened by time-consuming and error-prone manual input. Bridging software is a great way to get started on your digital tax journey, freeing up business owners to spend more time getting to know their customers’ wants and needs. 

One of the greatest benefits of investing in truly digitised accounting software today is its ability to spot errors in the data and provide a suggestion on how to correct it to make sure you stay compliant.

Stay in the know

Being clued up about what’s required of your taxes and when deadlines are looming can bring unrivalled calmness at this time of year. Yet, reading the regulations and interpreting the law can leave businesses with more questions than answers. 

With software built on a deep understanding of the law, and developed in collaboration with governments themselves, organisations can trust that the technology is categorising, analysing, and submitting their data in the right way. And, thanks to APIs, the software can be easily updated and adjusted based on new or changing requirements.

Staying in the know is also crucial throughout the rest of the year. Accounting software can show you real-time VAT totals that are vital for day-to-day finances. Keeping previous tax data safely and securely in the cloud, for long-term comparison. It’s also key to compliance: many governments now expect companies to keep accurate, complete and readable tax records digitally. 

Enhance your efficiency 

Tax season is commonly associated with masses of records, and long hours. However, with the help of digitised software, preparing large volumes of data for tax should take a fraction of the time. 

Acing tax season is all about preparing the data ahead of time. Whenever a transaction is made, you should store a digital copy to record and preserve the information you’ll be required to submit in your tax return. Forget the days of manually typing it out; today, tax software can scan paper documents into the software, and use AI technologies to filter the necessary information quickly and accurately.

When it comes to creating invoices, technology is a whizz at this too. It can create customised invoices and track payment progress end-to-end. Recording these transactions in an HMRC compliant system, rather than a simple spreadsheet, will ensure everything is primed and ready for submission come the end of the tax year. All this takes just a few clicks to submit, rather than a week of panic.

These continuous time savings elevate the work of small business owners and push them to reach new levels.

Be confident that you are compliant

For peace of mind that everything is compliant, businesses can view their tax information in one place through their accounting software, generating digestible reports that offer useful insights into the business’s finances, whether during tax season or any other point in the year.

Recent research shows that 92% of SMBs now use the service go an accountant, naming them as their number one source of advice. And the greatest driver for partnering with an accountant, Making Tax Digital legislation.

Many choose to seek the advice of an accountant for increased peace of mind. Having your records stored digitally means you can communicate your business’s finances in seconds and help your accountant get up to speed. Since it tracks and categorises all income, expenses, sales and transactions in one place, creating a report that’s easy for both parties to understand is just a click away.

Feel the business benefits of tax mastery

Fuel your business for tax season success – and less stress – with the trusty combination of digitised accounting software and the human touch of an accountant. Then, don’t look back!

Integrate the automated software into your everyday work to manage cash flow, eliminate admin, gain real-time insights and stay on top of your business performance. 

Now, you’re ready to take control over your finances, not only on deadline day, but every day of the year.