Codestone

Category: Accounting and Financial Software

UK businesses have been reminded of the need to ensure their accounting software solutions are updated to take account of the forthcoming VAT rise.

The Forum of Private Businesses (FPB) has noted that all VAT-registered companies are to see their finance management affected by the forthcoming change in the rate from 17.5 per cent to 20 per cent on January 4th 2011.

This increase will lead to a large number of smaller businesses changing their prices, a process which could require "sizeable forethought" for those that sell thousands of different products.

Phil Orford, chief executive of the FPB, said that accounting software may therefore need to be updated, while VAT returns must be checked properly to avoid complications.

"Firms will need to make sure that their accounting system changes accordingly and is issuing invoices and recording sales and transactions at the new rate from January 4th," he explained.

Earlier this month, construction software company Nemetschek told the Financial Times that consolidated accounting software has helped it to reduce the complexity and improve the effectiveness of its financial reporting.

Posted by Jack Gilbert