How Making Tax Digital is going to help the retail sector
Shop closures are an all too familiar scene. A recent study by The Guardian found that English and Welsh town centres have lost 8% of their shops on average since 2013 (equating to 40 shops per town centre). While the sector is riding the waves of a storm, the digitisation of tax has the potential to benefit those shops it effects.
As you’ve probably heard by now, Making Tax Digital is a new Government initiative that requires businesses registered above the VAT threshold to keep their VAT records digitally. This means retailers need to get on board with cloud technology if they haven’t already so that they can submit their VAT returns online.
Technology is a part of our everyday lives, yet some small retailers have been the slowest adapters in the digital age we are living in. Here’s how this new legislation is good news for small retailers:
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Get up-to-speed with technology
These new rules apply to how you submit VAT, but they’ll also give retailers the opportunity to learn more about other technology tools out there. By getting on board with Making Tax Digital, you’ll also learn about how other new apps and technologies, such as iZettle or Unleashed, can help improve processes and your customers’ experience in store.
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Make the most of integrations
By using software providers like Xero to submit your VAT online, you’ll also be able to use a whole host of other apps which can improve the performance of your business. For example, Vend creates a smooth point of sale experience while keeping an active inventory, while Expandly can connect to online retail systems like Amazon.
This means you can consolidate a lot of the tools that you use to smooth out operations.
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Improve your cash flow
Managing cash flow is never easy. But by having your finances online, you’ll have access to the state of your cash flow in real time. Gone are the days of subtracting expenditure against sales – accounting software can do this for you instantly. You could even take it one step further by using a cash flow forecasting app such as Fluidly.
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Ensure employees get paid on time
Paying employees accurately and on time is always a priority for any business owner. When using software like Xero, you have the option of making the most of its Payroll tool. This enables you to pay employees with a few clicks, with the option to adjust wages for the pay run.
Tax and leave calculations are already done for you, leaving no room for confusion or error. Annual leave can be applied for through the payroll system, creating an integrated and seamless experience for employer and employee.
All of the above benefits of cloud accounting accumulate to one larger advantage: time saving. Freeing you up to focus on how to improve customers’ experience, satisfaction and loyalty to your shop. And that is invaluable.
Donna Torres, Director of Small Business at Xero
