Gettin’ digi with it — the unforeseen advantages of MTD for your business
March 29th, 2019
Well folks, it’s here – the Making Tax Digital (MTD) deadline for UK tax for VAT. It has arrived! While most of us are being dragged like tax dinosaurs into the unrelenting digital future, moaning and groaning, there are some (dare we say it?) advantages that can be reaped as we waddle. So, what are some of the unforeseen assets of keeping our architecture, engineering, and construction design (AEC) businesses out of HMRC extinction?
Facing the inevitable financial future of AEC business — digitisation
While MTD becomes mandatory for businesses with a turnover over £85,000 or more on 1 April 2019 for VAT, the rollout of digital taxation across the board will continue over the next 12 months. And into the future. And beyond the UK. Until there’s only digital. There’s no longer any point riding our Finanaceosauroses into battle for the manual olden days of handwritten ledgers. This is happening, and it’s starting now.
Techradar quotes a research prediction that MTD could lead to a UK-wide tax profit increase of £6.9 billion. Yep, that’s billion. Because “when cashflow is managed efficiently, companies get paid faster and have access to capital for growth”. And digitising finance in your business means efficient management of your cashflow. The fact is, continues Techradar, “only 35 percent of businesses are using software to manage profit and loss, with others relying on manual records and computer spreadsheets.” … Shudder! If your architecture, engineering, or construction design business is still that giganotosaurus, transforming to digital finance systems now, while you’re at it with your taxation, will save you untold time and resolve unlimited potential error. And that means more profit. Huzzah for clubbing the caveman!
If your business management software is integrated with a financial system like Xero (who have worked closely with HMRC, pilot testing, and consulting with business owners and financial advisors over the last three years) then you’re on a winning wicket. The likes of Xero and QuickBooks Online are set up for compliance, so you can pat yourself on the evolutionary back.
Opportunity to switch to cloud
Beyond the financial opportunities inherent in MTD, there are broader advantages to be taken up if you embrace the digital destiny of your built environment design business. Namely, you can ride this tax train to the cloud. Deloitte research shows that SME businesses using cloud services actually grow 26 percent faster than the dinos that don’t. And, of the companies surveyed, 69 percent planned to increase their use of cloud technology. Cloud is the future, kids. Get into it.
Encouraging fresh thinking
Technology, implemented correctly, should be an amazing liberator for our businesses. It should free your architectural, engineering, or construction design business to collaborate and innovate without the restriction of specific location. It should increase productivity, enabling your staff to work, engage, and report anywhere, at any time through accessible and secure software.
It’s often challenging to get our staff and management to shift into new ways of doing things, new processes, or new software solutions. However, the sort of operational agility that results from a digital transformation will encourage fresh thinking across the whole of your business, at every level. And that’s the sort of evolution we want, isn’t it?! Green and growing, as they say.
Tying it all together — meeting challenges with integration
The Telegraph suggested that the challenges to businesses in going digital are “complex, siloed systems; an aversion to data-sharing or cloud computing; international locations and offices; or a reluctance to embrace modern ways of doing business.” If this is the case then we evolve our AEC businesses with multi-tenanted, globally accessible (i.e. cloud-based) software systems that integrate our business, financial, and project management across one platform.
In other words, we want to make our built environment business less Barney Rubble and more George Jetson. We want to take this ride into our digital transformation. And while MTD is dragging our pedal-powered cars there anyway, why not?