Thousands of Armstrong Watson clients are moving into the world of cloud-based accounting as the major Cumbrian firm invests in new technology to help clients in the digital age.

Armstrong Watson, which has 16 offices across Cumbria and the UK, is using new online software to help 5,000 of its business clients.

It makes Armstrong Watson the largest independent cloud-based accountant in the UK.

Xero allows clients and staff from Armstrong Watson to log in to their accounts online and monitor income and outgoings in real time.

More than 100 staff from the company underwent three days of training at the North Lakes Hotel, in Penrith in March to learn how the new system will help customers.

Richard Andrew, head of the accounting service line for the company, said it was making the move partly to prepare for HMRC Making Tax Digital scheme, which will take effect in 2019.

“This will see HMRC requiring four tax returns a year rather than the single one they currently ask for,” said Mr Andrew.

“It’s a much bigger administrative burden for self-employed people. It’s about investing in our staff so they are ready for that and preparing our clients for what’s going to be required of them by HMRC.”

The new HMRC system will mean everybody who fills out a tax return will have a digital online account, where they can keep track of their tax affairs as they happen, rather than making a single calculation every year.

Mr Andrew said Xero was designed to complement this system by making it easier for business owners to update their account information. This would save them time, as well as giving them and Armstrong Watson access to real time data so they can deal with any issues or make suggestions to help their clients.

“It means that there is real time information, which is something that HMRC need, but also what our clients need to help them manage their businesses. It also brings a level of efficiency for both the clients and ourselves,” he said. “You hook Xero into your bank account so that all of the information comes directly into your package and you can have your rules set up so that if you spend money regularly at say, Esso, for your fuel it’s clever enough to know that Esso is always motor expenses and if you are VAT registered it knows there will be VAT on it and claim it back.

“It’s about getting the lazy Sunday afternoons back so you are not spending your afternoons doing your book keeping. It’s about getting time back for yourself. Having that time back will pay dividends whether it’s for you and your family or you and your business.”

Gary Turner, co-founder and managing director of Xero, said almost 200,000 businesses in the UK were already using the system.

“Xero is a small business accounting product and cloud-based so you can run it on your tablet or smartphone. It’s designed to help small businesses manage their invoicing and accounting and cashflow,” he said.

“You would log in maybe on your smartphone in the morning and see the previous day’s banking information has already been imported in. Xero is in touch with all the major banks in the UK and they send us your banking information overnight.

“Most small businesses don’t have the resources and time to invest in learning new ways of working. They are better off spending time running their business.

“Even if the small business struggles with the basics of accounting or they don’t have the time or bandwidth then they can call upon help from Armstrong Watson whenever they need them and they can come in remotely and address that.

“All small businesses will have to make that transition and our focus is how to make it as effortless as possible. It helps Armstrong Watson as a business, but more importantly it helps their clients.”