Why you should introduce new technology before the new tax year
A new tax year presents the perfect opportunity to transition to new technology and overhaul your accounting platform. Here are five top tips for getting ready and starting a new financial year on a new system.
Many companies align their own financial year with the government tax year for ease of accounting. Nonetheless, even if your business is in sync, this period is exceptionally busy. A variety of taxes and duties are due, as are full year financial results and other official filings.
Additionally, existing accounting systems may need updating to cope with changes in financial and new requirements. As companies become increasingly multinational and accounting rules change, the pressures on legacy systems become more pronounced. Even small companies have to deal with handling accounting requirements across borders, or even implementing new accounting rules closer to home. If the accounting system used is no longer being updated, it can be hard to adapt it to cope with changes that were not envisioned when it was written.
Finding the right time to implement new accounting technology might be difficult, but starting a new tax year on a fresh system is likely to be the cleanest transition point. Here are some of our top tips to help you with this task, and make best use of the opportunity a new tax year and a new financial IT platform can bring:
- Assess your accounting capabilities: Before the end of the current tax year, start looking at how you handle accounting and reporting, how long it takes and how many different systems it involves. Documenting existing systems and processes is an important first step to identifying problems, as well as providing a clear set of minimum requirements from any new system. It will also reveal where you can rationalise systems, IT, process and free up personnel to work on revenue-generating exercise.
- Working with an external accountant or advisor: Do you outsource accounts and bookkeeping to an external accountant instead of having in-house accounting staff? How easy is it to work with them? Is there a modern workflow between your businesses? Using a cloud-based modern accounting platform can save time and money though delivering efficiencies and can also help make your external accountant much more of an extension to the team. A closer access to data means that your accountant will have the opportunity to spot issues and warn about them.
- Investment planning: In most companies, desktops, laptops and servers are refreshed after some years of use, which means that the most critical business systems outdate the hardware they run on. If that is the case in your business, now is the time to plan investment in your business needs such as new IT – not just hardware but software, support services and skills.
- Compliance planning: The changes in regulations such as the General Data Protection Regulation (GDPR) that comes into effect in 2018 will require changes or updates to IT systems to meet the new requirements. Early planning and running systems in parallel ahead of any legal deadlines will ensure an easier transition and fewer business disruptions.
- Out of date, out of time: If your existing accounting systems are not being updated regularly by the supplier to cope with changes to the regulations it is time to think about making a change. The new financial year is a clean point to move to a new system. A cloud-based accounting system offers many advantages including keeping constantly updated.