Moving on to Online Cloud Software
Making Tax Digital (MTD) has been introduced for VAT-registered companies and businesses, and they are now required to use an online cloud software for their bookkeeping records. Unless the company had been using online software from before most businesses will find themselves required to transfer their information across platforms to meet the required criteria.
This article does not recommend any online software above another. Different software will be suitable for different businesses in terms of functionality, compatibility and cost so businesses should shop around before deciding on any one software. There is no need to stay with an online software once chosen but, as with most things, itâ€™s preferable to get the right one first.
Comma Separated Files (.CSV files) are used by most cloud software as a way to import and export information, such as bank feeds, invoice lists and expense list. Templates for the files are downloadable and editable for users to prepare spreadsheet information and to ensure the correct fields are completed before the information is uploaded so that the software can correctly allocate the data on their side. If moving from one software to another the CSV files can be generated by using export options on the old software and checking the columns of data are in the correct areas for the new software. If the dates and amounts figures are mixed over then the CSV will either be imported incorrectly, or the import will be rejected. Bank feeds must have their banked monies and withdrawn expenses in the correct columns, too, as the software will not recognise an error and may accidently post expenses as monies received and vice versa.
A CSV file appears as a spreadsheet and can be opened by many Spreadsheet packages. Bank statements are downloaded usually as CSV feeds from online banking options so the files should be easily amended to be presented in the way that the online software requires.
Some software will have applications that can be installed and used alongside the bookkeeping process, hooking up ecommerce or stock packages to pull the information across to the bookkeeping software. This prevents the need for entering information in twice in different places but can aid matching up invoices to specific stock items. Some of the applications connect to payment services such as Paypal and this information is imported in a similar way to the bank feeds.
If a business does not import data then it is at risk of producing misleading figures. If data is entered for dates after the next accounting period start date then there will be missing expenses and invoices that wonâ€™t be pulled through. Even if the start date data is correct and invoices and expenses are entered from that date, if the business had debtors then some of the monies received will be duplicated as income rather than setting off against old invoices. Similarly, if the company is keeping track of stock and incorrectly imports the data their stock figures will not match their actual stock count.
cloud accounting, online bookkeeping, bookkeeping, making tax digital, mtd