Understanding what your clients need

Getting all the data from clients is going to be one of the main challenges for bookkeepers and accountants as we move towards MTD ITSA. Not only does it have to be complete but it also has to be accurate and timely if the posting of quarterly updates is going to work efficiently.

Putting the right tools into their hands therefore must be a key consideration. A full bookkeeping system might be too complex for what they need, or too complicated for them to use properly. The last thing the firm will want to be doing is completing lots of repair work in short timescales.

Taking care to help them work in the right way, and to form the habits needed to keep on top of their digital record keeping, starts with making sure the software they use is appropriate, effective and simple to use.

How they currently work and how that will change

Thinking about how they are keeping their records at the moment and what they will have to do in the future can be helpful to narrow down the choices. The answer to some of these questions could help. Do they:

• Use any software at all at the moment?
• Have a separate bank account for business income and expenses?
• Keep a record of their transactions as they go along?
• Consistently input their receipts and invoices?
• Manage to code effectively?
• Keep all of their receipts safely?

If the answer to any of the above is no, then MTD may come as quite a shock, especially as not regularly recording transactions could lead to fines in the future. If they are using software at the moment (for example bookkeeping), but not in an accurate or consistent way then tools need to be sought that will help make this easier and quicker.

As many sole traders are focussed on their cash position, then thinking about simple data collection might be the best option, leaving the more technical accounting side to you.

The impact of their trade

Another factor might be how their trade impacts on what tools should be used. For example a business where there are only a small number of invoices sent each month and little in the way of expenses (like freelance tech developers), may have a different requirement to those with lots of cash based sales transactions and the need for stock (such as in home beauticians).

While some may benefit from moving other processes to digital systems at the same time, perhaps to include being able to take electronic payments, others may just need a direct replacement.

Ultimately, making it work for the client is paramount, but this needs to be balanced out with the reality of the firm having to  know and support numerous different systems.

Keeping things simple

Boiling things down to the most core requirements should help here. Rather than trying to find the perfect balance of software, or even having a bespoke approach to each sole trader client, consider what the main processes and data requirements are across the broadest reach of your client base. Generally for MTD ITSA this will be to report on the income and expenditure over the quarter (although the precise reporting requirements are yet to be announced as of writing), with the final adjustments made at year end as usual.

Focussing therefore on collecting, collating and coding the core data would cover the majority of needs. Accessing the ledger being something that may just need to be optional as far as the client is concerned.

Keeping things simple for the clients is a priority, but so is not creating too much technical overhead for the firm, and being able to build a straightforward automation process which can minimise the amount of manual work required and protect margins.

How AutoEntry may be the only tool they need to see

AutoEntry provides that simple route to providing clients with a smart and reliable system for getting all the data into one place where it can be collated and coded correctly.

Using rules within AutoEntry means the system can learn about how to treat the data as it flows in, meaning that by the time it reaches your hands the majority of the work should have been done and you can focus on reviewing and analysis part before filing.

Regardless of the clients trade or attitude towards their financial administration, AutoEntry provides a scalable and reliable way of giving clients the only MTD ITSA tool they are likely to need.

Visit our Making Tax Digital page for more insights and tips to get you MTD ready