As a business owner, or somebody involved in finance, you have undoubtedly heard of Making Tax Digital (MTD). But for those who have not, MTD is a government initiative that sets out a bold vision to transform the tax system and move it fully online. The aim of this is to make it simpler for both individuals and businesses to manage their finances through an online system, allowing users to view personalised tax accounts for relevant and up to date information.
For businesses looking to become, and stay MTD complaint in 2021 and beyond, investing in the right technology has been, and will continue to be, paramount. In this article, we explore how Enterprise Resource Planning (ERP) plays a key role in Making Tax Digital.
Ensuring consistency and security with ERP
As humans, we make mistakes, and accounting is no exception. However, with the help of an ERP system, errors can be eliminated, while ensuring data is kept secure.
Traditional spreadsheets or paper records can be easily adapted, both accidentally and on purpose – which of course can cause legal difficulties. Likewise, incorrect formulas can lead to incorrect figures, which could cause incorrect tax payments to be made.
ERP removes this worry by allowing businesses to store records online. Not only does this help meet HMRC requirements by preserving records digitally, but also provides an additional layer of security to better protect confidential business information.
Increased efficiency and visibility with ERP
Many businesses rely on spreadsheets and manual processes to manage their accounting, but this can be time-consuming, and often presents difficulties when it comes to submitting accurate tax reports.
With the help from ERP though, submitting VAT digitally can significantly improve efficiencies by streamlining internal processes. Providing a single, centralised location for data too, ERP ensures full visibility into financial records.
Digitising accounts with ERP can also provide employees with the tools they need to work efficiently from home, and can be integrated with apps for easy access wherever they may be. This results in a more flexible and productive home working environment.
Further business digitisation with ERP
With a little extra planning, businesses can piggyback off MTD, and use ERP to further digitise other areas in their business. Put simply, accounting software is just one function of ERP.
The technology can be used to support a wide range of operational needs, including sales, warehouse management, human resources, business intelligence, and supply chain management, all of which focus on providing real-time access to data for improved efficiency.
For companies struggling to manage a combination of spreadsheets, manual processes, and handwritten documents, ERP can be a great way to move forward, eliminate inefficiencies, and remove the burden on employees.
Supporting MTD needs with ERP
Although we cannot give specific financial advice, we can provide the platform you need to become and stay MTD complaint. As a certified NetSuite and Microsoft ERP implementation partner, we have the expertise and experience required to support your business software needs. For more information on how Nolan Business Solutions could deliver an MTD complaint solution for you, contact our expert team today. We are standing by to answer your MTD and ERP related questions.