Making Tax Digital: Interacting digitally with businesses
Let’s face it, we’re all used to interacting online today. So, interacting with HMRC in this manner when it comes to the Making Tax Digital (MTD) initiative is a natural progression of this.
MTD allows HMRC to better track tax collection and for organisations, it provides easy access to their tax affairs and a faster, smoother tax filing process.
Businesses (and their agents) will be able to contact HMRC digitally at a time to suit them. They already have access to a digital account which presents organisations with an increasingly personalised picture of their tax affairs, along with prompts, advice and support through web chat and secure messaging. Digital record keeping software will be linked directly to HMRC systems too, allowing businesses to send and receive information directly from their system.
The digitisation of finance, and the integration of applications, both inside and outside the organisation, can dramatically help to connect teams, clients, suppliers and more, driving up productivity and effectiveness.
Providing collaboration tools will also encourage teams to co-operate across disciplines, breaking down departmental silos. It’s also an opportunity for finance teams to play a bigger role and interact more closely with the rest of the business – sales, marketing, product, clients/customers, suppliers, in fact, most touch points both within and outside the business, including HMRC.
What’s more, accounting software that provide small slices of functionality can be leveraged to purely focus on credit control, procurement or other tasks relevant to specific job roles. It allows the CFO to divide priorities across the finance team and effectively share and collaborate on pending work. It means people see the tools that are most relevant to them when they start their working day, with each of these slices of functionality seamlessly connected with the overall accounting software for a truly integrated, scalable system.
It also opens opportunities for senior finance professionals to act as advisors to the business. Being able to see the bigger business picture through connected teams and technology, will allow CFOs to access and visualise data in real time, advising other areas of the business and helping them to make better business decisions.
A recent report by Accenture1, which positions finance as an ‘insight engine’, states, “Digital finance will speed the CFO’s evolution from cost authority to business value architect.
“The Finance 2020 organization will be the go-to source for decision support, delivering analytic insight to drive strategy across economic, market, competitor and customer perspectives. Yet this future is impossible without big changes to the finance operating model, technology and people.”
In fact, Accenture estimates that ‘more than 80 percent of traditional finance services will be delivered by cross-functional teams’.
It’s this greater connectivity between teams, underpinned by integrated technologies that will help the business run smoother, provide highly-refined insights and a platform for growth. Financial professionals would do well to view MTD as an opportunity to get their investment in business systems and accounting software prioritised now and in front of the Board. The time is ripe to turn this regulatory pain into an opportunity to take control of the business and reap the rewards of greater productivity, performance, and profitability as a result.
From this perspective, MTD can act as the springboard to help CFOs move the business from its compliance focus to addressing the long-term view, looking at how the organisation operates and interacts with internal and external stakeholders. Closer interactions with HMRC will help to ensure that tax questions are answered quicker and that businesses can fulfil their tax obligations with the minimum of fuss. A similar approach can be taken with every other stakeholder that the business interacts with, helping it to conduct business faster and with greater ease.