MTD for ITSA: Don’t just survive – thrive

From April 2024, every client that completes a Self-Assessment must keep their records digitally. This is a mandatory requirement.

As we all know, it takes time for people to get to grips with new software. So if your clients aren’t keeping digital records, now is the time to get them started.

First, you need to break down any mental barriers they might have. Then some clients will need to run through certain actions a few times before they become habit. 18 months is a good amount of time to get everyone up to speed. You wouldn’t want to wait much longer.

Make sure you have MTD-compatible software for filing

Most of the top accounting software companies are currently developing their systems for MTD for ITSA. You’ll be glad to know this includes the same accounting software your clients will be using to keep their records, such as Xero, Quickbooks, FreeAgent, Sage, IRIS etc.

“At Xero, we’re building an MTD for ITSA solution which we are testing with select customers from April 2022, as part of HMRC’s pilot. 

We will have a fully tested end-to-end solution well ahead of the 2024 deadline so that those who do want to be ready ahead of the deadline can do so.” - Xero

HMRC on MTD-compatible software 

Think about attracting landlords and sole traders

Thanks to MTD for ITSA, there will be a significant number of people needing an accountant that may not have had one before, namely – landlords. 

This is a good opportunity to start targeting landlords through your existing marketing channels. That might be sharing advice on social media, adding services to your website or spreading the word through your current clients.

Prepare your practice for quarterly ITSA submissions 

Come April 2024, landlords, sole traders – and clients that already submit an annual Self Assessment tax return – will have to send quarterly summary updates to HMRC. Then, after the fourth quarter, they need to submit an End Of Period Statement and a Final Declaration.

This begs the question: how scalable are your current internal processes? Do you know how you’ll handle all the extra chasing and submissions?

Automate your record requests and chasing emails

With the right software you can free yourself – and your team – from unnecessarily admin, such as; client chasing, whether it’s for the quarterly ITSA or any other service you provide. 

With practice management software you can create one master email (or ‘template’) for each service and the software will fill in any unique client information wherever you insert placeholders (or ‘variables). Then, at the right time for each client, these email will be sent.  

At AccountancyManager, many of our users choose to send an automated text (SMS) message at the same time, and find that clients will respond much faster. 

If the clients don’t respond, AM will keep chasing. You have total control and can pause the email queue if you want to check them over first. 

Automate your to-do list – using your clients’ accounting dates and deadlines

If you don’t use a practice management system, you might use spreadsheets to keep track of your clients’ dates and deadlines. You probably have a column to record whether they’ve been asked for information and whether they’ve responded. And another to say if a job has been completed. 

It must be a mammoth spreadsheet and ITSA will just make it bigger.

Practice management software like AccountancyManager is built using these exact spreadsheets and controlled using the same client data held within them. It gives each member of your team an automatically generated Task List that’s powered by each client’s required services and deadlines. 

Optimise your efficiency with a consistent workflow 

Internal systems and processes will be challenged once MTD ITSA goes live and workflow management tools enable firms to optimise their internal processes. Tasks can be intelligently allocated to the right member of the team at the right time. Each task can be broken down into subtasks and group those steps into milestones. Give the milestones their own deadlines and assign different people to different subtasks.

The overall Task has a statutory deadline, an internal Target Date of your choice and deadlines for each milestone (collection of Subtasks) within it. This gives you full control over how and when every part of every job should be completed.

Let your clients sign-off accounts through your website

With additional submissions to HMRC added to your workload, the way your clients confirm and sign off the information needs to be as efficient and easy as possible.

That’s where Client Portals and e-signing become integral. Just upload the documents you need to send and your client can log in through your website and see all of their documents. E-signing is built in and quick to use, so there’s no waiting for clients to print and scan or post.

Worried about how much time MTD for ITSA will take up?

It can be unnerving to know that MTD for ITSA will take time away from your other responsibilities, but not know how much. Even with all this automation and organisation, MTD for ITSA will inevitably add to your workload. 

With time tracking functionality within practice management software, you can keep track of the time you and your team spend on each client. With this visibility, you’ll know where you might need to add more resources, move work around or even increase fees. 

Prepare your processes in plenty of time

Take a look at (and play with) everything AccountancyManager has to offer on a 30-day free trial. If you have any questions at all, our team are just an email or phone call away.