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Making Tax Digital: How automation can be used to facilitate compliance

08/08/2018

The Government’s Making Tax Digital (MTD) initiative pledges to modernise and digitalise the UK’s current tax system, bringing tax processes online and making them simpler and more efficient. But what many businesses will be wanting to know is exactly how MTD will give them a clearer picture of their taxes. This is where automation can have many direct benefits. Realistically, for a large company whose annual turnover is well beyond the £85,000 threshold, recording all financial activity manually becomes an almost impossible task.

Fortunately, as explored in our previous blog on implementing MTD with Business Central, Microsoft have introduced some excellent solutions which support MTD compliance, PowerApps and Flow being some additional examples, as well as Dynamics 365 Business Central, their recently released cloud-based financial ERP. The latter’s advanced automation functionalities make it the perfect platform to assist businesses both with their MTD compliance and their financial activities across the board.

Digital transformation = Transparency

With increased uptake of automation technologies and digital transformation initiatives influencing not just financial services but almost every sector in the world, it does come as a surprise to learn that 65% of small firms are still relying wholly on manual accounting methods. Making the switch to automation-supported workflows is not usually a simple task, which is why the majority of smaller organisations may avoid it.

But the reality is that digital accounting solutions such as Business Central and Dynamics GP actually make complying with MTD far easier. Both solutions allow end-users to build and customise automated workflows within their accounting systems, making the recording and completion of financial activity virtually effortless.

Reducing the likelihood of human error

Human error remains the number one cause of data loss/inaccuracy within the accounting industry, with as much as 27.5% of all cases directly caused by human error. With MTD’s focus on tightening up the accuracy of financial reporting, it will soon become even more important for companies to be able to ensure the figures they have recorded are 100% correct.

Automation can bring this much-needed hyper accuracy to financial reporting, substantially minimising the risk of human error. By utilising automated workflows, repetitive tasks can be fully handled and completed within intelligent systems such as Dynamics 365 Business Central. Business Central also provides users with full integration with a vast range of Business Central user-created apps that are free to download from the Microsoft PowerApps platform, allowing accountants to custom-automate financial functionalities within the system for themselves, tailoring how the system assists them with their reporting to their own needs.

Real-time accurate reporting

A key benefit of an automated solution such as Business Central is its ability to utilise and integrate the powerful real-time reporting and dashboard creation functionality of PowerBI. From an accountant’s perspective, the ability to receive automated, real-time reports on all the information contained within a financial system is invaluable to ensuring data uniformity and accuracy.

The ability to monitor data and financial activity plays directly into the requirements of MTD and provides accountants with a huge advantage when it comes to ensuring compliance. These PowerBI reports can also be exported and shared between other internal and external contacts, enabling both easy sharing and absolute transparency on internal financial data, facilitating reporting both internally and to HMRC.

Are you looking to enhance your financial reporting through automation? Do you want to find out more about what will be required from your ERP under Making Tax Digital? An intelligent automated solution such as Business Central could resolve both these business challenges at once.

Book in a Business Central demonstration today to view the solution in action and see how we could support you in your journey towards MTD compliance.

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