CloudBook are digital accountants. Since starting up in 2013 we have specialised in providing a totally digital accounting service. From signing up to signing off, everything is done online – see how we work. As online accounting software specialists, we are in a perfect position to help you with Making Tax Digital (MTD). Everyone will need to comply with MTD, HMRC’s new regulations. Are your accountants making tax digital ready?

Digital accountants
Photo by Mikael Blomkvist

What are digital accountants?

A digital accountant does everything online and provides all services in electronic format, rather than on paper or in person. We don’t use artificial intelligence (yet!), but we use intelligent and efficient cloud services to provide our clients with a 5.0 star service (Google 13/03/2023).

Why use digital accountants?

Everything is going digital, from banking to books, and from TV to tax. HMRC are gradually making tax digital for everyone. That means keeping your accounting records online and submitting an digital tax return which has links to your digital records. So you will need an accountant who knows all about digital accounting. Using a fully digital accountant can save you accountants fees because they should be more efficient and have lower costs. Digital accountants should also use much less resources, so using one would reduce your environmental footprint.

What is digital accounting?

Digital accounting is online accounting. Where you record all of your business or tax transactions using software. That software will categorise your transactions into appropriate categories e.g. sales, materials, wages, rent. Then you can provide and digitally submit reports of your totals to HMRC as part of their new making tax digital regime. This is already a requirement for all VAT registered businesses. Making Tax Digital will soon be a requirement for the self-employed (including landlords), companies, and individuals.

Is it easy to use digital accounting?

Being specialist digital accountants for over 10 years has given us experience of many different digital accounting providers. Some are difficult to use but most are easy to use and we know which is which. So we can help you choose the best online accounting software for your small business. The best accounting software is not only easy to use but will save you time through various features. For example:

Is there any cheap digital accounting software?

Yes, there is free online accounting such as Pandle and Quickfile. Cheap online accounting such as Pandle Pro, QuickBooks Essentials, and Xero Starter. And not-so cheap digital accounting such as QuickBooks and Xero Standard. However, as digital accountants we can get you discounts on some of these. Such as 50% off of Pandle Pro, 15% off of Xero, and similar discounts for FreeAgent. Even if you pay for software, you will be saving overall if you factor in the time you’ll save using its many features.

Aren’t all accountants digital now?

Certainly not. There are still traditional accountants with expensive offices, using tons of energy, with staff travelling many miles, using forests of paper, wasting time in many meetings. They might say they are digital accountants, and the final paper version gets submitted to HMRC digitally, but they are not fully digital. We are and we’ve been helping to save the planet since 2013.

Signing up digitally

We can have an online meeting to discuss your needs, or a telephone call, or simply emails to answer any questions you have. Our online sign-up form can securely take all of your details we might need, or just one or two essential details. Then we upload a contract (engagement letter) to an online e-signature service. You can email or upload a copy of your identity to our secure online filing service. Then we check it using a secure service. That’s it! You could be signed up within 1 hour.

Getting your digital tax returns done

We use secure cloud services to turn your accounting or tax records into digital accounts and digital tax returns. Then we upload your digital reports for you to approve then digitally sign. Finally, you can pay our cheap accountants fees using an online payment service, or your online banking. So you could sign up and sign-off all within 1 day, without either of us travelling anywhere, or using a piece of paper. Being digital accountants makes everything easier for you and us, so our fees stay low. Get a quote now – online of course!

The easiest way to do your bookkeeping is to use online accounting software. It automates a lot of the bookkeeping for you, so you don’t need to be an accounting expert. You can also get free online accounting software, so it’s worth giving it a try to do your bookkeeping. Also, if you’re a sole trader or landlord, you will have to use some sort of software from April 2024. So you might as well use online accounting software for everything. This is our general guide on how to use online accounting. For specific guides see our software reviews.

online accounting software
Traditional Cashbook. Photo by Pixabay


Getting your bank transactions in

The heart of any online accounting software is the banking and this is where the investment really pays off. Most online accounting software can automatically import your bank transactions – they just appear! If not you can download a CSV/Excel bank statement from your online banking, then upload it into your online accounting software. Otherwise, you can manually enter transactions but that’s not going to save you any time.

Dealing with your bank transactions

Once your transactions are on the software, you then need to tell the software what to do with each transaction. We call that categorising it, but others call it explaining, reconciling, adding, tagging, labelling. Whatever it’s called it’s the process of allocating that transaction to the correct place or ‘account’. That could be Sales for income. Payments could be to Telephone, Travel, Rent, Materials, Wages etc. There are some really nifty timesaving tools in this part of the process. Some online accounting software learns from what you did with a similar transaction before and automatically suggests doing the same again. Some also allow you to set up bank rules, where if a transaction meets the criteria you set, e.g. the payee is Vodafone, the software will automatically put it to the Telephone account with standard rate VAT selected.

online bookkeeping software
Dealing with transactions (Xero)

Checking that the bank is reconciled

The bank balance on the online accounting software at any date, should always agree with the bank balance on your bank statements at the same date. This is what we mean when we say the bank is ‘reconciled’. If you have an automatic bank feed, you still need to regularly check that the bank is reconciled, very occasionally the feed has gaps and duplications. This can also happen if you import bank statements using a CSV/Excel file – overlapped or missing transactions. It easily happens if you enter bank transactions manually. Some online accounting software has a separate Reconciliation feature, where you enter the bank balance for a date then compare/tick off the transactions on the software until it agrees. Others, like Xero, does it all together so you effectively reconcile the bank as you categorise the transactions.

Check the bank balance agrees with statement balance – it doesn’t here (Xero)



It’s a really good idea to create your sales invoices using the online accounting software for several reasons. By doing this, you’re updating your online accounting software with the sales you’ve made. So it saves you from recording your sales again. A lot of online accounting software has an app you can use on your phone or tablet. So you can create a sales invoice while you are away from your computer before you forget! You can also email the sales invoice to customers and set up a payment service so the customer just clicks a button on the invoice to set up a payment. To save you from chasing payment, you can set up automatic reminders to do that for you. Finally, can run a report to show you exactly who owes you money, email statements, and chase customers yourself if necessary.

When you receive the money into the bank account, you need to match the income against the sales invoice. If you categorise the income to sales, you will have a duplicate amount in sales and an unpaid sales invoice.

Entering sales invoices is usually very easy, and looks just like a conventional invoice. Just complete all of the boxes in the usual places then click save.

Sales invoice (Xero)


You should also be able to enter purchase invoices (or bills). This will help you keep an eye on how much you owe to suppliers. Similar to sales, you will need to match bank payments to the bill rather than categorising the bank payment to the type of expense. Otherwise you will end up with a duplicate cost, and an unpaid bill.

Entering bills is usually very easy. Some online accounting software use a bill layout so you know exactly what to enter where, others use a one line format to make it quicker to add more than one bill.

Payroll using Online Accounting Software

Why use the built in payroll?

Most online accounting software has a payroll facility. You might need to upgrade or pay for an add-on to use it. The advantage of using the payroll provided with your online accounting software is that it does the bookkeeping for you. It will put the wages, NI, and pension costs to the appropriate cost category. It also puts the amounts payable to the appropriate liability category. So it gives you accurate accounts without the need to make manual adjustments called journals.

Avoid duplication

If you use the payroll facility, or if you use journals, the actual bank payments will need to be categorised to the liability account, such as wages payable. Otherwise, you will end up with duplicate amounts in the cost account.

How to use the payroll facility

Using the payroll facility isn’t as easy as banking or invoicing. So we suggest you watch or read guidance provided by the software. You will need to enter general settings such as the reference numbers, pay calendars, whether the employment allowance can be claimed etc. Then you will need to add employees with all of their data and pay details. Once set up, every month/week you will start a ‘payrun’ check the pay and deductions for each employee, then update it. The software will normally automatically send the necessary reports to HMRC. You will need to send payslips to employees and physically pay employees and HMRC.


There are various reports you could run to help you check the bookkeeping looks ok, and to see how well the business is doing. You will be able to set the report dates to the period or day you want to look at.

Profit and loss account

The profit and loss account, or the income and expenditure report, shows you all of the sales, income, and costs of a business. Use this to see how much profit the business has made, to estimate how much tax you might have to pay. You can also check that there are no obvious errors with the bookkeeping e.g. are sales double what they should be because you use sales invoices and the bank income also goes to sales?

online bookkeeping software
Profit and Loss (Xero)

Balance sheet

The balance sheet lists all of the amounts that the business owns, is owed, and owes, on a particular date. It owns equipment, stock, bank accounts. Customers usually owe money to the business (trade debtors), and suppliers might owe services to the business (prepayments). The business could owe suppliers money (trade creditors), owe customers services (deferred income), owe HMRC money (taxes payable), and owe the owners money (directors loan account, shares, profit reserves). You can use the balance sheet to check that the balances are what you expect them to be. For example, the bank balance agrees with bank statements, and trade debtors agree with how much you think customers owe you. If you’re a company, you can also use the ‘retained earnings’ at the bottom to judge how much profit reserves are in the company from which you can pay dividends.

Balance sheet (Pandle)

Aged Receivables and Payables

Aged receivables, aged debtors, amounts receivable, are all the same thing. They list the amounts that customers owe to the business as at a certain date. It is usually retrospective, so if the customer has paid an invoice after the report date, the invoice will still show as unpaid on the report. Aged payables, aged creditors, amounts payable reports are all the same as above except it shows the amounts owed to suppliers. You can use this report to check that the bookkeeping has been done correctly. The amounts shown should agree with reality.


To various degrees of usefulness, the cashflow report should show how much money has come into and gone out of the business, and where. It will be similar to a profit and loss account except it is based on the payment of invoices and ignores the invoices. You could use this to help explain why your bank balance has changed. For example, you’ve made a profit but the bank balance is much lower, the cashflow reports shows that the money received from customers is lower, and the amount of tax paid is higher.

VAT returns

Using online accounting software makes it very easy to submit your VAT returns. You just need to make sure you select the correct VAT rate as and when you enter transactions. Then check the details on the VAT return before clicking ‘submit’ to HMRC.

General ledger

The general ledger lists all of the transactions grouped by account/category for the dates selected. This is useful report to check that every transaction has been put to the correct account.

Other useful features of online accounting software

Depending on which online accounting software you use there may be other features to help you with the bookkeeping.


Your software may provide a mobile app as well as the full desktop version. The app will be useful for updating things while away from your desk. Such as reconciling bank transactions, creating and sending invoices, taking a photo of receipts and bills.


An expenses facility is a useful way of adding the costs that you incur personally. Such as business mileage and travel costs. However, if it costs extra there are other ways to make this easy, such as setting up a ‘dummy’ bank account just to enter your expenses.

Stock management

If you buy and sell stock, you may want to make use of the stock or inventory management feature. This will automatically update the number of items you have when you buy and sell them. You can also enter values so the invoices are easier to create, and you can get a value of the stock held.


Journals are manual adjustments to your accounts. You usually wouldn’t need to use this but it could come in handy. If you find a mistake in your bookkeeping, rather than correcting lots of transactions it could be easier to make an adjustment. However, you need to know your debits from your credits! Debits increase a cost account, reduce an income account, increase an asset account, and reduce a liability account. Credits do the opposite of the above. Every journal needs to have total debits that equal total credits, so that the accounts stay balanced.

Journal (Xero)

Fixed Assets

Fixed assets are the things used by the business in the long term. Such as a van, a computer, big tools, office furniture. If you’re keen to keep a list of the business’s equipment, you could use a fixed assets feature. This should be tied in with the payments/bills that you’ve categorised to a fixed asset account (e.g. computer equipment). So hopefully, you just need to add a few details, then add the item to the list. Then if you’re really keen, you can set up the depreciation adjustments. Depreciation is an adjustment that reduces the value of the fixed asset and reflects that as a cost to the business. So the full cost of the equipment isn’t shown on the profit and loss account straight away, it is spread out over several years.

online bookkeeping software
Fixed assets (Xero)

Chart of accounts

This is the list of all of the accounts/categories used by your online accounting software to do the bookkeeping. Here, you can edit the accounts (name, VAT rate), add new ones, or remove ones you don’t need. If you add new ones, check that you select the correct type (e.g. income, costs, asset, liability).


Hopefully you have found this a useful general guide on using online accounting software to do your bookkeeping. If you have any questions you can ask us or your particular software provider.

MTD for Income Tax (Making Tax Digital) will become compulsory soon. You will probably be wondering: What is MTD for Income Tax? Does MTD for Income Tax apply to me? When will MTD for Income Tax start? What do I need to do for MTD for Income Tax? This post will address all of your questions about Making Tax Digital for Income Tax.

MTD for Income Tax

What is MTD for Income Tax?

MTD stands for Making Tax Digital. It already applies to VAT returns. Soon, MTD will apply to Income Tax. Under MTD, HMRC requires businesses to keep digital records of their transactions. Then those businesses need to submit the totals of the transactions to HMRC using software. There must be a digital link between the transactions and the totals submitted to HMRC. Digital link means that you can’t re-enter or copy and paste amounts, the software must be ‘attached’ to the total of your transactions. You can still have paper invoices and receipts, but you will need to enter them into accounting software or a spreadsheet with a formula for the totals i.e. =sum(cell:cell).

How often are MTD reports required?

For Income Tax, the MTD returns will be quarterly and annually. All businesses will need to prepare reports to the tax year (5th April) and the tax quarters (5th July etc). There will be an option to change these to the month end just before those dates (31st Mar, 31st Jul etc).

Does MTD for Income Tax apply to me?

MTD for Income Tax will apply to most sole traders and many landlords. However, sole traders and landlords will be exempt if annual sales/rents are less than £50,000 (£30,000 from April 2027). The limit is per person, so if a property is jointly owned, you can halve the rental income when testing for the £50,000/£30,000 limit. When testing the £50,000/£30,000 limit for a particular tax year, you need to go back 2 years. So use your income that was included on the tax return that was due just before the tax year starts. So your income for the 2023/24 tax year will determine whether you are exempt or not for the 2025/26 tax year. That’s because it’s due by 31st January 2025, a few months before the start of 2025/26.

If annual sales are less than the VAT registration threshold (currently £85,000), only two amounts will be required. They are total income and total expenditure. However, you should also keep categorised totals to help check that there are no errors or omissions. Balance sheet amounts are not required.

When will MTD for Income Tax start?

Unless you are exempt, you will need to comply from 6th April 2026 (was 2024 but it was delayed by 2 years). The first quarter ending 5th July 2026 will need to be submitted by 5th August 2026. The returns and deadlines will be quarterly thereafter. The first End Of Period Statement (EOPS) will be for the year ending 5th April 2027 and will be due by 31st January 2028.

What do I need to do for MTD for Income Tax?

Change your year end to 5th April or 31st March

All sole trader businesses and landlords will need to prepare accounts to the tax year 5th April. There will be an option to change this to 31st March. If you currently prepare accounts to a different date, you will need to have a long period to change it to the tax year as soon as possible.

Get your Overlap Relief for MTD

If you need to extend your accounting period to end on the tax year end, it may mean that you have a higher tax bill than expected. However, you will be able to claim overlap relief. when you first started trading you will have had some profits taxed twice due to an overlap of periods. That’s because the first year would have been taxed up to the tax year end, the second year will have been taxed to the full accounting year end. You will be able to claim overlap relief which will reduce your taxable profit. You will need to contact HMRC to ask for the amount of your overlap profits, unless you or your accountant has a note of it.

Use Accounting Software for MTD

The easiest way to comply with MTD is to start using accounting software, such as Pandle (free or we can get Pandle Pro for £2.50pcm). Xero, QuickBooks and FreeAgent are other good options. After entering or importing your bank transactions, you just need to categorise each one. You can import using a CSV bank statement or an automatic bank feed. Then at the end of every quarter you will be able to simply click a few buttons to submit your MTD update to HMRC.

Or use Bridging Software for MTD

If you don’t want to use full accounting software, you could use a spreadsheet together with bridging software that will submit the totals of your spreadsheet to HMRC. You will need to direct the bridging software to the correct totals on your spreadsheet every quarter.

Retailers Need Daily Records for MTD

If you have a retail business, you don’t need a digital link back to every individual sale. However, the digital links must start from daily sales totals, not weekly and not monthly.

Keep separate records for separate businesses

If you are a landlord and have a trading business, your landlord records will need to be separate from your trading records. If you have more than one trade, you will need to keep separate digital records for each trade.

Cash or Accruals Basis for MTD

Quarterly updates can be on either the cash or accruals basis. If you qualify to use the cash basis, you can use the cash basis for The End Of Period Submission (EOPS), or you can use the accruals basis. The EOPS doesn’t have to be on the cash basis if the quarterly updates are cash. You adjust the EOPS with accounting adjustments (such as private use adjustment), so it will be different to the totals of the 4 quarterly updates.

Can I avoid MTD for Income Tax?

Not unless you are exempt – see above Does it apply to me section. You could transfer everything to a company. However, you may have to pay capital gains tax and companies are also in the pipeline for MTD but not until 2026 at the earliest.

Can accountants submit MTD returns?

Yes, we already submit MTD VAT returns and we will be offering to submit quarterly and annual MTD for income tax reports. Sole traders will need to be on our Quarterly packages. Landlords will need to be on our Investor+ tax return package. Click below for our prices and an instant quote.

We are Lime Books accountants. If you use or want to use Lime Books as your online accounting software, we’ll help you use it. We will also do your accounts and tax returns etc based on your accounting records on Lime Books. All of this is included in our low fixed monthly fees. You can see our prices or get an instant quote. This is our Lime Books review as of 1st July 2022.

Lime Books Review

What is Lime Books

Lime Books is relatively new online accounting software. It claims to automatically analyse your bank statement in seconds, and export your analysed bank accounts as a spreadsheet. As we found below, it’s not quite full accounting software (i.e. with double entry where everything balances). It simply provides a way of mainly categorising all of your bank transactions, and listing all of your sales.

Is Lime Books any good?

This page is our Lime Books review. If you’re looking for a quick answer, it’s yes, but only as a bank analysis software, not as full accounting software.

How much does Lime Books cost?

As explained above, Lime Books isn’t full accounting software which is reflected in it’s low and unusual pricing structure of 5p plus VAT per transaction. So if you have 50 transactions per month, it will only cost £2.50 per month plus VAT. For comparison purposes, we can get Pandle Pro for our clients for the same amount, however, Pandle is not as easy to use but it is full accounting software. So if you just need an easy and cheap way to analyse your bank statements 5p per transaction is good value. Our Lime Books review rating for cost is 5/5.

How easy is it to use Lime Books?

Setting up

Setting up Lime Books was very easy. After registering, you follow a set up wizard which imported data from Companies House (only for companies) and asked for other details e.g. VAT and PAYE.


It was easy to add a bank account, you just need your opening balance to hand. We had a good experience with importing CSV bank statements. Both HSBC Business and Lloyds Business account imports worked fine. There is no facility to read PDF bank statements. Once the transactions are imported you have to manually categorise each transaction. Nothing was selected automatically, although the ‘analyser’ may learn so the more you use it the more automated it gets, we don’t know yet. We like the way it automatically selects the VAT code based on the account selected, and also ticks the transaction for you so it’s ready to bulk post, which saves time. We couldn’t see a way to bulk categorise transactions. You can select ‘transfer’ as a category but it doesn’t let you select the other bank account and it just treats this as another income or expenditure category. There wasn’t a way of matching income to a sales invoice but there is a Cash (Sale already recorded) category, however that just appeared as an expense category. There is a useful Reconcile feature to help you check that the balance in Lime Books agrees with your bank statement.


Sales were quick and easy to add but there was an issue dealing with the bank income relating to those sales invoices. As mentioned in the banking section, there isn’t a way of matching bank income to a sales invoice. Trying it from the other direction, you can add bank income to a sales invoice, but it doesn’t ask which bank it was received in, so we don’t know what happens to that amount, we couldn’t find it! We couldn’t see a way of adding purchase invoices except for travel expenses. So all other costs will need to entered as and when they are paid.


As explained above this isn’t full accounting software, so if you are trying to use it like that you’ll find it difficult! However, as a simple bank analysis software it’s quick and easy. Our Lime Books review rating for ease of use is 4/5.

Reports on Lime Books

There are only a handful of reports: Travel claims; Unreconciled transactions; Bank transactions; Income & expenditure; Category report; Sales; and interestingly an Analysed Report. The Analysed Report looks like how we used to categorise bank transactions on paper or using a spreadsheet. It lists all of the transactions, then shows the amount for each transaction under one of the many category columns. This would be a useful report to provide your accountant. As the software is fairly limited, there aren’t any more reports to provide. The reports can’t be tailored and there are no comparatives. Our Lime Books review rating for reports is 4/5.

Other features

VAT Return

We couldn’t fully test this but it looks like a fully functional VAT return which you can use to submit to HMRC complying with the Making Tax Digital (MTD) rules. There is also a quick an easy way of viewing the transactions that make up the amounts on the VAT return.

Travel Claims

This allows a quick and easy way to record expenses that don’t go through a bank account such as mileage and food.

Our Lime Books review rating for other features is 3/5.

Overall Lime Books Review

If Lime Books was trying to be full accounting software, it would be receiving a low rating due to it’s limitations. However, it’s simply providing a useful bank account analysis tool. This will still be useful for small businesses who aren’t required to produce accounts more than once a year. Our Lime Books review overall rating is 4/5 (bank analysis only).

We are Pandle Accountants. Many of our clients use Pandle’s free online accounting software to do their bookkeeping. We also do bookkeeping for our clients using it. So we can help you use it for low fixed monthly fees, which you can see here or get an instant quote here. Here is our Pandle Review.

Pandle Review

What is Pandle?

Pandle is free online accounting software. It’s an online tool for small businesses to use to record all of their sales, purchases, and bank transactions. It has most of the tools a small business needs from online accounting software. Pandle Pro is a premium version which comes with extra features such as automatic bank feeds – your bank transactions are imported.

Is Pandle any good?

This page is our Pandle Review, which gives our detailed opinion on Pandle’s online accounting software. If you’re just looking for a quick answer, then Yes! We rate it 4/5.

How much does Pandle cost?

Pandle is fantastic value for money, even at the full Pandle Pro price of £5 per month plus VAT. We can get Pro for our clients at just £2.50 per month plus VAT, which is still cheap for online accounting software. If you have few transactions, the free version probably has all of the features you need. Our Pandle Review for cost is 5/5.

How easy it is to use Pandle?

Like most other online accounting software, you need enter or import your sales invoices, purchase bills, and bank transactions. Then you need to categorise each bank transaction. You do this by either matching it with an invoice or bill, or by selecting an account for it to go to e.g. travel expenses. It’s quite slow and not very intuitive, but once you get used to it it’s fine. See below for details on each of the main areas of use. Our Pandle Review on ease of use is 3/5.

Sales and Purchase Invoices

It’s easy to add a sales/purchase invoice. Just click on Customers/Suppliers, Customer/Suppler Invoices, New Invoice. Enter all the details then Save. The customer invoice is laid out as an invoice. A supplier invoice is entered in one line, so it’s easy to add more than one at a time before saving. If you want the invoice to recur, you have to go to another place to set it up – Tools, Recurring Transactions.

Bank Transactions

All of the banking functions are accessed quickly and easily by clicking on Banking and Bank Accounts.

Pandle Review

Bank Feed

Setting up a bank feed is easy and it will save you a lot of time. When you add a bank account you can select how to get your transactions into Pandle. Either Manual (entering each one), File Import (with a CSV file of your transactions) or Bank Feed (automatic import). After setting it up, you can change the method by clicking on the Entry Method for that bank account. Select the Bank Feed then Connect Bank Account. Choose your bank then the directions may vary. Usually you are given a QR code to use with your phone’s camera. This will take you to the app on your phone where you can authorise the bank feed. Back on Pandle, it will ask you when to pull transactions from i.e. the first date to start importing transactions.

File Import

The next best option to get your transactions into Pandle is with a File Import. You’ll first need to download your bank transactions from your online banking account. Usually in a CSV format. Then in Pandle alongside your bank account click on the blue File Import button. Choose your bank, then drop or find your file with the transactions on. Hopefully that’s it. However, this didn’t work for us with HSBC or Lloyds, despite them both being listed as having a template ready to use. We had to set up a custom file import which was a little tricky. See here.

Categorising Transactions

Once your transactions have been imported, you need to click on the green tick button alongside the bank account. Then each transaction needs to be categorised to an account, or matched. You can match it to an invoice or bill by changing the type to a Customer Receipt or Supplier Payment, then selecting the invoice or bill. Once you’ve done that, you tick the confirm boxes, then Confirm Checked. This process isn’t as intuitive as other software like Xero, and it’s quite slow. Also, if the amount doesn’t exactly agree with the invoices or bills, there’s no quick and easy fix. You may have to split the transaction first, or apply a credit note before matching it.

If you have transfers from one bank account to another bank account on Pandle, we found it was too easy to end up with duplicate transactions. You need to follow the instructions carefully to get these right.

Bank Rules

We really like the Bank Rules feature which will automatically assign the category and VAT rate etc if the transaction meets the rule. For example you can set up a rule that if income has interest in included in the description you can set it up to put that transaction to interest received account with no VAT. To set up a bank rule you can click on the green overflow button alongside the transaction.

VAT Returns

VAT returns are relatively easy to run and submit. Go to Reports, VAT Returns, Add New VAT Return, then enter/check the dates. To view the details making up the total isn’t as easy as it could be. There is a magnifying glass button next to the sales VAT and purchase VAT amounts, which opens the details, but only shows 10 lines per page, cuts the details off after about 18 characters, and seemed to show the whole history rather than just the period of the return. To get a full detailed report you have to save and lock the return, which takes a while. Then you can download a PDF. If you spot an error, you then have to unlock the VAT return to fix it.

Reports on Pandle

There aren’t many reports on Pandle and they are quite basic. Also, you have to wait for some of them to be generated in the background then come back and download it when it’s ready. If you like a lot of reports that can be customised (e.g. to also show amounts for the previous period), you’ll need to look elsewhere (e.g. Xero). Having said that, most small businesses only need the basics, so what Pandle offers should be sufficient. Currently, you can quickly access the following reports: Profit and loss; Balance sheet; Trial balance; Cash flow; Receivables; Payables; VAT Returns. You can also request the following reports to be generated: Customers; Customer invoices; Suppliers; Supplier invoices; Transactions; General ledger. Our Pandle Review on reports is 2/5.

Support and other features


They provide many guides and product tours to help you use their online accounting software here. A chat facility is also available most of the time and is fairly quick to respond. We couldn’t find a support email or telephone number.

Receipt Uploads

A handy feature we like on the Pro version, is the Receipt Uploads, where you can upload and attach a PDF or image of an invoice or receipt, then attach it to the corresponding transaction. That means you’ll be able to find the attachment easily by find the transaction on Pandle. This is also on the mobile app, so it’s easy to take a quick photo of a receipt using your phone then upload it.

Pandle Mobile

The mobile app is really handy for a few quick basic functions. You can deal with simple bank transactions, enter and send invoices, upload receipts/invoices, and view some basic reports. It’s good to have especially for the receipts upload.

Our Pandle Review of support and other features is 4/5.

Overall Pandle Review

Overall our Pandle Review is 4/5. This was pushed up to a 4 because we think Pandle offers fantastic value for money. It’s not perfect and doesn’t have all the features or reports, or the speed of Xero and Quickbooks. However, for free or for £2.50 per month from Pandle Accountants like us, it’s well worth trying. At CloudBook Online Accountants, we help our clients with whichever online accounting they choose to use, all for a low fixed monthly fee. See our prices or get an instant quote below.

Cheap accountants

1. Use free online accounting

Pandle is online accounting software helping to save business costs for many small businesses. It’s an online accounting service which has a completely free version which has most features a small business needs from accounts software. It also has a Pro version which comes with automatic bank feeds. We can get Pandle Pro for our clients for just £2.50 plus VAT per month.

With online accounting, you can log in from anywhere to access and update your accounts.  There’s no need to update the software or backup your data because they do this for you. You can give your accountant access to your account, then they can log in at the same time as you, to view, fix, and advise you throughout the year, then easily and quickly produce year end accounts. You should also save business costs on your accountant because you’re making their job easier. See more benefits here .

Why pay hundreds of pounds on software installed onto your computer, or waste hours messing about with spreadsheets that don’t give you many instant reports?

2. Do your own bookkeeping

Online accounting has made it so much easier to do your own bookkeeping, you don’t even need to enter anything. You can either sync directly with your bank accounts, or you can download your transactions from online banking, then upload them to the software. All you need to do is tell the software where to put each transaction. 

You can then produce many useful professional reports as often as you like, helping you run your business smoothly.

Save business costs on a bookkeeping service, by quickly and easily doing it yourself.

3. Use Online accountants

In the age of ‘cloud-computing’ it has become easier and cheaper to set up and run your own business. Some accountants are taking advantage of this, moving from traditional offices to a more cloud-based service. They are probably based away from the high street or even at their homes, communicating online and meeting via videocalls. With much lower overheads, their fees should be much lower, yet you should get the same standard of service if you use fully qualified and experienced accountants. So you save business costs while still getting a great service.

Combined with the use of online accounting, some of these ‘new breeds’ offer a fixed price menu of services, payable in easy monthly instalments. So you know exactly what you will be paying, unlike the more traditional method of charging you by the hour, where the accountant can be rewarded for working slower!

Why pay hundreds of pounds more for an accountant working in a nice high street office?

CloudBook Online Accountants have been online accountants since 2013 and can help you save business costs

What is a directors loan account (DLA)? How do I use a DLA? Also, how do find out how much is in my DLA? Then what happens if I don’t repay my DLA? These are all questions every company director should know the answers to. If not, read below.

CloudBook Online Accountants, since 2013, are specialists in online accounting such as Xero, QuickBooks, and Pandle. To get the most out of your software you need experts like us to help you throughout the year. We include help with the the software in our cheap monthly fixed fees.

directors loan account

Directors Loan Account

What is it?

A DLA is where you categorise non-business transactions between a company and its director. The balance in a DLA shows how much the company owes the director (credit balance). Or how much the director owes the company (debit balance). If a director owes money to the company, you can call this an overdrawn directors loan account.

How do I find my DLA balance?

If you use online accounting software (you should!), run a report called a Balance Sheet or Trial Balance. You should find a line for the Directors Loan Account, or Shareholders Loan, or Owners Funds. or something like that. On a Trial Balance, if it’s in the debit column, that’s bad – you owe the company money (overdrawn DLA). If it’s in the credit column, the company owes you money, which is good. On a balance sheet, if it’s a positive balance in the Creditors/Liability section, that’s good. But if it’s positive and in the Assets/Debtors section, that’s bad. Obviously, reverse those if the balance is negative.

If you don’t use online accounting, you’ll have to take the DLA balance from the last set of accounts prepared, then adjust it for all the DLA transactions since then. Good luck! Did we mention online accounting?!

Tax on an Overdrawn Directors Loan Account

It’s important to know how to record a DLA properly and to check its balance. The reason being, is that an overdrawn DLA at a year end can cost the company 33.75% tax (was 32.5%) on the balance. So, let’s say a director owes money to the company at the company’s year end. The director has 9 months following the year end to repay the loan back to the company. If it’s not repaid, the company will pay tax at 33.75% of the balance still owed to it 9 months after the year end. A company receives a refund of that extra tax, 9 months after the year of repayment (or reduction).

Another tax implication, is if a loan to a director (or any employee) exceeds £10,000. If it does, interest needs to be charged at the official HMRC rate. Otherwise, that loan is taxable on the director as a ‘benefit in kind’ and they’ll pay 20% or 40% tax on the interest that should be charged.

How do I use a Directors Loan Account

Company transactions

If a company makes a payment to a director, that is not wages, expenses or dividends, because it’s not for a company cost, categorise the payment to the DLA (debit).

Also, categorise a payment/bill (debit) to the DLA if the company pays for something on behalf of the director because that’s like giving the director money. For example, personal expenses put on a company credit card.

You should categorise income (credit) to the DLA if the company receives money on behalf of the director because that belongs to the director not the company.

If you don’t pay the full amount of dividends directly to a director/shareholder, you should categorise them (credit) to the DLA. The transaction date becomes the dividends payment date.

Director transactions

If a director pays out of their own pocket for the company’s costs, or incurs expenses on behalf of the company, the company should debit the expense category and credit the directors loan account.

If a director receives income on behalf of the company, the company should record that amount as a credit against sales/vat/debtors and a debit against the DLA.

Actual loans between the director and the company are also DLA transactions. So categorise them to the directors loan account.


Online Accounting Software

Recording a Directors Loan Account is easy when you use online accounting software. There are many other benefits to using online accounting software which you can read about here. We are Xero Accounting specialists but we don’t make you use any particular software – choose your favourite! We can also help you use your choice of online accounting software to record a DLA. See some other online accounting software we support and you can see our fixed fees here.



Online accounting software has revolutionised the way accountants provide accountancy services. Businesses should get a better and cheaper service from their accountant by using online accounting software. It makes it easier to do your accounts, both the bookkeeping and then converting the online bookkeeping records into accounts. Read about 10 of the many benefits of getting your accounts online below.

In fact, HMRC will soon make it mandatory to use online accounting software, by requiring quarterly submissions of data. Making Tax Digital is already here for VAT registered businesses. It will soon be required for Income Tax, then Corporation Tax. Don’t worry if you’re not yet using online accounting software. We can help you move onto any one of them that you choose. Such as the free Pandle or the easy to use Xero.

online accounting software

Still need convincing?…

10 benefits of using online accounting software. 1-3:

More benefits of using online accounting software. 4-6:

Even more benefits of using online accounting software. 7-10:

How we can help you

We are online accounting software specialists. We’re committed to giving you a better service for less, by utilising all of the benefits of online accounting. Plus we’re not tied to any particular software provider such as Xero, SageOne, or Kashflow, so you’ll get honest independent advice on which is best for your business. If the free one, Wave Accounting, is all you need then why pay for something else?

All of our accounts clients get free help moving to online accounting software, and free help throughout the year. See our fees, or contact us by clicking the buttons below.

Cheaper accounts are here! For as little as £20 per month plus VAT, you can now have a great and efficient accountancy service from CloudBook Accountants.

What’s included?

Our new more basic ‘Annual’ package includes:

Who is it for?

This new cheaper accounts service is available to businesses who already use online accounting and just need the basic service from a fully qualified, experienced accountant. For those that may need more help throughout the year, our Annual+ package is just an extra £10 plus VAT per month, and comes with unlimited general advice and quarterly reviews of your online accounting records.

How can we offer cheap fixed fees?

Firstly, we do everything online, from signing you up to signing your accounts off – see how we work. It’s easier and a lot more efficient, so it takes us less time overall to provide services to you. Secondly, online accounting has improved immensely over the past few years. If used well, it usually makes the task of preparing your accounts and tax returns simpler. It also means it doesn’t take us much longer to prepare accounts for a larger business with tidy online records, than it would for a smaller business. So we can offer the same fixed fees to virtually all businesses that use online accounting well.

Why now?

CloudBook Accountants launched back in 2013 as an online accounting specialist. At the time, online accounting was still relatively new and many businesses were making their first move online from manual or desktop accounting. Today, we recognise that the majority of small businesses are now reaping the benefits from online accounting and have been doing so for some time now. As such, those businesses probably don’t need as much help as before with their online accounting. That’s why we’ve launched this more basic package.

Cheaper Accounts

The new Annual package is priced according to the following business types:

Contact us now to start benefiting sooner from our cheaper accounts package.

Directors Loan Account in Xero

directors loan account in xero

Xero Accounting are leading the way in the UK with online accounting software. In our opinion Xero is the best and easiest to use online accounting software for small businesses. Recording a Directors Loan Account in Xero Accounting is easy. See our Directors Loan Account page for more details about what it is. If you need specific help with Xero, we are Xero specialist accountants – see our fixed fees.

Setting up the Directors Loan Account in Xero

Xero provide by default a Directors Loan Account (830). However, it will be much easier to avoid using the default Directors Loan Account in Xero account except where it is the only option (e.g. when using Xero Payroll). Instead, we suggest you add a credit card account and call it a Directors Loan Account. By doing this, it becomes much easier to add expenses directly to the Directors Loan Account in Xero, and transfer money to/from it and the company bank accounts. Here is how you set it up:

Click on Accounts, Bank Accounts, then Add Bank Account. Type into the bank search ‘Directors Loan Account’ it won’t find a bank called that so you can then click on Add it Anyway. Type ‘Directors Loan Account’ again in the Name, choose Account Type: Credit Card, then enter any 4 numbers for the credit card number. Finally click Save.

That’s it, you can now use your new Directors Loan Account from the Xero Dashboard to add your expenses (spend money) and record transfers (transfer money) to/from the Directors Loan Account in Xero.

Entering transactions in the Xero Directors Loan Account

It’s very easy to enter transactions to the Directors Loan Account in Xero when it is set up as described above. As with Wave, you need to ask yourself – has the transaction gone through a company account e.g. company bank account or company credit card which is recorded on Xero?

Company Transactions

If the transaction has gone through a company account, we are assuming that you have a bank feed set up or you have uploaded bank statements:

  1. Go to the bank account
  2. Click on Reconcile
  3. Find the transaction
  4. Click on Transfer
  5. Select the Directors Loan Account
  6. Edit the reference if it’s not clear
  7. Click on OK

Director Transactions

If the transaction has not gone through a company account, and there is no bill or sales invoice for it in Xero:

  1. Go to the Directors Loan Account in Xero
  2. Click on Manage or Manage Account
  3. Click Receive Money if the amount was received by the director
  4. Or click Spend Money if the amount was paid by the director
  5. Enter the details: to, date, description, amount
  6. Select the appropriate account – usually a Revenue or Expense account
  7. Click save

If the director paid or received a bill or sales invoice that’s already on Xero: Find the bill or sales invoice; go down to the section ‘make/receive a payment’; enter the details and select the Directors Loan Account; then click on Add Payment.

Checking the balance of the Xero Directors Loan Account

To check the balance of a Shareholder or Directors Loan Account in Xero, there are a few ways: