We know that MTD (Making Tax Digital) is now mandatory for all UK VAT-registered businesses as of April. But did you know that MTD for ITSA (Income Tax Self Assessment) is also set to become obligatory from April 2024?
This is great news for those of us who want to ditch the paper records. Still, it does mean that managing our business finances online has never been more important.
Logging invoices and receipts as they come up is an essential part of keeping your records on track. At Addition, we help over 180 business owners with digital finance management and support. And in our experience, there’s no tool more suited for the job than Dext.
So – what is Dext?
Formerly Receipt Bank, Dext lets business owners electronically capture and store receipts, invoices, bank statements and more for accurate and secure financial records. It’s as simple as taking a snapshot of the document via your Dext app, which then extracts and categorizes the data for you.
Yes – it really is that easy. Why else would we recommend it?
How does Dext work?
Dext uses OCR (Optical Character Recognition) technology. Like Xero, it has an open API and connects with over 1,400 other suppliers including Etsy, Amazon, Paypal and Stripe. This means it automatically collects sales data from these linked accounts and stores it where it needs to be.
Here’s an overview of what Dext can do:
- Capture receipts and other documents with your mobile phone camera
- Simplify expenses to reduce time spent
- Multiple file formats for reports
- Automate bookkeeping functions
- Store your data securely in the cloud
- Sync with your inbox to pull data from email invoices
There are two main sections of Dext: Costs and Sales. Let’s explore these two areas a little for clarity’s sake.
Dext tells us that the Costs Workspace ‘contains all of the receipts, invoices and other financial documents that your business uses to purchase goods and services’.
When you upload a snapshot or new document to the Costs workspace, Dext extracts the data to your Costs Inbox. From there, it will move to In Processing, where you can see the estimated time remaining for Dext to do its thing.
According to Dext, the Sales Workspace ‘contains all of the invoices and other financial documents that your business issues to its customers for payment.’
Just like with Costs, you’ll have a Sales Inbox where you upload your documents or snapshots. Once it goes through Processing, you’ll find it in the Ready tab, where you choose to export the document to multiple formats.
TOP TIP: You can also upload documents, like statements from your business bank account or invoices, to Dext manually instead of taking a photo if they’re already in digital format.
Why use Dext?
1. All expenses paid
Capital One reports that 50% of people who front company expenses end up not being fully reimbursed. That’s a shocking number – especially when you consider that 42% of respondents blamed lost receipts for the failure. With Dext, you can log expense receipts as you go, or send them directly to your finance team or accountant (who’ll help you claim them back in tax).
2. Office space
With more of us than ever working remotely or in hybrid models, being economical with our workspace is important. Dext eliminates the need for paper records and reports. So you can Marie Kondo the heck out of your place of business – whether it’s an office or a kitchen table.
3. Real-time, all the time
One of the best things about Dext is that you can access your data in real time. Having your income and outgoings all in one place will help you make better, more informed choices for your business – and avoid any nasty surprises.
4. It’s about time.
The amount of time that using Dext frees up really can’t be overstated. A quick snapshot here, click of a button there, and boom- your finances are logged, categorized and wherever they need to be.
TOP TIP: Dext runs a free intro session every week for newcomers that you join via Zoom. Why not join in and learn more about Dext?
Want Some Help With That?
Dext is an agile, robust tool for any small business owner. In fact, we’re so sold on it that we make sure all our VAT registered clients are connected to Dext via our Addition app. This lets you view your supplier payments, tax relief claims, reporting and more.