How Do You Integrate Tax Software with Your Accounting Systems?

In today’s digital age, every industry has been revolutionised by technology, and accounting is no exception. The evolving business landscape needs software that is integrated so that the business operations end, the accounting processes are run smoothly, and data is synchronised on both platforms. If you are a new businessman and you are uncertain about how to integrate tax software with accounting systems, this article will provide you with the details.

 

How Do You Integrate Tax Software with Your Accounting Systems?

Software integration allows two or more software to connect and share data with each other and to update data simultaneously through application programming interfaces. The outcome of this connection is seamless, linked software to update data without interruption. The data is put into one system that automatically links with data available on the other application. For example, online banking apps are connected with the accounting software whenever a transaction is made. The system automatically updates the data on the accounting software dashboard and bank statement as well. By adopting software integration, it is easier for companies to create efficient workflows, reduce human error, and save time that can be used in other manual tasks.

What is an Integrated Accounting System?

In general, the integration of accounting software means that software is combined with various other financial tools in an organisation. This integration process aims to harmonise the financial applications, thus facilitating effective communication, coordination and teamwork between the company employees. Integration helps seamless financial operations, which are carried by accounting system.

Integration involves linking financial components such as payroll accounts payable and the general ledger of the integration, significantly minimising the need for manual data entry, which ensures that any update in one section is automatically to the other integrated section of the company.

Integrating Tax Software with Accounting Systems

The steps explained below are followed when you choose to integrate tax software with accounting systems.

• Choose a Compatible Payment System

The first step in Integrating tax software is integrating tax software with an accounting system is to choose two compatible systems. The accounting software should support the same format standards and protocols as your tax software. If the accounting system uses the ISO 20022 standard for financial communications, you should integrate the tax software that uses the same format. Otherwise, you can use software that can bridge the format gap between software.

• Set up your Payment Accounts and Categories

The next step is to set up your payment accounts, categories in your accounting system and integrate them to your bank payment methods and other financial channels. This integration will help you trace and reconcile your payments and generate accurate reports and invoices. In this integration, separate accounts can be created for credit cards, PayPal, and direct bank transfer. Sub accounts can also be created for different regions and currencies, thus beneficial for multinational companies.

• Automate your Data Transfer and Validation

The third step in software integration is to automate the data transfer and validation between the two systems. This automation will save time and effort and reduce the risk of errors and discrepancies in the cash transfers. The biggest tools that can be used to automate the data transfer and validation are APIs, webhooks, patch files, and cloud services. The cloud-based integration will help you reach the data from anywhere around the world.

For instance, API can be used to connect the payment system to the accounting system and send and receive data in real time; the updates in tax laws can also be automated using this integration. A webhook is used to trigger an event in the accounting system when you are filing tax returns to the HMRC. In addition, a batch file or a cloud service is used to upload or download data in bulk.

• Configure Your Reporting and Invoicing Settings

The fourth step is to configure reporting and invoicing settings in the accounting system and the text software. These settings can be tailored according to your business needs and preferences. The customised setting will help you generate meaningful and accurate reports and invoices according to the indicators you have set and also convey the information to the customers and stakeholders of your company.

For instance, you configure your reporting settings to include the relevant information such as payments, amount, currency, date status and reference number. Your reports will include the options that you have selected. You can also configure the invoicing settings to match multiple languages and the tax requirements of the UK government.

• Monitor and Review Your Integration

The final step in the integration process is to monitor the software regularly and update any adjustment if needed. The regular integration survey will make sure that the operations are done smoothly and securely. The regular adjustment will help you meet your financial goals as you update the integration settings according to your current needs. The integration status can be reviewed by conducting audits, tests and feedback surveys. These will evaluate and review the efficiency and compatibility of the integration system.

Benefits of Software Integration

Below are the benefits of integrate tax software with accounting systems.

• Eliminate manual data entry
• Create custom rules to map your transactions
• Centralise your process
• Provides real-time Visibility
• Easily import and sync transactions
• Automatically update data
• Help close your books 10x faster
• Automate your workflows
• Customise your exports

 

Conclusion

When you integrate the text software with your accounting systems, it benefits you in many ways. The integration helps you automate the data entry and create custom rules to map your transactions. This integration provides real-time visibility of your data and easily imports information from other software. Integration can be done by choosing the right software that are compatible and then setting up the payment accounts and categories. The next step is to validate and automate data transfer. The last steps are to configure your reporting and invoicing settings and monitor the integration regularly.

Disclaimer: All the information provided in this article on integrate tax software with accounting systems, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.