I don’t understand what my software has done

“I don’t understand what my software has done but I’m sure the figures are wrong” – a statement I have encountered more than once over the last couple of months. With the first Making Tax Digital filing deadline only 10 days away now, it’s crucial that you feel able to trust the software or app you’re using.

The question is, once you start having doubts about it, what do you do? Can you satisfy yourself that the problem was a one-off? Should you spend time and effort trying to sort it out yourself? Do you pay a bookkeeper or accountant to sort it out for you? What if you pay a professional to sort it out and the software malfunctions again? Once trust in a software package or app has been lost, it’s very hard to rebuild.

Several weeks ago I was contacted by a lady in exactly this position. Whilst she hadn’t been using all the features of the software package she was on, the bit she had been using had been working well, until a software update corrupted her data. She also felt the software was quite expensive for what she needed.

We talked about what had gone wrong in the software and what would need to be done to correct it. We also explored training and whether she would like me to show her how to use other features of the software. She declined. She didn’t trust the software any more and wanted to change.

She said she liked the sound of FreeAgent. We discussed the nature of her business, how she currently keeps her receipts and records, what features she needed her bookkeeping package to have, and whether she used any other software in running her business. We agreed that FreeAgent would suit her business.

We spoke about Making Tax Digital (MTD), and whether FreeAgent would be compatible with Making Tax Digital when the time came – which it is.

We talked about who she was intending to do her Self Assessment tax return. She said she was planning to do it herself, but that she would also like a backup option incase she changes her mind. FreeAgent allows you to grant a bookkeeper or accountant access to your data, making it easy to enlist help with your bookkeeping or tax return when you need it.

FreeAgent is a UK cloud-based all-in-one software package that can keep digital records, send quarterly MTD updates to HMRC, and submit end-of-year Self Assessment and Making Tax Digital tax returns. It is quite expensive to subscribe to directly, but you can get a free licence for one sole trade or rental property business with a NatWest, Royal Bank of Scotland, Ulster Bank or Mettle business bank account.

FreeAgent suits the size and nature of her business, so she set about transferring her business bank account to NatWest. By having a business account and paying bank charges, she can access FreeAgent’s all-in-one bookkeeping and tax software for free.

We set FreeAgent up together, making sure that all relevant information and opening balances were transferred across from her previous accounting software, and downloaded backups of all her historic accounting data so she could cancel her subscription. Over the space of a few weeks, she went from feeling anxious and frustrated about a bookkeeping package she no longer trusted, to using a software package that she could be confident had been professionally-set up with one-to-one support to get her started.

I’m seeing more and more people expressing concern at the number of software packages and apps that are coming onto the market – packages that have been recognised by HMRC, and are technically able to meet the requirements of Making Tax Digital, but which are somehow lacking when you look at the bigger picture. Does the software truly meet your needs, or does it just tick the box for being MTD-compatible? Has an accountant or tax professional been involved in its development? Can you export your bookeeping data if you decide to move to a different provider? Can you run backup reports to store locally in case the software company goes under?

If you’ve got any concerns about the software or app you’re currently using and would like to explore alternatives, please get in touch. Equally, if you are new to bookkeeping and accounting software and want help in getting started, I can set you up from scratch with a reputable software package and train you how to use it. Prices from £300 with optional ongoing support £15pm.

[Image by Drazen Zigic on Magnific]