Making Tax Digital – Case study

posted on September 18, 2018in the Blog Category

Making Tax Digital – Case study

Example ABC is a tradesman who is not very computer savvy. Before moving to Xero he produced Sales invoices on Microsoft Word - updating all the information on the sheet for each sales invoice (invoice number, date, client name, address, due date, narrative and price etc), he would keep all purchase invoices and receipts and one evening each week would be spent going through these and adding to an excel spreadsheet. No bank reconciliation was completed and he never knew how much money he was making, he relied solely on the bank balance as an indicator. At year end we were provided with bank statements, sales invoices and his excel spreadsheets – these never agreed and therefore the accounts took a long time to produce and reconcile.

We moved him over to Xero with Receipt Bank. A sales invoice template was set up so each invoice only needs the narrative and price updating, the invoice is emailed to the customer through the system and at the same time posted to the accounts. He has a smartphone which we downloaded the Receipt Bank app too, he know takes photos of all his purchase invoices and receipts when he receives them. These are then posted directly into his accounts system based on rules which we have set up, the pictures are also attached so the original invoices/receipts can be thrown away. A direct bank feed has also been set up which allows us to reconcile his bank on a daily basis and ask for any missing information straight away.

Our client no longer spends his evenings producing sales invoices and going through his receipts which he hated doing, he can do this all from his van during the day. He now has access to up to date accounts at the click of a button and we can also produce the year end accounts much quicker and within a few weeks of the year end.

It’s also worth noting that our client did not want to use the Receipt Bank app so we had to download it in front of him and show him how easy it was, once he saw that he said how much time this is going to save him. He doesn’t know how to use phones but as long as you can take a photo you can use the app.

Concerned about making tax digital or interested in learning more, come and join us at our Making Tax Digital event on Tuesday 9 October.

Written By: Mandi Mottershead

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