How AI Is Changing Business: Expert Advice

AI isn’t just for large corporations but for small businesses, too, offering the power to transform operations, improve customer experiences, and boost efficiency. 

One expert in the use of AI for business is Heather Murray, who specialises in training non-technical people in the use of Microsoft Copilot. Heather talked to Sound Advice podcast host Bex Burn-Callander to demystify AI for anyone wondering how to harness its potential in business and daily life. 

With her deep passion and enthusiasm, Murray cuts out all the jargon to make this tech accessible for everyone. In this new digital age, businesses must adapt and keep up with the ever-evolving market changes to thrive, and this episode of Sound Advice can help you do that. 

Key takeaways

  • AI can help small businesses automate repetitive work, improve productivity, and create more capacity without requiring advanced technical knowledge. 
  • Start with clear business goals and low-risk tasks, then expand AI use only after confirming that it delivers useful results. 
  • Better prompts depend on three things: defining the AI’s role, providing enough context, and giving clear, specific instructions. 
  • AI should support human judgement rather than replace it, especially in sensitive, creative, or high-stakes business decisions. 
  • Responsible AI use requires fact-checking outputs, protecting confidential data, watching for bias, and being transparent about when AI has been used. 

Here’s what we cover:

What is generative AI, and can a small business owner use it?#

Generative AI is a type of artificial intelligence that creates new content, such as text, images, code, and ideas, from prompts, and small business owners can use it to save time, improve productivity, and support everyday tasks. 

Bex Burn-Callander:

I was doing some research into the polarising nature of AI and how a lot of business owners feel like it doesn’t even apply to them, that it’s not something that they can use in their day-to-day lives. 

Can we talk a bit about what we mean by AI? Because we’re not talking about these futuristic, sentient systems that have feelings and approximate human beings. We’re talking about a different kind of AI. Do you want to break it down for me, please?

Heather Murray:

Yes, of course. AI itself has been around for a really long time, so it’s pretty much since 1950, actually. Every time you pick up your phone or use your computer or go to the cash machine or walk past the CCTV camera, we are using AI throughout everything. 

There’s lots and lots of different types of it, but the bit we’re all talking about now and the reason that everybody, every conference you go to, the reason that most people want to switch off when they hear AI, the reason that your LinkedIn feed is completely saturated, is generative AI. 

That is something that’s completely new as of the end of 2022, and that is the ability to create something new. 

So generative AI, generate something new, whether it’s a piece of text, an image, a video, audio, music, or voice. There’s so much you can create, and then you can analyse and summarise that information as well. It’s something we’ve never been able to do before. 

Whenever I do a session, I say, “Who’s new to AI?” And I always get a chunk of the room saying, “Yeah, I’ve never used it before.” 

And then when I start to explain that your predictive texts, your email spam filters, everything, that’s all AI already. It’s generative AI that you’re new to. 

Bex Burn-Callander:

And can generative AI, and for our listeners, that’s what we’ll probably be focusing on for most of this chat, can generative AI be used by any kind of business owner? Because obviously, big corporations, you can see the use case, but what about, as I said in my intro, man in van, driving around, drainage engineer—how can generative AI help him in his business?

Heather Murray:

Oh, absolutely. I actually think the smaller businesses and one-man bands, or one-woman bands, have the greatest advantage here. And I am a one-woman band; I run this business by myself. 

You can integrate it into pretty much every part of your life. There are so many use cases both inside and outside of work, but even if we focus on inside work and your personal productivity. 

So how you check your emails, how you manage your diary, how you have your meetings, if you have your meetings online, but if you don’t, there’s also AI for that, too, if they’re outside of that. How you prepare your proposals. Pretty much every business prepares proposals in some way. 

So whether it’s off the back of a phone call, off the back of a meeting that you’ve had, scribbled notes, there’s just something for everything across the board. 

And I always recommend people do start with that personal productivity piece because that’s where you start to see the biggest results and you go, “Oh, I’ve got two hours back then,” or, “that task used to take me four hours, and now, it’s taken me 30 minutes.” 

That’s the magic of it. 

My husband is actually just ending his 26-year career working in hospitality and starting a new business as a dog trainer. So very much not a digital business at all, but I’ve taken it on as a project. I’m working alongside him to make it as AI-first as possible. 

I suppose it’s not bricks and mortar because he’s out in the grass and the parks business, shall we call it, but you can apply AI to so many parts of that. From coming up with his business name and slogan to just digging into who’s his ideal customer. 

We’ll be doing leaflets; who should we be giving leaflets to? What benefits should we be pointing out to them? How is he going to handle his payments and transactions? 

There’s so many things that I can help him with. I can’t think of an actual business type that wouldn’t benefit from AI right now. 

Generative AI tools can benefit small businesses of all types, from brick-and-mortar shops to independent contractors. 

What is modern AI like, and is using it bad?

Today’s AI tools can help you be more productive without requiring a lot of technical skill, and while using AI might sometimes feel like “cheating,” it’s really just a way to work smarter, not harder.

Bex Burn-Callander:

That’s so interesting. Because I’m a journalist in my day job and there was lots of doom-mongering about how my profession would be dead in 10 years, but I thought what I’m going to do is I’m just going to get comfortable with AI.

So I signed up for a ChatGPT account. I don’t use it to do any writing, but I do things like when I finish a piece, I’ll ask ChatGPT to write the same piece because it’s a useful way of seeing what I’ve missed.  what I’ve missed, or if I’ve missed any glaring errors.

I would never use it for facts or sources or data at this point.

But then I also had to do a PR and marketing plan recently, and I just made ChatGPT do it because I’m so bad at writing formal proposals.

I had to edit it quite a lot afterwards, but that was a real game-changer.

Heather Murray:

There are so many different things you can use it for. And actually, one thing I want to mention, just as you said that, you said that with almost a bit of shame, “Oh, I cheated with AI,” and actually it’s not.

Just like if you were to do a Google search, it’s a tool like anything else. A tool like the internet is for us, a tool like mobile phones are for us.

If you calling someone, you’re not cheating because you’re not going round to see them face-to-face. I think that’s one of the main stigmas we need to remove is that there is a shame because you think, “Well, that was too easy. Amazing”.

Picking up the phone is too easy compared to going round. Putting something in the dishwasher is too easy compared to washing it yourself. It’s just a progression of technology and I think that’s something we need to get around.

But most people start with Chat GPT. I call them dabblers. And that is honestly the vast majority of people that I work with.

I often work with rooms of 100 people and probably 95% of them will be dabblers, which means that they’ve tried a couple of things, usually ChatGPT.

They might have written an email, and they ask it to be rephrased in some way. So it’s stuff like, “Make this a little bit more friendly or more formal”, or “Give me some ideas for this.”

That’s where most people start because you open it and there are no instructions, so you have to feel your way and work out how to use it.

But there’s a whole world of AI tools out there. So Chat GPT is called an LLM, I hate technical language, hence my business name AI for Non-Techies, but it’s a Large Language Model.

Basically, it’s an AI chatbot, and there are a few of them. There’s Gemini, which is by Google. There’s Claude, which is by Anthropic. There’s Copilot by Microsoft, and there’s ChatGPT by OpenAI. They’re your big four.

They all have different purposes and different strengths and weaknesses, and they’re the best place to start because they’re multipurpose tools.

So start with those chatbots because they can do so much. Of course you can create content, but you can simulate difficult conversations, you can analyse information, you can build plans, you can get expert advice, you can summarise information.

It’s just endless, and it’s usually £20 a month, there’s always free versions when you first start, but that £20 a month is the best £20 I spend all month.

Actually, a little note when you’re saying about using ChatGPT to write or not to write in your case, ChatGPT’s strength isn’t in writing, it’s more analysis and research.

Claude is the one for writers. It’s much more human sounding.

But you start off with the LLMs and then you’d move forward into more specific tools that are designed for a specific purpose. And there’s a whole other group as well.

So you’ve got your LLMs, you’ve got your tools for a specific purpose. You have sales ones, marketing ones, finance ones, all sorts. There are probably hundreds of thousands of them out there at the moment.

Today’s AI tools can be very easy to use for a variety of tasks, and there’s no more shame in using them than there is in using modern appliances instead of doing household tasks by hand.

What tasks should you use AI for?

AI isn’t good at everything, but it’s great at handling repetitive admin tasks that take up too much of your time. 

Bex Burn-Callander:

For our listeners, they shouldn’t just be seeking out AI tools, like looking up so-and-so with AI because that might not add that much value, but they should be thinking about …

Well, maybe tell me the process. Do you look at your work day and think about the things that are manual tasks that maybe aren’t generating a lot of value for the business, but are taking a lot of time, and then look for a tool or figure out a way to use AI to cut that down?

What’s the process to follow?

Heather Murray:

Yes, that’s definitely the right way to do it. I always like to advise people to start with your business goals or your own goals: what are you hoping to achieve.

And then where are your blockers, exactly like you were saying. You don’t need to necessarily think at that stage what’s time-consuming, but AI is brilliant at time-sapping, repetitive admin-type tasks, but it’s also good at others, so I wouldn’t factor that in at that early stage.

So what are your goals? What’s stopping you from achieving those goals? And you’ll find that lots comes out.

And then I tend to use the impact/effort matrix; it’s a really simple matrix, just Google it, or Perplexity if you’re into your AI—that’s the new Google, but we won’t get into that.end to use the impact effort matrix, it’s a really simple matrix, just Google it, or Perplexity if you’re into your AI, that’s the new Google but we won’t get into that. It hasn’t got quite the same ring to it.

But, the effort impact matrix, or impact effort matrix, helps you set out which of your blockers are quick wins, and which are strategic projects.

And the other two sections—it’s in four quadrants—the other two sections aren’t really to bother with because it’s, if they’re high-effort and low-impact, there’s not really much point in doing that. And if they’re low-effort, low-impact, again, not much point doing that, either.

So then you’ve got your list of quick wins and strategic plans, and then you need to look, and see if AI is the answer, because AI is not a silver bullet.

I think a lot of people are trying to plaster and patch problems with AI where it doesn’t fit. It is incredible at some types of tasks, but it’s absolutely horrendous at others. And that doesn’t mean that there aren’t tools in those horrendous areas as well.

So I think people need to start to educate themselves on what it’s actually good at. And like I say, a great place to start is those repetitive admin tasks. If you’re doing something every morning and you’re doing something on repeat, it’s a great case for automation; it’s also a great case for AI.

And I think people often get those two things confused. They’re two separate things, AI and automation. They work beautifully together, but that requires quite advanced knowledge of both.

Using the impact/effort matrix can help you to prioritise your work and determine which tasks make sense to handle with AI. 

When should you avoid using AI?

While AI is good at handling rote work, it shouldn’t be used for tasks that require real human thought, judgement, or empathy. 

Bex Burn-Callander:

And it’d be good to drill down a little more into when not to use AI, because sometimes when customers are expecting a very human response, for example, it’s become quite easy, I think, to know when it’s a ChatGPT or a generative AI response to something. 

Because there’s just a certain cadence, a way of speaking, that is kind of fine and correct, but it lacks warmth and it lacks a certain dimension of humanity, I guess. 

And I know that, for example, certain editors in publishing won’t accept generative AI pitches, because they get so many that have just been journalists going on and saying, “Give me 50 article ideas in this topic” and then sending them off to editors. 

So there are places where you really shouldn’t apply AI. Can you tell me a bit about that? 

Heather Murray:

Yeah, sure. I think anywhere where you’re trying to outsource your thinking. AI itself doesn’t have experience. It doesn’t have opinions. The way it’s trained is on a snapshot of the internet. 

So imagine the internet has stopped and it’s been downloaded and everything’s been mashed together. 

And what it does, it finds patterns, it mashes all that information together, whether it’s image, video, everything, and then it finds patterns within that information, not distinguishing between good quality and bad. 

And then it gives you its best guess as to what you would like to hear. And it’s passable, isn’t it? You think it’s OK, but it’s really hard to put your finger on exactly why. 

I’ve done a lot of work into why, as an ex-copywriter and somebody who ran a copywriting agency as well, I was thinking, “Oh, what is … ?” 

Bex Burn-Callander:

Something jars, doesn’t it? 

Heather Murray:

It does. It’s a recurrence of certain words, like “delve,” “embrace,” “ever-evolving,” those sorts of things. There are some really interesting graphs on the internet that show the evolution of the word “delve,” for example. 

And this was in scientific papers, so these are people using ChatGPT to write their papers. So it sort of naturally kept on a line, and then in 2022 and 2023, it just shoots up. So I think everybody started using it. 

But certain words, certain terms, if you’re good enough, there is a way to get around that and produce human-sounding copy, but in order to do that, you need to know what you’re doing. 

So you need to be a person who’s got a lot of examples of good-quality writing, and the ability to identify good quality writing and describe it as well is very useful. 

A copywriter, with the right instruction, can create genuinely good copywriting using AI, but it needs their skill and their guidance. You need to learn how to instruct it properly, how to prompt. 

When people are talking about the term “prompt” or “prompt engineering,” it’s just the instructions, or more realistically the conversation that you have with AI. 

And that is much more complex than people think. Because it looks a bit like Google, we tend to type in just a short sentence and we’re just like, “Give me five ideas for this,” and that’s nowhere near enough context. 

My prompts are usually half a page to a page long, they’ve taken me hours to write, and I’m attaching five, six different documents for background information, but the results I get are incredible. 

And they really are, they’re indistinguishable from human writing, but it sounds like me because I’ve trained it to sound like me. 

So outsourcing your thinking is definitely not good. Anything with specificity, particularly when it comes to image generation as well. 

You can create these amazing images with just with one word, you put “apple” and you’ll get all these different photographs of an apple. Whatever you want. Your imagination is the only limit with that. 

But you can’t move something slightly in the image. You can’t slightly tweak a colour. It’s really quite random. 

You could put that same prompt in again, and you’re going to get something completely different. Anything where it needs to be very bespoke and specific is difficult, too. So not outsourcing your thinking and specificity. 

I’m trying to think what else. I think it’s just that humanity. Anything that requires sensitivity. I’m saying that, but I think AI is evolving very rapidly in its ability to imitate sensitivity. It’s called artificial empathy that they’re programming it with. 

For my newsletter, I actually joined something called Sonia.ai, which is a CBT [Cognitive Behavioural Therapy] therapist, an AI CBT therapist, with the full intention of absolutely slagging it off afterwards. I thought, “This is going to be so irresponsible. This session is going to be awful.” 

And it’s done by voice. It says, “Lie down.” And I thought, “Well, I’ll give it the best chance.” 

I put the phone on the pillow and interacted with it. And it was genuinely an excellent session. 

I felt that this AI therapist was listening to me and understood, and the questions were really considered, and the exercises I was given to do were really useful. And I felt I made progress towards a better me in that session. 

And that really changed my opinion of AI and sensitivity and empathy as well. So it is possible. 

But it will have limitations, obviously for very sensitive situations, and they need to be qualifying their customers a lot better because I was able to just go in and do this therapy session. They didn’t know what my background was, or my proclivities were or anything. 

So it’s evolving very quickly. I think lots is possible, but it really needs to be in the hands of the human expert.

Bex Burn-Callander:

I can’t believe that about AI therapists. That’s blown my mind. 

But then also, there’s a massive shortage of therapists and there are people waiting years to access any sort of help and counselling. So that’s amazing and maybe a bit wonderful, even if it’s simultaneously quite terrifying.

AI tools are great for handling rote work, but it’s still better to stick with human expertise for tasks that require real thought or empathy. 

How do you craft better prompts to get better outcomes?

Murray says that good prompts are built on the “three C’s”: a character for the AI to take on, contextual information, and clarity. 

Bex Burn-Callander:

But, Heather, I wanted to go back to your point about prompts. So how can we learn? You mentioned that your prompts are half a page long and you attach lots of documents. That’s really fascinating. 

How did you learn how to do that? Was that just trial and error over time, or can I go online and take a course in crafting these sorts of prompts? How do I create better outcomes in my generative AI?

Heather Murray:

Yeah, of course. I’ve got a three C’s framework that I built, and it was off the back of a ton of trial and error, and I mean a ton. I was spending two or three hours every day just learning, learning, learning. 

And as a writer, that gave me a real leg up in how to construct and how to understand, “So I put this in, I get this out, OK.” 

I like experimenting with things as well, so I’m very well suited to doing the job that I’m doing now. 

But I soon found that there were three things that were really important, and I call them the three C’s: character, context and clarity. 

So character, it’s like a roleplay. Every conversation you have with something like ChatGPT or Claude or Copilot or whatever you’re using is a conversation. 

It doesn’t know who you are, and it doesn’t know who it is, but it’s got access to this huge data set. And as we say, this mishmashed information, and it needs to be narrowed down in order to give you the result that you want. 

So if you ask a broad question, you’re going to get a broad and generic answer back because it’s got so much to draw from. It’s like going into the world’s biggest library and just asking for a book. It’s too broad. You need to be really specific as to what you want. 

So character is really useful. If you’re writing some LinkedIn posts, you might say, “Act as,” or, “You are a LinkedIn ghostwriter with 10 years’ experience in generative AI,” even though it’s only been around for two years, this is AI, you can make it up. 

But in doing that, it will say, “Right, I’m going to take from my LinkedIn knowledge. I’m going to take from my ghostwriting knowledge. I’m going to take from my generative AI knowledge.” And you’re starting to narrow down that huge data that it’s able to draw from and get more relevant responses, just in the first sentence. 

You could give that character personality as well, if you wanted to, and say, “You are really impatient,” or, “You are really helpful and warm,” or, “You are very inquisitive and you ask questions”—it depends what outcome you’re looking for. So setting that character. 

Then tell it who you are, because people forget that when we sign up to these chatbots, we don’t answer any forms. You’re just in straight away. You give your email, you’re in. It doesn’t know who you are or what you do. 

A lot of people think that, “Oh, actually, it remembered this about me.” And there are things on ChatGPT that do remember little bits and pieces, but they’re pretty flawed at the moment. 

So just think with every new chat, it doesn’t know anything about you. I would say, “Act as a LinkedIn ghostwriter with 10 years of generative AI experience. I am an AI trainer and I am looking to do X,” and that is a great start to a prompt. So that’s character, set in a character. 

The next is context, so giving enough background. So the analogy I like to use here is, imagine that you’ve recruited an assistant and their job is purely to do this task that you’re trying to do when you’re doing this prompt. 

What information would they need to have to do a good job? You wouldn’t just say, “Write me some LinkedIn posts.” You would say, “Okay, so write me some LinkedIn posts. Here are some examples of LinkedIn posts I’ve done before that I’ve done well. Here’s some information about my audience and what their pains and problems are. Here’s my tone of voice guide. Here’s some information about my product or service.” 

They can’t possibly know that information without being given it. 

And as soon as that clicks, you go, “Of course. Well, how would ChatGPT know that?” 

I think people think ChatGPT or all of these LLMs know everything. And they kind of have bits of everything, but they don’t know which information to select. 

So sometimes you’ve got to wave things in front of their nose. So using that pay-per-click function or the plus function on some of them and adding some really good background information will get you much better responses. 

And then the third thing is clarity. So being really, really specific as to what you want. Don’t just ask for a report; say something like, “I’d like a report that answers these three questions,” and give the questions. That’s always a really good one. 

Or that has these different elements in, like, “These are the section titles.” 

Or actually, and you could go back to context and say, “Here’s an example of two reports I’ve written before,” and it’s going to read those and find patterns in those as well. 

And just being really clear, breaking things down. So using white space, don’t just do a big dense block of text. 

Break things down, “Here is your task. Here is my background. Here are the limitations. Here are some things you need to know.” 

And then also just being really specific, “I would like a table with five columns and these are the headings.” Just explain exactly what you want; because it’s got so much information, it needs you to be specific. 

From running my marketing agency, so any sort of marketers out there, think about a good copywriting brief, for example. It would have all the background information and all those documents. It would have who you are meant to be and what the purpose of this is all for. 

So a copywriting brief would be the perfect prompt as well. So the three C’s.

Bex Burn-Callander:

That’s an amazing insight. I feel like you want to treat it like a work experience. 

Presume no prior knowledge or experience or even the ability to take much initiative; just treat it like briefing a work experience. 

Heather Murray:

Yeah, a really intelligent work experience person, who’s enthusiastic and keen to please and they just need pointing in the right direction. 

And similarly, I think constructive feedback is really important. I watch people prompt sometimes in my classes and they will type something in and they’ll get something back that they’re not happy with, and then they’ll go, “Oh, it didn’t work. Oh, it’s boring.” 

And I go, “Oh, no, no, that’s not the end.” 

You then give constructive feedback, and you say, “Oh, I like this bit. I didn’t like this bit.” Or, “That was too broad. I want you to be more clear.” Or, “I want you to break it down more or add more detail.” 

Just give that feedback in the same way you would with your work experience. You wouldn’t just say, “Oh, that’s rubbish, that’s it. Writing you off.” 

You’d say, “Right, OK, so let’s work on this bit a little bit further.” 

So that’s when it becomes much more, you start with the instructions and then it becomes a conversation back and forth. Hence, having this character that is assuming this role and knows who you are, so it’s going to respond accordingly.

Working with AI is like working with a real person who has access to a lot of information but needs clear instructions on what you want them to do. 

How AI can support small business growth

Murray quickly learned that AI allows non-technical people to accomplish more than they might have thought possible, from creating apps to building customer personas for marketing. 

Bex Burn-Callander:

Well, Heather, you are so passionate about this, and you are so well-informed, and you put it all in layman’s terms so it’s really accessible. 

But tell me how you fell in love with AI, because you are a non-techie and you mentioned a background in copywriting, for example. So take us through the journey that brought you to this point. 

Heather Murray:

Oh yeah, of course. Yeah, definite, non-techie. I never have the latest phone. Some people now look at me when I go and do speaking gigs and if something goes wrong, they go, “Oh, she’s the AI person.” And I look at them and go, “Nope, I do not know how to fix this situation. I’m not a techie person.” 

I think that’s one of the most magical things right now about AI. You don’t need to be technical to use it anymore. We can now interact with just normal human words and we can build stuff. We can build our own apps, we can design stuff, we can create, and it’s just so exciting. 

But I was running the marketing agency and we had a client that came up to us and said, “I’m trying to sell this big high-ticket thing, this £10 million thing. And we are knocking on all the doors and nobody’s responding.” 

So I looked and I said, “Oh, how are we breaking down your audience?” And they were breaking them down by job title, by industry, by pain point, all the usual stuff. 

And I had a little fumble around the internet and entirely by accident came across an AI tool. I didn’t even know it was AI at the time. 

And this tool analysed people’s digital presence, so they’re called digital breadcrumbs, all over the internet. Wherever you have a profile or a bio on a website or you’ve commented on a YouTube or you’ve got a LinkedIn post, it hoovers them all up and analyses your personality and creates this sort of sales playbook for you specifically. 

And at first I was really cynical, thinking, “That’s not going to be great.” There’s going to be five different versions and it’s just going to randomly allocate them. But it worked. 

So we got $60 million worth of pipeline for this company, and then we did it again and again, $15 million more. So this made me go, “Hang on a second, this AI thing.” 

I was a tiny company. My pricing was so low considering the results we got for them. I was just there sitting in my little home office in Birmingham, but that really piqued my interest in AI. 

I’d started to notice and started to research and think, and this was probably early 2022, late 2021. 

So we would pay a little bit of attention, but like everyone else, we were super busy, and just thinking, “Oh, this is interesting.” 

And then ChatGPT came out, and I remember sitting here in this very office and I just thought, “What is this …” 

I had two thoughts. My first thought was, “This is going to kill my marketing agency.” This can do or will eventually be able to do, and I didn’t realise how fast it would move, what my agency does now. 

So much of the kind of persona-building work and all that. People started to do that in-house, and I started to panic. 

But then my second thought was, “I need to learn everything.” This is new. How often are you at the beginning of a new technology? 

And I thought, “I don’t need to know any coding. This is really exciting.” So I also thought this is an entirely new business as well, but I didn’t realise how much it would do. 

I decided to focus and spend a good three or four hours a day, every single day, including Christmas Day, even though I was cooking for a massive amount of people, on that thing. When I get excited about something, I go all in, and I just learned as much as I could. 

So I ended up travelling around the world, met AI tool founders. I prompted and prompted and prompted, trying to work out how these things work. 

And I read papers and listened to things and bought books and just devoured information. And then most of all, I experimented. 

I believe that people running their own businesses just as one person can now get to much higher revenue levels by using AI. And I think that is by far much more exciting to me than big enterprises using AI. 

I think those individual businesses can go, “Oh, I’m used to getting £10K month, now I can get £20K a month. That’s incredible. And I don’t have to hire anybody. I don’t have the hassle of hiring and the responsibility of managing a person, but I can do all these new things and things can run more smoothly, and my services can be deeper and better as well.” 

So I started sharing what I’d learnt. I started a newsletter called AI for Non-Techies, and that just went whoosh. And so eventually, I think my eye just completely went off the ball with my agency because there was so much opportunity and people were asking me to speak and share what I’d learnt, and people were so hungry for this information. 

So I ended up having to very sadly wind down my agency and my team as well. It was one of the toughest decisions I’ve ever made in my entire life. It was heartbreaking. 

But in the end, one was going this way, and the other one was going this way, and you have to make these decisions as a business owner sometimes. 

Yeah, that was March this year, and it’s just absolutely shot up since then. Because I was doing both for a while, doing both for a couple of years. 

I was out doing the AI speaking, and now all I do is the AI stuff. I train people, I speak, I build programmes, I do boot camps and things like that, and I absolutely love it. 

So that’s how I got into it. It was by accident, as is the case so many people have. 

Bex Burn-Callander:

That’s the best business idea or best business journey, is when it’s like, “Oh, I just couldn’t not do it. I stumbled across this thing and it reached out with its arms and it grabbed me and then that was it. That was what I was doing for the next 10 years.”

AI has revolutionised how many entrepreneurs do business, including Murray, who shut down her marketing agency to focus on AI training.

Finding business opportunities by being ahead of the AI curve

Murray built her business by learning everything she could about AI so she could help others incorporate this technology into their businesses. 

Bex Burn-Callander:

And this is an area that’s exploding, and there are a lot of people out there that need help and need the education piece, but is that going to be the same in 10 years time? Are you still going to be giving the same sort of training, only, I don’t know, two levels up? 

Because there’ll always be a gap between what the person, regular person on the street knows about AI, and what the actual potential for it or what the kind of usability has reached. 

So is that a bit of job security, I guess, for you going forward?

Heather Murray:

Yeah, I think so. The technology adoption curve, where you’ve got the early adopters, and we’re not even in the early majority yet, I think the vast majority of people haven’t even begun on this journey yet. 

So where I’m positioning myself right now is AI for beginners. Non-technical. Because I see this too much and I still see it, I’m often popping into things and seeing what other people are doing, and I find it starts about three stages further than a lot of people need it to. 

I usually start all my talks by going, “This is what I’m talking about, by the way. This is generative AI.” And they go, “Oh, OK, right. I get it now.” … “So that’s what’s different. OK.” 

And then I’ll just explain things in a really basic way. I hate the term “for dummies,” but you remember those books. 

Just simplify things, and that’s what I plan to do. 

So sticking with that beginner book. My forte is working with other small businesses and other people who want to, just like me, who want to double or triple the size of their business without hiring. And just to see what that feels like to have this beautiful, almost like other team members with specialisms, but they’re AI. 

And then knit that all together really nicely with automation and you’ve got something really quite special. 

And then knit that all together really nicely with automation and you’ve got something really quite special.

Even complete AI beginners can grow their businesses more easily with a little bit of training. 

How to use AI responsibly in your business

Businesses that use AI should retain human oversight to check its accuracy and make important decisions, watch for bias in its responses, protect sensitive data, and be transparent about using this technology.  

Bex Burn-Callander:

And do you have any worries? I mean, there’s a lot of fear out there about the dark side of AI and what it could do to jobs, to the way that we socialise, the way that humanity feels about itself. 

Do you share those fears, or are you just really quite bullish on AI and really positive about the impact it will make on the world around us?

Heather Murray:

Oh, absolutely. Every technology in the hands of bad actors for a start is a scary thing. Look at the internet. But there’s a huge flip side, and I think I’m 50/50. 

I’m very much a kind of live in the present moment, and I’m thinking about what it can do right now. 

But when I think ahead, and a lot of people ask me this question of, “Where do you think we’ll be in two years’ time? What will have changed, and where do you think we’ll be in 10 years’ time, 20 years’ time?” 

It’s really difficult to say because it’s changing so quickly. I know it’s a cliche, but it really is. As somebody who works in it, I’ll do the same session two days apart and something will have changed. I can never get my slides right. 

But there are lots of risks. There are lots of ethical issues as well around generative AI. I think we’d be talking about them for hours if we got really into that. 

But things like the possibility of misinformation has now just got so much worse because of people using AI incorrectly. And that’s the main reason I’m doing what I’m doing, making it accessible and helping people understand how to use it properly. 

If you don’t use it properly, if you’re just trusting what comes out the other side and you’re not fact-checking it, because it hallucinates, it makes things up, it’s biased. 

Look at the data set that it’s being trained on; it’s trained on human content, which means it’s got human bias. 

It’s built by humans, and then it’s coming out with this biased content. So we have bias, we have the potential for deepfakes as well. 

I can create a video now with a couple of sentences in 30 seconds. Again, in the wrong hands, that’s a terrifying thing, too. I think safety is so important, and transparency is so important, too. 

Heather Murray:

So when we were talking earlier about the shame of using AI, that people feel like they’re cheating, I think we need to learn to be much more open about our AI use and say, “Hey, I used AI for this”, so that we are not starting to cover things up. 

And I love LinkedIn, they’ve just started to do this thing where you get a little CR on the images.

Bex Burn-Callander:

Yeah. I was just going to mention that because I love the fact that it was, “Use AI to expand your reach,” or something. And then it puts a little tab on it that says, “This was made with AI,” which I love.

Heather Murray:

And I’ve seen a few startups now who are building products like that all over the internet, so you’d be able to click on it and see its provenance. 

So I think that is such an amazing and important step as well. I don’t know how we do that with text, but I think there are a lot of people working on that, too. 

I mean, there are a ton of risks and ethical issues, but there’s a ton of mitigations being worked on as well. 

Alongside AI’s rapid development, people are working on ways to help people use this technology ethically. 

How to use AI safely and securely

When you’re using AI, never feed it sensitive information, as it may learn this information and disclose it to other users.

Heather Murray:

So it’s like with any new technology, and we really are in its infancy, which is another thing to know for people who are just starting out using it, it breaks all the time. All the time. 

It’s very rare that I have a day where I’m training somebody on, say, ChatGPT and it doesn’t do something weird. So don’t be put off if it does; just give it a minute, give it an hour, it’ll come back. 

Or if it gives you a weird response, don’t write it off. Just be very careful. 

I think the most important thing to know right now for people starting to use it is that whatever you put in could come out in somebody else’s response. 

So when I’m talking about attaching documents and things like that, be really, really careful with the information that you give it because it’s being used to train and it could, it’s very unlikely as I say, but it could come out in somebody else’s response. 

So avoid sensitive data, if you’re using free versions of things. Generally, you pay for data privacy when it comes to AI. 

So for example, I have ChatGPT Teams edition, and that’s because I am constantly feeding it sensitive data. I’m doing lots of work on it, and I know that I’m secure there. 

But in the free versions, your data is not secure at all. So anonymise it or just play around without it. 

But if you do want to start feeding it real information, get one of the paid versions instead. And just look into the security side, do your due diligence in that way, I think it’s really, really important to do that. 

If you want to be able to use AI to work with private data, you’ll most likely need to upgrade to a paid tier to keep this data safe. 

Who owns the copyright for AI-generated content?

It’s unclear whether the copyright for AI-generated content belongs to the person using an AI tool or the company that owns that tool.

Bex Burn-Callander:

And is it true that if you generate any sort of content on these platforms, you don’t actually own the copyright? Is that right? It’s all owned by the AI company itself. 

Heather Murray:

It’s a Wild West. Nobody’s able to answer that question right now, and a lot of people ask it to me. When it comes to regulation right now and who owns what in IP, it’s a Wild West in the UK. 

We’ve got the EU AI Act, which is obviously going to set a precedent for us. But at the moment in the UK, we’ve got bits and pieces, and the bits and pieces are great, but they’re not joined up. And that is something we need to be working on right now so we’ve got set clear rules for who owns what and how transparent we should be and what needs to be declared and risk levels and all of that sort of stuff. 

But yeah, there’s no answer for that yet. That’s how early we are into this. And this is rare for a technology that we all have such easy access to this new thing. 

And it also makes it a dangerous thing as well, that we can all go so wrong, so easily. But nobody knows who owns it. 

Bex Burn-Callander:

It’s rare that I feel pity for lawyers, but my goodness, this is a mind-boggling area where a lot of work, a lot of man-hours, are going to go into figuring all this out. 

So I do, I have sympathy for the people who are going to try and put this all down in rules and laws and make it all comprehensive. That’s a big job. 

Copyright laws have not yet caught up with the AI boom, leading to unanswered questions about who owns AI outputs. 

What does the future have in store for AI?

AI technology is advancing rapidly, from AI voice synthesis tools indistinguishable from real humans speaking to holograms that look and act just like live people. 

Bex Burn-Callander:

And, Heather, we talked a bit about the future of your business. Now, while I was talking to you, I was just imagining it, we’ve got holograms already. 

So if you wanted to grow your business, could you just create an AI version of yourself to go out, flick a switch, the hologram comes on, and you are delivering training? 

I mean, could this be something that, I don’t know, in five years’ time, even, you could do if you wanted to grow your training business? Is this the way technology is headed? Is this the kind of thing you are thinking about when you are looking into the future of AI for Non-Techies?

Heather Murray:

Yeah, I mean, I’m really torn because I deliberately deliver my training in a way that’s so human. It’s just me talking. There’s no slickness. If I make a mistake, I deliberately keep it in as well, if I trip over my words. I think it’s really important now. 

I’ve actually got an AI version of myself, which is an AI avatar trained on my image, not quite in hologram form yet, but that’s bound to be coming soon. 

But this digital Heather, she looks like me, she sounds like me. My own dad, when I played the video, couldn’t tell it wasn’t me. She has my voice. All you do is you type in what you want her to say and she’ll say it.

Bex Burn-Callander:

You deepfaked yourself. 

Heather Murray:

I deepfaked myself. Yes. Which seems really stupid when you think about it. A lot of people go, “Are you not worried that you’ve actually given your likeness?” 

It’s with a company called HeyGen, and they have really good guardrails. And there is a lot of trust you have to put in these tools if you want to experiment, and I chose to trust this tool. 

So I’ve had a look at avatars for training purposes. I think the beauty of training is that being engaging is about responding to what people are saying and doing. 

And also, just the thoughts that come into your head as you’re talking. It’s not a rehearsed script. I would never sit and read off slides; I’ve never had a script for training in my life. 

I like to go, “Oh, and that reminds me of this,” and “Oh, this came out yesterday and this is actually really relevant.” Or, “That’s actually not as up-to-date as it could be because this happened yesterday.” 

I think that type of lively delivery would be something that AI would really struggle to do. It could be possible in the future. It could sit and listen to me delivering training and be able to mimic it and then be tailored into the news somehow. 

There’s something called Google NotebookLM [now Gemini Notebook] that came out that really made me go, “Whoa.” 

It’s free. I really recommend people check it out just to see where voice has got to, AI voice. So it’s free. You just load in whatever information you want. I mean, you can just type in a paragraph. I typed in to get a paragraph about my husband leaving his career and starting this business that I’m going to help him out with, and just like a few sentences, but you can upload loads of stuff. 

I also uploaded a different one with all of my AI training in it. 

And it creates a podcast with two humans talking to each other about the topic, and it comes up with insights that you hadn’t even thought of. 

But the podcast, you would never guess it was AI. They’re laughing, they make jokes, they express opinions. It’s incredible. And that really made me go, “Oh, AI voice is a lot more advanced than what we’ve got access to right now.” 

So there’s so much that the humanity of this podcast was so realistic that I’m not deeming anything impossible right now, but from where I am right now, I think very human delivery is what I’m focused on. 

Because I think that’s keeping me apart from competitors, is just that I’m very normal and I think people relate to that like, “Oh, she’s like me.” 

But I’ve spent the last two years researching AI, and that’s the whole point. I’m not a gatekeeper of knowledge, or that I know things you could never understand. It’s not that. The whole point is that you can understand it, it’s really easy. Let me show you.

Bex Burn-Callander:

AAnd your enthusiasm is infectious. I’m literally on the edge of my seat and I’m leaning in, my head is going to look enormous on YouTube because I’m properly bent forward, hanging off your every word. 

So I do think that you definitely have a niche with that. And I feel like we ought to apologise to our listeners because they’re going to lose, what, 40 hours next week at least …

Heather Murray:

Oh, at least, at least. 

Bex Burn-Callander:

… playing with all these tools, going down the rabbit hole. I’ve been scribbling down things to play with. Maybe I’ll spend a day where I’ll send all my emails in the style of George Orwell.

Heather Murray:

Yes. Exactly. And that’s another really important part is play. Play safely, but play. 

This is the time to be playing around. A lot of the tools are in their infancy, but getting to understand how they work and how they respond will prepare you for when they’re not in their infancy and they’re a bit more advanced. 

And they’ve got all these capabilities that will jump you ahead of everybody else who just starts to learn at that point. 

But it’s so much fun. It’s loads of fun to play around with these. I’m constantly squishing people and turning people into cakes and writing random things and all sorts of different things. 

My husband is sick of me coming home and going, “Look at this.” And he goes, “What is this now?” But it’s fun. It’s a fun thing. So play, but play safely.

As AI advances by leaps and bounds, it’s important to keep up with what it can do by experimenting with new tools and technologies.

Where should you start experimenting with AI?

If you’ve never used generative AI tools, a simple place to start is to ask one to be a character, like an interviewer for a job opening or a high-priced consultant, and then have a conversation with it.

Bex Burn-Callander:

So if someone who’s tuned into the show has one hour that they’ve set aside to look into this tech, what would you tell them to do with that one hour? Where would you send them? It’s their first play, as you say, with this tech; where should they go?

Heather Murray:

I still think ChatGPT; its free version is really broad, but try to think outside of content creation. 

Ask it to act as an interviewer for you. Ask it to be these different characters. I think just playing around with characters for an hour on ChatGPT. 

If you are applying for a job, you can set it as your interviewer and you can practice. You could say, “I am X. I’m applying for a job X.” You can even attach the job description or paste the job advert in. 

“And you’re going to be the interviewer and you’re going to be quite harsh and ask difficult questions. Start the simulation.” And you can go back and forth, back and forth. 

Imagine the people that you would like to book a one-to-one with but are probably a bit too expensive; set that conversation up on ChatGPT and I bet you’ll be surprised. 

You could say, “Act as a sales consultant that usually costs £1,000 an hour. I am a business owner, and I would like some advice on my sales. Ask me the questions you’d normally ask in this situation and come up with a plan at the end.” 

Then you’re going to get this amazing expert advice. It’s incredible what you can achieve. So yeah, ChatGPT, the free version, is a really good place to start. 

If you’ve never used AI before, a good place to start is assigning it a persona and then just talking with it to see what you can learn. 

Inspired by this business story?

Wherever you’re listening or watching, subscribe to Sound Advice on Apple iTunes. 

We are also on Spotify and anywhere else you get your podcasts.

Want to know more about Heather and AI for Non-Techies?

You can find out more about Heather on her LinkedIn. 

You can find out more about AI for Non-Techies on their website.

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PakarPBN

A Private Blog Network (PBN) is a collection of websites that are controlled by a single individual or organization and used primarily to build backlinks to a “money site” in order to influence its ranking in search engines such as Google. The core idea behind a PBN is based on the importance of backlinks in Google’s ranking algorithm. Since Google views backlinks as signals of authority and trust, some website owners attempt to artificially create these signals through a controlled network of sites.

In a typical PBN setup, the owner acquires expired or aged domains that already have existing authority, backlinks, and history. These domains are rebuilt with new content and hosted separately, often using different IP addresses, hosting providers, themes, and ownership details to make them appear unrelated. Within the content published on these sites, links are strategically placed that point to the main website the owner wants to rank higher. By doing this, the owner attempts to pass link equity (also known as “link juice”) from the PBN sites to the target website.

The purpose of a PBN is to give the impression that the target website is naturally earning links from multiple independent sources. If done effectively, this can temporarily improve keyword rankings, increase organic visibility, and drive more traffic from search results.

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HMRC signed me up for MTD for Income Tax. What should I do now?

Have you received a letter or online message from HMRC informing you that you’ve been signed up for Making Tax Digital (MTD) for Income Tax and you’re unsure what to do now?

It means you need to start using the MTD for Income Tax system because HMRC’s records show your qualifying income from self-employment and property was over £50,000 in the 2024/25 tax year.

In this article, we discuss what this means for you, provide an overview of MTD for Income Tax, and highlight what you need to do now.

Here’s what we cover…

An overview of Making Tax Digital for Income Tax

Since 6 April 2026, an individual generally needs to use MTD for Income Tax if they’re registered for Self Assessment, receive income from self-employment or property, their combined qualifying income was more than £50,000 in the 2024/25 tax year, and no exemption applies.

Qualifying income is the combined gross income from self-employment and property, before expenses, based on the relevant Self Assessment return. Other income and gains don’t count towards this threshold.

Those who meet that criteria (there are exceptions) need to use MTD-compatible software to keep digital records, send quarterly updates, and submit a tax return, including any other income sources that must be reported.

Quarterly updates are summaries of business income and expenses. They’re not tax returns.

MTD for Income Tax will expand in 2027 and again in 2028.

The threshold is more than £30,000 of qualifying income in 2025/26 for a 6 April 2027 start and more than £20,000 in 2026/27 for a 6 April 2028 start, subject to the other eligibility conditions and exemptions.

What’s happening with the HMRC-led sign-up to MTD?

HMRC is using tax records of sole traders and landlords to identify if they are required to use MTD for Income Tax but aren’t yet and will contact those who meet the criteria to let them know they’ve been automatically signed up.

The HMRC-led sign-up to MTD will be happening in stages over the coming months.

HMRC’s current automatic sign-up exercise applies to people required to use MTD for Income Tax for 2026/27 whose records show qualifying income over £50,000 in 2024/25 and who have not already signed up.

It’s worth noting that if you’re required to join MTD for Income Tax from April 2027 or April 2028, this automatic sign-up process won’t apply to you.

Why HMRC has signed you up for MTD

If you are required to use MTD for Income Tax but haven’t signed up for it, HMRC will contact you to let you know it has done it on your behalf.

While you’ll have been added to the MTD for Income Tax service, it’s important to note that it doesn’t mean you’re fully set up to comply.

You’ll need to follow a series of steps to ensure you meet the necessary requirements.

What to do if HMRC has signed you up for MTD for Income Tax

1. Sign in to your HMRC online account

Start by checking the records HMRC holds for you are up to date. Use the details you use for Self Assessment and log in to your HMRC online services account.

Open the MTD for Income Tax service, check the information that HMRC has for your business and take a look at your self-employment and/or property income sources to ensure they’re correct.

And if any of your circumstances have changed, make sure you get in touch with HMRC to let them know.

Check HMRC’s exemption guidance. Some exemptions apply automatically, while others must be applied for with supporting information.

If HMRC’s income-source information is wrong or your circumstances have changed, follow HMRC’s instructions to correct the record or contact HMRC.

2. Choose your MTD-compatible software

You need to use software for MTD for Income Tax.

You may use one product or a compatible combination of products, including spreadsheets with suitable bridging software, provided the overall setup meets the digital-record, update and tax-return functions you need.

Check the provider’s supported features and HMRC’s compatible-software list.

A solution such as Sage Sole Trader can help simplify the process for you.

It can help you record and categorise transactions, prepare and send supported MTD quarterly updates, and view an indicative tax estimate based on the information entered.

You remain responsible for checking that records are complete and accurate and for meeting filing and payment deadlines.

Once you’ve chosen your software, connect it to MTD for Income Tax.

3. Review your records and fill any gaps

Create and retain the required digital records from your MTD start date.

Check which quarterly updates are due for each self-employment or property income source and use MTD-compatible software to send any outstanding updates.

This might mean you need to import bank transactions, record income, enter expenses or organise any supporting documents.

If you do this sooner rather than later, it’ll be easier to ensure you have everything up to date.

4. Contact your accountant if you have one

If you’ve got an accountant, it’s likely they’ll have contacted you about MTD for Income Tax and you’re already set up.

But check to see if they’ve signed you up.

If your accountant hasn’t been in touch about the new legislation, get in touch with them now to see how they can support you with MTD.

While you don’t need to use an accountant for MTD for Income Tax, you might find professional advice helpful.

Depending on the services agreed, an accountant or tax adviser may help you review your records, software setup and filing obligations.

You remain responsible for ensuring that your tax affairs are complete and submitted on time.

Final thoughts

It might feel a bit unsettling if you’ve received a letter or online message from HMRC letting you know that you’ve been automatically signed up to MTD for Income Tax.

But you’re not the only one who will be contacted by HMRC.

HMRC is ensuring that those sole traders and landlords whose records show they’re required to use MTD have been signed up to it if they’re not using the new system already.

So what’s the best thing for you to do now? Take action early.

Start by logging into your HMRC account, check the information about your business, then choose MTD-compatible software so you can keep records digitally, make your quarterly submissions, and submit your tax return.

And if you need any support, speak to a suitably qualified adviser, such as an accountant or tax adviser.

It might feel like a big step to take to move from manual record-keeping to a digital process, but the sooner you get started, the easier it’ll be for you to stay on top of your taxes and HMRC’s requirements, so you can focus on your business.

Browse more topics from this article

PakarPBN

A Private Blog Network (PBN) is a collection of websites that are controlled by a single individual or organization and used primarily to build backlinks to a “money site” in order to influence its ranking in search engines such as Google. The core idea behind a PBN is based on the importance of backlinks in Google’s ranking algorithm. Since Google views backlinks as signals of authority and trust, some website owners attempt to artificially create these signals through a controlled network of sites.

In a typical PBN setup, the owner acquires expired or aged domains that already have existing authority, backlinks, and history. These domains are rebuilt with new content and hosted separately, often using different IP addresses, hosting providers, themes, and ownership details to make them appear unrelated. Within the content published on these sites, links are strategically placed that point to the main website the owner wants to rank higher. By doing this, the owner attempts to pass link equity (also known as “link juice”) from the PBN sites to the target website.

The purpose of a PBN is to give the impression that the target website is naturally earning links from multiple independent sources. If done effectively, this can temporarily improve keyword rankings, increase organic visibility, and drive more traffic from search results.

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HMRC-led sign-up for MTD for Income Tax: What accountants need to know

Have any of your clients received an online message or letter from HMRC confirming that they’ve been signed up for Making Tax Digital (MTD) for Income Tax?

As an accountant with sole trader or landlord clients, some of them may be in touch soon with questions for you on what it means and what to do next.

Some of them might be surprised that HMRC has contacted them. Others may be worried that they’ll face a penalty or have done something wrong.

HMRC is automatically signing up taxpayers whose records show they should be using MTD for Income Tax but haven’t signed up for the service, either themselves or via an agent.

In this article, we discuss how the HMRC-led sign-up to MTD works, the actions your clients need to take and how your practice can support them.

Here’s what we cover…

Overview of the HMRC-led sign-up to MTD programme

As you know, MTD for Income Tax came into force in April 2026.

An individual generally needs to use it if they’re registered for Self Assessment, receive income from self-employment or property, their combined qualifying income was more than £50,000 in the 2024/25 tax year, and no exemption applies.

For any eligible taxpayers who haven’t already registered for MTD, either themselves or via an agent, HMRC confirmed it will be signing them up from September 2026.

The current automatic sign-up exercise applies to people required to use MTD for Income Tax for 2026/27 whose records show qualifying income over £50,000 in 2024/25 and who haven’t already signed up.

The sign-up confirmation isn’t, by itself, a penalty notice. HMRC says no penalty points apply for missing quarterly update deadlines for 2026/27.

However, affected clients must still keep digital records, send all required quarterly updates before submitting the tax return, submit the return on time and pay tax due by the relevant deadline.

What the HMRC-led sign-up to MTD actually means

One key point to communicate to any of your clients who are automatically signed up by HMRC is that it doesn’t mean they’re fully set up for MTD for Income Tax.

HMRC has signed up clients using information that it already holds and the process covers the initial registration. It doesn’t complete the setup of MTD or any required compliance work.

That’s where you come in—to review that information and complete a series of follow-up steps. Your practice can play an important role here, helping your clients to meet their required obligations.

Some of them may assume the communications from HMRC confirms everything has been done and they’re ready to use the service.

But actually, additional work that needs to be carried out, including:

  • Checking the client’s authorisation and MTD status in the agent services account
  • Checking and confirming the client’s income sources
  • Setting up digital records and creating them from the start of the tax year
  • Choosing and authorising MTD-compatible software
  • Identifying any missed obligations.

What accountants need to do if clients receive a letter from HMRC

1. Check your client’s HMRC records and agent authorisation

Start by checking that the records held by HMRC for your client are up to date.

Use the agent services account and the relevant MTD for Income Tax service to confirm that the required authorisation is in place, verify the client’s identity details and status, and review the income sources HMRC has created.

And let your clients know that they should contact your practice straight away if they receive communications from HMRC on being automatically signed up to MTD, especially if anything has changed since their 2024/25 tax return.

Examples include:

  • Their self-employment or property business has stopped trading
  • They’ve got a new self-employment or property income source
  • The income source information is incorrect
  • You believe they qualify for an exemption from MTD.

Spotting any issues now and resolving them means the chance of compliance issues cropping up later in the tax year can be reduced.

2. Review software readiness

The HMRC sign-up process provides an opportunity for your practice to identify clients still relying on paper records or who have infrequent bookkeeping processes in place.

As you know, your clients need to use MTD-compatible software and this is a good chance to see who needs to start using it.

Check that the chosen product (or combination of products) supports all of the client’s relevant income sources, their accounting period and the tasks the client or your practice will perform.

An all-in-one solution like Sage Sole Trader might simplify the process for your clients.

It can help them record and categorise transactions, prepare and send supported MTD quarterly updates, and view an indicative tax estimate based on the information entered.

However, your clients remain responsible for checking that records are complete and accurate, and for meeting filing and payment deadlines.

If you’re managing multiple MTD clients, using a consistent software platform may help you to standardise your processes.

3. Support your clients with digital record-keeping

If HMRC has automatically signed your clients up for MTD, there’s a possibility that they’ve not created digital records from the start of the tax year.

That means they might need to do the following:

  • Import their bank transactions
  • Enter their expenses
  • Record any historical income
  • Complete any MTD quarterly updates that are overdue.

The level of work required here will depend on how long their MTD preparation has been delayed.

4. Prepare for a rise in queries from clients

If HMRC gets in touch with your clients, they’ll be likely to turn to you first for support. With that in mind, you could prepare the following in advance:

  • Standard client communications on MTD
  • FAQ documents on the MTD process
  • MTD webinars
  • MTD onboarding checklists
  • Recommendations on software to use
  • Information about the support services on offer from your practice.

Having that information in place means you can provide your clients with the support they need.

Preparing reusable communications and checklists may help your practice handle enquiries more consistently. Early engagement may also support service planning and client understanding, too.

Final thoughts

Some of your clients might feel a bit unsettled if they’ve received a letter from HMRC to let them know they’ve been automatically signed up to MTD for Income Tax.

But it provides the ideal opportunity for your practice to support them with MTD. After all, the sign-up process is only the first step.

Your clients will still need to check and verify their information, choose MTD-compatible software, keep up with digital record-keeping, and submit their quarterly updates and tax return. They’ll look to you for support and guidance on all of this.

Take a proactive approach by identifying any clients who may be affected, review their software readiness, put support processes in place and communicate with them regularly.

That’ll help to create new opportunities for your practice and strengthen client relationships.

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A Private Blog Network (PBN) is a collection of websites that are controlled by a single individual or organization and used primarily to build backlinks to a “money site” in order to influence its ranking in search engines such as Google. The core idea behind a PBN is based on the importance of backlinks in Google’s ranking algorithm. Since Google views backlinks as signals of authority and trust, some website owners attempt to artificially create these signals through a controlled network of sites.

In a typical PBN setup, the owner acquires expired or aged domains that already have existing authority, backlinks, and history. These domains are rebuilt with new content and hosted separately, often using different IP addresses, hosting providers, themes, and ownership details to make them appear unrelated. Within the content published on these sites, links are strategically placed that point to the main website the owner wants to rank higher. By doing this, the owner attempts to pass link equity (also known as “link juice”) from the PBN sites to the target website.

The purpose of a PBN is to give the impression that the target website is naturally earning links from multiple independent sources. If done effectively, this can temporarily improve keyword rankings, increase organic visibility, and drive more traffic from search results.

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Curious about AI revolutionising payroll? Here’s what you can do today

Key takeaways

  • AI can now compare each payroll run against your previous ones and flag anything unusual before you finalise.
  • You don’t need to be a payroll expert to use AI to enhance your payroll.
  • AI is deployed as a “second pair of eyes” and will not change or adjust any data.
  • Using AI to set your own variance threshold (gross and/or net) makes error-checking a quick, repeatable step in every pay run.

It’s the day before payday. The figures look right.

But are they?

If you run payroll for a business—quite possibly alongside a dozen other tasks—you’ll know that flicker of doubt well.

Payroll is high-stakes and high-repetition, and for decades the only safety net was concentration: checking everything manually, line by line, and hoping nothing slipped through.

That’s changing. AI can now spot unusual pay changes before you press submit, and point you towards the likely reason.

In this article, we’ll show you how it works and how to build it into your routine—whether you’re a finance manager, an office manager, or a business owner who does the payroll yourself.

Here’s what we discuss:

What is a salary variance?

A salary variance is simply a change in what someone is paid from one pay period to the next.

On its own, a variance isn’t a problem—pay changes all the time, and usually for perfectly good reasons.

Legitimate causes can include:

  • Overtime, commission or a bonus
  • A pay rise or a change in contracted hours
  • A new tax code from HMRC
  • Pension contribution changes or salary sacrifice arrangements
  • Starters joining part-way through a period, or leavers receiving final pay

Then there are the causes you don’t want:

  • Mistyped hours (45 becomes 54 with one slip of a finger—or even 34 if you’re one key to the left…)
  • A payment entered twice
  • A pay rise applied twice, or to the wrong person
  • Someone left on the payroll after they’ve left the business

Both lists produce the same thing on screen: a number that’s different from last time.

The skill in running payroll well is telling one list from the other before payday—not after.

Why small payroll errors carry a big cost—and how AI avoids it

A payroll error is rarely a catastrophe, but it’s never free.

There are three metaphorical bills to pay.

First, the rework. An overpayment or underpayment usually means a correction in your next submission to HMRC, an awkward conversation about recovering money, or an off-cycle payment to put things right quickly. None of it is difficult, but all of it is time you didn’t plan to spend.

Second, the trust. Being paid correctly and on time is the most basic promise a business makes to its people. If an employee spots the mistake before you do, every payslip after that gets a second look—and payday stops being the non-event it should be.

Third, the hunt. Even when you sense something’s off, finding the cause manually means combing through timesheets, previous pay runs and change requests. The error takes seconds to make and hours to find.

Prevention beats all three. This is where the technology comes in—and most businesses without a dedicated payroll department should consider it mandatory.

How AI catches what tired eyes miss in payroll runs

Payroll follows patterns.

Most people’s pay looks broadly similar from one period to the next, and when it changes, it changes for reasons that leave a trail—an overtime entry, a new tax code, an updated salary.

Patterns are exactly what AI is good at.

It can scan a pay run against previous cycles, spot the figures that fall outside expected ranges, and surface them before you finalise—often with a probable cause already attached. It’s the difference between hunting for a needle and simply being handed it.

And this isn’t a future promise.

Sage Copilot’s salary variance detection in Sage Payroll does exactly this today: it flags unusual changes in gross and net pay, and points to the likely reason, including individual salary payments. So, you can investigate in seconds rather than hours.

Crucially, the AI doesn’t decide anything. It checks, compares and flags—then hands the judgement back to you.

You stay in the loop for every decision that matters—but with the tedious comparison work already done.

AI-powered salary variance detection in action

Here’s how it plays out in practice.

You run your monthly payroll as usual. Before you finalise, one flag appears: Priya’s net pay is 18% higher than her recent average, and the likely cause is a duplicated overtime entry. You open her record, see the same eight hours entered twice, delete one, and finalise. Total time: about a minute.

Now imagine the same month without the flag. Perhaps you spot the anomaly yourself while scanning the summary—if you know Priya’s usual pay well enough, and if you’re not rushing. Perhaps you don’t, and Priya is overpaid, and you spend part of next month arranging to recover the money and explaining what happened.

Same error, wildly different cost. The flag doesn’t make you a better payroll operator—it makes your attention go where it’s actually needed.

Build a “spot it before you send it” habit using AI for payroll

Tools work best inside a routine, so make variance-checking a deliberate step in your pay run rather than something you do when time allows.

Three decisions set it up:

  • Set your threshold: Define “meaningful” for your business. That might be a percentage swing (say, anything more than 10% up or down) or a fixed amount (any change over £100). Smaller businesses often prefer a fixed figure because one person’s overtime can make percentages jumpy.
  • Decide who investigates: If more than one person touches payroll, agree whose job it is to chase down each flag—and give them the authority to hold the pay run until it’s explained.
  • Explain every flag: The rule isn’t “fix the errors”; it’s “explain every variance beyond the threshold”. Most explanations will be innocent and take ten seconds. That’s the habit working, not the habit wasting your time.

This discipline used to be exhausting, which is why it slipped whenever things got busy.

With AI doing the comparison work, it’s near-effortless—and near-effortless habits are the ones that survive.

Why you don’t need to be a payroll expert to use AI

A seasoned payroll manager develops a feel for what looks wrong—an instinct built from years of pay runs.

Most people running payroll in a small business never get the chance to build that instinct, because payroll is one job among many.

This is where the technology genuinely levels the field.

Salary variance detection is, in effect, that experienced eye built into the software: it knows what your pay runs normally look like and speaks up when something doesn’t fit. You bring the knowledge of your business—who worked the overtime, who got the rise—and the software brings the pattern memory.

Together, that’s a payroll process a specialist would recognise as robust, run by someone who’d never call themselves a specialist.

Final thoughts

Payroll errors are rarely about carelessness. They’re about human attention being asked to do a machine’s job.

AI-powered checks such as salary variance detection in Sage Payroll flip that around: the software does the tireless comparing, and you do the judging.

Start simple. Decide your variance threshold this week, make “explain every flag” part of your next pay run, and let the software carry the checking load. Payday should be a non-event—and now it can be.

Frequently asked questions

What causes an employee’s pay to change unexpectedly?

The most common legitimate causes are overtime, bonuses, pay rises, pension or salary sacrifice changes, a new tax code from HMRC, and starters or leavers being paid for part of a period. If none of those apply, but the pay has changed, check for input errors such as mistyped hours or duplicated payments.

How do I check payroll for errors before submitting it?

Compare each person’s pay against their recent pay runs and investigate anything that moves beyond a threshold you’ve set, such as a 10% swing or a £100 change. Payroll software with AI-powered checks, such as salary variance detection in Sage Payroll, automates this comparison and flags unusual changes before you finalise.

What is salary variance detection?

Salary variance detection is an AI-powered feature that compares each employee’s pay against their previous pay runs and flags unusual changes before you complete payroll, often suggesting the likely cause. In Sage Payroll, it’s part of Sage Copilot and is designed to catch errors such as duplicated payments or mistyped hours before payday.

Can payroll mistakes be corrected after payday?

Yes. Underpayments are usually fixed with an additional payment, and overpayments can be recovered by agreement with the employee, with the correction reported to HMRC in your payroll submission. It’s always simpler, though, to catch the error before the pay run is finalised.

Will AI replace the person who runs payroll?

No. AI in payroll handles the repetitive checking—comparing figures, spotting patterns, flagging anomalies—while the person running payroll makes every decision, from approving a flagged variance to finalising the pay run. It works as a second pair of eyes.

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A Private Blog Network (PBN) is a collection of websites that are controlled by a single individual or organization and used primarily to build backlinks to a “money site” in order to influence its ranking in search engines such as Google. The core idea behind a PBN is based on the importance of backlinks in Google’s ranking algorithm. Since Google views backlinks as signals of authority and trust, some website owners attempt to artificially create these signals through a controlled network of sites.

In a typical PBN setup, the owner acquires expired or aged domains that already have existing authority, backlinks, and history. These domains are rebuilt with new content and hosted separately, often using different IP addresses, hosting providers, themes, and ownership details to make them appear unrelated. Within the content published on these sites, links are strategically placed that point to the main website the owner wants to rank higher. By doing this, the owner attempts to pass link equity (also known as “link juice”) from the PBN sites to the target website.

The purpose of a PBN is to give the impression that the target website is naturally earning links from multiple independent sources. If done effectively, this can temporarily improve keyword rankings, increase organic visibility, and drive more traffic from search results.

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What is employee experience? | Sage Advice UK

Employee experience isn’t a perk or a programme.

It’s what work feels like for your people, day after day.

HR teams know how much the employee experience matters.

The problem for many HR teams is finding enough time to shape it when admin and process work take up so much of the week.

Sage’s HR and Payroll Leaders’ Report, based on research with 1,000 HR and people professionals across the UK, Ireland, and South Africa, shows the scale of the challenge.

61% of HR leaders spend 10 or more hours a week on administration and paperwork, compared with just 30% who spend that long supporting employees.

What’s more, 89% say they face challenges with resource and capacity.

Despite these challenges, HR is still making time for culture: 67% already spend significant time creating an inclusive, engaging workplace.

However, what’s in short supply is the capacity to do more.

The good news is that some of that time can be reclaimed.

And you don’t need to overhaul your entire HR function to start.

In this article, you’ll learn what employee experience is, why it matters to business performance, what’s getting in the way, and how to build a practical plan for improving it.

Key takeaways

  • Employee experience is a business capability, not a perk: it covers everything a person encounters at work, from onboarding and pay accuracy to how their manager supports them day to day.
  • Culture is already high on HR’s agenda: 67% of HR leaders already spend significant time on culture and inclusion.
  • Capacity is the real constraint: 89% face challenges with resource and capacity, and 77% spend a lot of time maintaining records, contracts, and policies.
  • Admin takes a disproportionate share of HR’s time: 61% of HR leaders spend 10 or more hours a week on admin and paperwork, while 30% spend that long supporting employees.
  • Technology frees time for people: among businesses using modern HR technology, 82% say it reduces admin and frees time for strategic work while 77% say it significantly improves employee experience.

Here’s what we’ll cover:

What is employee experience?

Employee experience is everything a person encounters throughout their time working for you.

It starts during the recruitment process, before they’re even technically an employee, and continues through the day-to-day experience of working for your organisation.

How they’re onboarded, whether their pay arrives correctly, how easily they can book leave, and how their manager responds when they raise a problem all contribute to that experience.

In turn, their experience shapes their engagement.

If people feel valued and able to do their jobs without unnecessary friction, they’re more likely to feel engaged.

Those everyday operational moments matter more than you might think.

88% of HR leaders say accurate and timely payroll processes are critical to employee satisfaction and trust.

A payslip with an error, or a form that takes 4 emails to process, can affect how someone feels about working for you just as much as a wellbeing programme.

That’s why employee experience can’t be separated from HR’s day-to-day work.

HR touches almost every stage of the employee journey, giving it a major influence over how your culture feels in practice.

Why employee experience matters to your business?

The HR and Payroll Leaders’ Report puts it plainly: when people thrive, business thrives.

Employee experience affects much more than how people feel about coming to work.

It can influence some of the issues HR and business leaders are already trying to solve:

  • Retention: 66% of HR leaders say attracting and retaining people with critical skills is a current challenge. Given the current organisational skills gap, creating an experience that gives good people reasons to stay has become even more important.
  • Wellbeing: 65% cite low morale, burnout, or employee wellbeing issues as a current challenge. A great employee experience can help you address the conditions that contribute to those problems.
  • Trust and satisfaction: 88% say accurate and timely payroll processes are a critical driver of employee satisfaction and trust. Employee experience isn’t just about culture initiatives. Basic processes matter too.
  • Business value: 87% agree that when HR and payroll work well together, it creates measurable value for the business.

Employee experience has a clear business impact.

The challenge for HR is translating that impact into terms leadership recognises.

Why HR is struggling to deliver a better employee experience

The biggest barrier is capacity.

77% of HR leaders spend a lot of time maintaining accurate records, contracts, and policies, while 75% say the same about compliance.

And 89% face challenges with resource and capacity.

That pressure is clear when you look at how HR spends its week.

69% of HR leaders spend 10 or more hours a week on processes, while 61% spend that long on administration and paperwork.

Just 30% spend 10 or more hours supporting employees.

Ask where they’d like to spend their time and the picture changes.

58% would like to spend 10 or more hours a week on strategy, 50% on technology and AI, and 37% supporting employees.

By comparison, just 31% want to spend that much time on processes and 24% on admin.

The pattern is clear: HR leaders want to shift more of their time away from process and admin work and towards strategy, technology, and people.

That matters for employee experience.

When operational work consumes so much capacity, there’s less room for the work that directly shapes it, from stronger onboarding to meaningful check-ins and spotting signs of disengagement early.

The pressure affects HR teams too. HR workload challenges are now the norm, according to our research: 71% say their workload has increased compared with last year, while 52% feel a sense of burnout in their current role.

“ I would automate routine HR tasks, thereby creating more time for strategic and human activities.

HR director, technology sector, Ireland

How to improve employee experience

The first step in any successful employee experience strategy is freeing up more time to focus on your people.

1.  Automate repetitive admin

Start by checking what your existing tools can already do before you think about buying something new.

Features such as email filters, saved templates, automated reporting, and workflow automation can all reduce repetitive manual work.

What’s more, HR automation and AI in HR tools can also help speed up the process of completing routine tasks.

Pick one recurring task to start with.

Look for work that follows the same steps each time, such as routine data entry, reporting, or simple employee requests.

Automating even one process can begin to free up more time for people-focused work.

Practical actions:

  • List the 5 repetitive tasks that take up most of your time each month.
  • Check which ones your existing systems can automate or simplify.
  • Choose 1 to automate this month and track how much time you save.

2.  Streamline routine processes

Not everything needs to be automated.

Some routine work can be handled more efficiently, or even delegated to someone else.

Tasks such as scheduling or answering basic policy questions don’t always need senior HR involvement.

Where appropriate, redistribute them across the team so experienced HR staff have more time for work that needs their judgement, such as coaching or conflict resolution.

It also helps to protect dedicated time for admin.

Rather than switching constantly between paperwork and people-focused work, batch routine tasks into set blocks during the week.

Practical actions:

  • Set specific times for routine admin rather than handling it throughout the day.
  • List routine tasks that don’t need senior HR involvement.
  • Give employees and managers self-service options for simple HR requests.

3.  Build manager capability

Employees experience much of working life through their manager, so managers have a big influence on how work feels day to day.

HR can help by giving them practical tools they can actually use.

That might mean a simple structure for 1-to-1s, clear guidance on when to raise a wellbeing concern, or enough policy knowledge to answer common questions without sending everything back to HR.

This supports employees and takes pressure off your team at the same time.

Managers can deal with more day-to-day issues themselves, while HR has more time to focus on work that needs specialist input.

Learning how to choose managers who can get the most from their teams is essential for improving employee experience.

Practical actions:

  • Give managers a simple template for regular 1-to-1 conversations.
  • Build 1 wellbeing check-in into the monthly management rhythm.
  • Create a short FAQ for the policy questions managers hear most often.

4.  Make engagement part of the routine

Employee experience improves through consistent action, not occasional initiatives.

The aim is to build regular opportunities to listen to employees, recognise good work, and respond to concerns into the way you already operate.

That doesn’t need to mean another major programme.

Keep feedback simple enough to collect and act on regularly.

A short quarterly pulse survey, for example, can help you spot changes between larger employee engagement and culture surveys.

Using the right employee engagement survey questions will help you gather actionable insights.

Practical actions:

  • Run a short quarterly pulse survey between larger engagement surveys.
  • Share what you’ve changed in response to employee feedback.
  • Use existing team meetings to recognise employee contributions.

How the right systems give you time back

Changing how you work can free up some capacity.

But the systems behind your HR processes matter too.

86% of HR leaders say investment in modern HR technology would have a significant impact on tackling their challenges.

And among businesses that have already invested, 82% say their technology reduces admin and frees time for strategic work, while 77% say it significantly improves the employee experience.

Connecting HR and payroll can help further by reducing the manual work involved in moving information between processes.

That matters when HR teams are already stretched for time.

The goal isn’t simply to automate more. It’s to spend less time on repetitive work and more time on the people and priorities that need your attention.

Turn insight into action

Improving employee experience starts with finding the hours to work on it.

Audit 1 week of your time.

Track what you actually do, then sort each activity into strategic, operational, and administrative work.

Soon, it will be pretty clear where you spend most of your time, and what you should take off your list moving forward.

To make lasting improvements, you’ll need to build HR strategy from business strategy and understand how to create an HR strategy that supports your goals.

Want to find out more?

Download the employee experience infographic for a practical guide you can share with your team.

Frequently asked questions about the employee experience

What is employee experience?

nisation from:

  • recruitment and onboarding to payroll,
  • manager interactions,
  • development,
  • and day-to-day HR processes.

These experiences shape how people feel about working for you.

What is the difference between employee experience and employee engagement?

Employee experience is what happens to people at work.

Employee engagement describes how connected, motivated, and committed they feel as a result.

Improving everyday experiences can therefore help create the conditions for stronger engagement.

Why is employee experience important?

and can influence:

  • retention,
  • wellbeing,
  • trust,
  • and engagement.

When employees have a better day-to-day experience, they’re more likely to feel valued and supported.

How can HR improve the employee experience?

Start by freeing up more time for people-focused work.

Look for repetitive admin you can automate, streamline routine processes, give managers practical support, and create regular opportunities to gather and act on employee feedback.

Consider developing a human-centric employee value proposition to strengthen your approach.

How can HR technology improve employee experience?

HR technology can reduce repetitive admin and give HR teams more time for higher-value work.

Among businesses in Sage’s research that have invested in modern HR systems:

  • 82% say the technology reduces admin and frees time for strategic work,
  • while 77% say it significantly improves employee experience.

Understanding HR strategies for the future of work can help you make the most of these investments.

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A Private Blog Network (PBN) is a collection of websites that are controlled by a single individual or organization and used primarily to build backlinks to a “money site” in order to influence its ranking in search engines such as Google. The core idea behind a PBN is based on the importance of backlinks in Google’s ranking algorithm. Since Google views backlinks as signals of authority and trust, some website owners attempt to artificially create these signals through a controlled network of sites.

In a typical PBN setup, the owner acquires expired or aged domains that already have existing authority, backlinks, and history. These domains are rebuilt with new content and hosted separately, often using different IP addresses, hosting providers, themes, and ownership details to make them appear unrelated. Within the content published on these sites, links are strategically placed that point to the main website the owner wants to rank higher. By doing this, the owner attempts to pass link equity (also known as “link juice”) from the PBN sites to the target website.

The purpose of a PBN is to give the impression that the target website is naturally earning links from multiple independent sources. If done effectively, this can temporarily improve keyword rankings, increase organic visibility, and drive more traffic from search results.

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Client data and AI: A security guide for accountancy practices

Key takeaways

  • Data security is the most cited AI implementation challenge in the profession, named by 62% of accountants in AccountingWEB’s research, produced in association with Sage.
  • Asked for their single biggest concern, accountants put accuracy and hallucinations first at 29%, with data security second at around 22%.
  • Around half of accountants using external AI tools use them to research tax rules, which carries a confidentiality risk and an accuracy risk at the same time.
  • A one-page data-handling policy that people actually follow protects you far better than a comprehensive one nobody reads.

Every practice holds information that people would rather not lose control of.

Payroll data, bank details, unfiled figures, disputes with HMRC, and plans that have not been announced yet… Accountancy and bookkeeping are more burdened with personally identifiable data than nearly any other profession.

So it is no surprise that data security tops the list of AI implementation challenges. In the AccountingWEB report State of the nation: AI in accountancy and bookkeeping, produced in association with Sage, 62% of respondents named it, putting it ahead of a lack of skilled personnel at 48%.

The encouraging part is that this is a procedural problem with a procedural answer.

Work through the checklist below and data security stops being the thing blocking your AI decision. It becomes the thing that makes your decision defensible.

Here’s what we discuss:

Why data security tops the list of AI barriers

At 62%, data security is the most frequently cited implementation challenge in the profession. It sits ahead of the skills shortage and ahead of cost.

There is a nuance worth noticing, though.

When the same research asked respondents for their single biggest concern about the rise of AI, a lack of accuracy and hallucinations came first at 29%, with data security second at around 22%.

Both findings are true and they measure different things. Security is the barrier accountants name when they think about implementation. Accuracy is the fear that keeps them up at night.

That distinction is useful, because the two risks have different remedies.

Accuracy is managed through review processes and human sign-off. Security is managed through tool selection, contracts, and daily habits.

This guide covers the second.

The underlying obligation has not changed. Your duty of confidentiality contains no technology exemption, and UK GDPR applies to personal data whether it sits in a filing cabinet or a chat window.

What accounting data should never enter a general LLM

Start with a clear prohibited list, written down and shared with everyone.

As a baseline, none of the following should be pasted into a general consumer AI tool:

  • Client names alongside any financial detail
  • National Insurance numbers, UTRs, bank details, and payroll records
  • Anything covered by legal professional privilege or a specific confidentiality undertaking
  • Unpublished results, valuations, or price-sensitive information
  • HMRC correspondence containing client identifiers
  • Anything you would hesitate to email to a third party you had never met

The habit that makes this workable is redaction before pasting.

Ask about the scenario rather than the client. A question on the VAT treatment of a mixed supply does not need your client’s name, turnover, or reference numbers to be answered well.

This matters more than it might seem, because of where external tools are actually being used.

In the research, around half of those using AI outside their core accounting software use it to research tax rules or other technical knowledge, and just under half use it to draft client emails and content.

Both of those uses invite people to paste in real client facts without thinking about it.

Premium and non-training settings, explained

Free consumer tiers commonly use your inputs to improve their models by default.

Paid business and enterprise tiers usually do not, and they typically add retention controls, data residency options, and administrator visibility.

Establish all of the following before anyone in your practice types anything sensitive:

  • Is the training exclusion contractual, or a toggle in settings that a user could switch back?
  • How long are inputs retained, and can you set that to zero or near zero?
  • Where is data processed and stored, and can you demand a specific region, e.g. EU vs US?
  • Is there a data processing agreement, and does it name every sub-processor?
  • Which underlying model providers sit beneath the tool, and what are their terms?
  • Are conversations subject to human review for safety or quality purposes?

Get those answers from the contract rather than the FAQ page.

A marketing page can be rewritten overnight without anyone telling you. A data processing agreement cannot.

Two routes into AI carry different risk profiles, and most practices end up using both.

Embedded AI lives inside software you already use and have already assessed. Client data stays within a system you have contracted for, and the supplier is one you have a relationship with.

The trade-off is narrower capability, since the features are built for defined accounting tasks. Around two-thirds of accountants believe their core software already includes AI of this kind.

External tools are general models and standalone products. The capability is broader and often better at open-ended work, but you are adding a new processor, a new data flow, and a new contract to your risk register.

A workable rule of thumb: use embedded tools for anything that touches client records, and reserve external tools for generic drafting, structuring, and thinking, with identifiers stripped before anything is pasted.

When a task genuinely needs an external tool and real client data, that is the moment for a proper procurement conversation rather than a personal subscription paid for on someone’s card.

Here are a good set of questions to ask before trying-out the software, rather than after it.

  • Who is the legal entity behind the product, where is it based, and how long has it operated?
  • Is there a data processing agreement, and does it list sub-processors by name?
  • Are your inputs used for training, and will they confirm that in writing?
  • Where is data stored and processed, and is there a UK or EU option?
  • What are the retention and deletion policies, and can you export and delete everything on demand?
  • Do they hold SOC 2 Type II, ISO 27001, or Cyber Essentials Plus?
  • Does the product support single sign-on and role-based access?
  • What happens to your data if the company is acquired or ceases trading?
  • Has there been a security incident, and how was it disclosed?

Two further steps that practices routinely skip: Tell your professional indemnity insurer what you are planning, because some policies now ask about AI use at renewal. And check whether your engagement letters need a clause added before you begin rather than after.

Documenting your approach for clients and regulators

A written policy protects you twice.

It gives your team a clear line to work to, and it gives you something to show when a client, an insurer, or a professional body asks.

One page covers it. Here are some suggestions as to what you might include:

  • The list of approved tools, and the tier or settings each must be used on
  • The prohibited data list from earlier in this guide
  • Who can approve a new tool, and what evidence they need first
  • How often the list is reviewed, and by whom
  • What you tell clients, and where that appears
  • What happens if data goes somewhere it should not, and who is told within what timeframe

Keep it short enough that people read it. A one-page policy that is followed protects you considerably better than a fifteen-page policy sitting unread in a shared drive.

For clients, a short paragraph in your engagement letter and a page on your website will usually be enough.

Say what you use AI for, say what you do not use it for, say what happens to their data, and say that a qualified person reviews the work. Clients rarely want more detail than that. They want to know somebody is in charge.

Final thoughts

Data security is the most cited barrier to AI in the profession, and it has earned that position. It is also the barrier most amenable to being solved by an afternoon of deliberate work.

The practices that get this right do not have better technology than everyone else. They have a written list of what may go where, a habit of stripping identifiers before pasting, and one person whose job it is to approve new tools. None of that requires budget or specialist expertise.

Here is the takeaway: Decide your prohibited data list this week and circulate it. Move anything touching client records onto embedded tools inside software you have already assessed. Get training exclusions in the contract rather than the settings menu. Write one page describing your approach, and put a short version in front of clients before they think to ask.

Do that, and the 62% barrier turns into a competitive position.

Very few practices can currently answer a client who asks what happens to their data. You can be one of them.

Read below—State of the nation: AI in accountancy and bookkeeping, produced by AccountingWEB in association with Sage

Frequently asked questions

Can accountants use AI chatbots to discuss client data and issues?

Not with identifiable client data on a standard consumer tier, where inputs may be used for model training by default. Client names alongside financial detail, National Insurance numbers, UTRs, bank details, and payroll records should not be entered. Accountants can use general AI tools safely for generic technical questions and drafting, provided identifying details are stripped out first. For work involving real client records, use AI embedded in accounting software you have already assessed, or a paid business tier with contractual training exclusions and a data processing agreement in place.

What is the biggest data security risk when accountants use AI?

The most common risk is not a breach at the AI provider. It is staff pasting identifiable client information into free consumer tools during ordinary work, particularly when researching tax rules or drafting client emails, which research shows are the two most common uses of external AI tools in practice. The remedy is a written prohibited data list, a habit of redacting before pasting, and a short approved tools list everyone knows about.

Does paying for an AI subscription stop my data being used for training?

Usually, but verify it rather than assume it. Paid business and enterprise tiers commonly exclude customer inputs from model training and add retention controls and data residency options. Confirm whether the exclusion is contractual or a settings toggle a user could reverse, check the retention period, and obtain a data processing agreement that names sub-processors. Rely on the contract rather than the marketing page, since published terms can change without notice.

Is AI built into accounting software safer than an external tool?

Generally yes, for work involving client records. Embedded AI operates inside a system you have already contracted for and assessed, so no new processor or data flow is introduced. External tools offer broader capability but add a supplier, a contract, and a route for data to leave your assessed environment. A practical approach is to use embedded tools for anything touching client data, and external tools for generic drafting and research with identifiers removed.

Do accountants need a written AI policy?

A written policy is not universally mandated, but it is strongly advisable and increasingly expected by insurers, clients, and professional bodies. One page is enough. Cover your approved tools and required settings, the data types that must never be entered, who approves new tools, how often the list is reviewed, what clients are told, and what happens if data is exposed. A short policy people follow offers far more protection than a long one nobody reads.

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A Private Blog Network (PBN) is a collection of websites that are controlled by a single individual or organization and used primarily to build backlinks to a “money site” in order to influence its ranking in search engines such as Google. The core idea behind a PBN is based on the importance of backlinks in Google’s ranking algorithm. Since Google views backlinks as signals of authority and trust, some website owners attempt to artificially create these signals through a controlled network of sites.

In a typical PBN setup, the owner acquires expired or aged domains that already have existing authority, backlinks, and history. These domains are rebuilt with new content and hosted separately, often using different IP addresses, hosting providers, themes, and ownership details to make them appear unrelated. Within the content published on these sites, links are strategically placed that point to the main website the owner wants to rank higher. By doing this, the owner attempts to pass link equity (also known as “link juice”) from the PBN sites to the target website.

The purpose of a PBN is to give the impression that the target website is naturally earning links from multiple independent sources. If done effectively, this can temporarily improve keyword rankings, increase organic visibility, and drive more traffic from search results.

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The real cost of manual accounts payable

You can’t fix what you don’t measure, and that’s exactly why manual accounts payable is so easy to underestimate. For financial controllers and operations directors at mid-sized, growing UK B2B businesses, the true cost of manual AP rarely shows up as a single number on a report—it’s scattered across a handful of metrics that most finance teams aren’t tracking closely enough to notice.

Once you look at accounts payable through the right KPIs, the picture changes. What looked like a manageable, if slightly slow, process usually turns out to be quietly costing far more than the hours spent on data entry—and growing businesses feel it first, as invoice volume starts to outpace what a manual process can absorb.

Key takeaways

  • Manual AP’s true cost shows up across several KPIs, not one visible line item.
  • Cost per invoice and exception rate are the clearest early signals that AP is falling behind.
  • Days Payable Outstanding and on-time payment rate reveal how manual AP affects supplier relationships and cash flow.
  • Sector pressures—regulatory reporting, asset purchase tracking—add extra weight to manual AP for growing businesses.
  • AP automation improves these KPIs directly, not just processing speed.

Here’s what we cover:

What is accounts payable, and why manual processing costs more than it looks

Understanding what accounts payable actually covers—receiving, verifying, approving and paying supplier invoices—makes it easier to see why manual processing is so expensive to run at scale. Each of those steps takes time on its own, but done by hand, errors and delays introduced early tend to compound through every step that follows, and rarely get caught until a supplier query or a reconciliation flags them.

The ap kpis that reveal the true cost of manual processing

A closer look at standard accounts payable KPIs is usually what exposes how much manual AP is actually costing a growing business:

Cost per invoice processed

This is the clearest, most direct measure of manual AP’s cost—every minute spent keying in, matching and approving an invoice by hand adds to it. As invoice volume grows, cost per invoice on a manual process tends to stay flat or rise, rather than falling with scale.

Invoice exception rate

The proportion of invoices that don’t match cleanly against a purchase order or receipt is a strong indicator of how much manual rework AP is generating. A high exception rate usually means data entry errors or missing documentation are creating extra work downstream.

Days Payable Outstanding (DPO)

DPO measures how long, on average, a business takes to pay its suppliers. Manual approval bottlenecks tend to push DPO higher than intended, which can look like a working capital benefit on paper but often reflects delay rather than deliberate strategy—and it erodes supplier goodwill over time.

On-time payment rate

The percentage of invoices paid by their due date is one of the most direct signals of whether AP is keeping pace with the business. A declining on-time rate as transaction volume grows is a clear sign manual processing has hit its ceiling.

Where manual ap breaks down operationally

Behind those KPIs, a few operational gaps are usually responsible:

  • Paper and PDF invoices—every one has to be read and keyed in by hand before it can be processed or matched.
  • Approval bottlenecks—a single delayed approver can hold up payment on an otherwise straightforward invoice.
  • Reconciliation gaps—without automated matching, duplicate or mismatched invoices often aren’t caught until a supplier flags them or the books are reconciled.

That last point is worth expanding on—poor account reconciliation practices around AP make it harder to catch duplicate payments, missed invoices or coding errors before they affect the ledger, which is often where the real cost of manual AP is finally discovered.

Sector-specific ap pressures for growing mid-sized businesses

The cost of manual AP isn’t uniform across sectors. Financial services businesses typically carry additional regulatory reporting requirements on top of standard AP processing—Sage Intacct’s financial services experience is built around that extra layer of scrutiny.

Asset-heavy businesses face a different pressure: invoices for capital purchases need to flow correctly into fixed asset registers for depreciation tracking, not just get paid and filed. Manually bridging AP and fixed asset records is a common source of untracked cost for growing businesses making regular capital investments.

How AP automation improves the kpis that matter

Automating accounts payable doesn’t just speed up processing—it directly moves the KPIs that reveal manual AP’s true cost. Cost per invoice falls as data entry is removed. Exception rates drop as invoices are matched automatically against purchase orders and receipts. On-time payment rates improve as approvals route themselves by rule instead of waiting on individual availability, and DPO reflects intentional payment strategy rather than bottlenecked approvals.

Final thoughts: How Sage Intacct Supports growing finance teams

Sage Intacct builds AP automation directly into its core financials capabilities, so invoice processing isn’t a bolt-on tool sitting outside the ledger. Its extended capabilities extend that automation into the KPI reporting finance teams need to track cost per invoice, exception rates and DPO as the business—and its invoice volume—keeps growing.

Manual AP FAQs

What KPIs should I track to understand the true cost of manual AP?

Cost per invoice processed, invoice exception rate, Days Payable Outstanding, and on-time payment rate together give the clearest picture. Tracked individually, manual AP can look manageable; tracked together, the true cost usually becomes obvious.

What is a good invoice exception rate?

There’s no universal benchmark, since it depends on supplier mix and purchase order discipline, but a rising exception rate over time—regardless of the starting point—is a reliable sign that manual processing is falling behind transaction volume.

Does a high DPO mean AP is performing well?

Not necessarily. A high DPO can reflect deliberate cash flow strategy, but it can equally reflect manual approval delays. The two look identical on a report, which is why DPO should be read alongside on-time payment rate and exception rate, not on its own.

How does account reconciliation relate to accounts payable costs?

Weak reconciliation practices around AP make it harder to catch duplicate payments, missed invoices or miscoded transactions before they affect the ledger—which is often where the real cost of manual AP finally surfaces, sometimes months after the invoice was processed.

Why do sector-specific requirements affect the cost of manual AP?

Regulated sectors like financial services add compliance reporting requirements on top of standard AP processing, while asset-heavy businesses need AP data to flow correctly into fixed asset registers. Both add manual work on top of the core AP process if not handled by connected systems.

How quickly can automation improve AP KPIs for a growing business?

Many finance teams see measurable movement in cost per invoice and exception rate within the first few processing cycles after automation, since both respond directly to reduced manual data entry and automated matching.

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A Private Blog Network (PBN) is a collection of websites that are controlled by a single individual or organization and used primarily to build backlinks to a “money site” in order to influence its ranking in search engines such as Google. The core idea behind a PBN is based on the importance of backlinks in Google’s ranking algorithm. Since Google views backlinks as signals of authority and trust, some website owners attempt to artificially create these signals through a controlled network of sites.

In a typical PBN setup, the owner acquires expired or aged domains that already have existing authority, backlinks, and history. These domains are rebuilt with new content and hosted separately, often using different IP addresses, hosting providers, themes, and ownership details to make them appear unrelated. Within the content published on these sites, links are strategically placed that point to the main website the owner wants to rank higher. By doing this, the owner attempts to pass link equity (also known as “link juice”) from the PBN sites to the target website.

The purpose of a PBN is to give the impression that the target website is naturally earning links from multiple independent sources. If done effectively, this can temporarily improve keyword rankings, increase organic visibility, and drive more traffic from search results.

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AR Automation: How to reduce DSO

Days Sales Outstanding—DSO—measures how long it takes, on average, to collect payment after a sale. For FDs and commercial finance leaders at UK B2B businesses, particularly higher-growth companies under working capital strain, a rising DSO is one of the clearest early signals that collections processes haven’t kept pace with the business.

The frustrating part is that DSO rarely creeps up because customers suddenly stop paying. It’s usually a symptom of manual invoicing, inconsistent follow-up, and limited visibility into which accounts are actually overdue—all things AR automation is built to fix.

Key takeaways

  • DSO measures how long it takes to collect payment after a sale — a rising DSO signals collections friction.
  • Manual invoicing and inconsistent follow-up are the most common causes of DSO creep.
  • AR automation standardises invoicing, reminders and collections so nothing depends on memory.
  • Real-time ageing visibility lets finance act on overdue accounts before they become a cash problem.
  • Reducing DSO frees up working capital without needing new sales or new financing.

Here’s what we discuss in this article:

What is DSO and why it matters

Days Sales Outstanding (DSO) is a measure of the average number of days it takes a business to collect payment after a sale is made. A lower DSO means cash is being collected faster, which directly improves working capital; a rising DSO ties up cash in receivables that could otherwise fund operations, growth or debt reduction. For growing businesses in particular, DSO is often a more immediate cash flow lever than revenue growth itself.

How to calculate DSO

DSO is calculated by dividing total accounts receivable by total credit sales for a period, then multiplying by the number of days in that period. A business with £600,000 in outstanding receivables and £3,000,000 in credit sales over a 90-day quarter, for example, would have a DSO of 18 days—meaning it takes an average of 18 days from invoice to collection.

The calculation itself is simple. The harder part is trusting the inputs behind it. If the accounts receivable figure comes from a spreadsheet that’s only updated periodically, the DSO number is already stale by the time it’s calculated—which is exactly the kind of visibility gap AR automation is designed to close, by keeping receivables data current in real time rather than reconstructed at month end.

Why DSO creeps up in growing UK businesses

DSO rarely rises for one obvious reason. It’s usually the combined effect of a few process gaps that get harder to manage as transaction volume grows:

Manual invoicing and delayed billing

If invoices go out days after a sale is confirmed, the collection clock starts later than it needs to. Manual invoicing also introduces errors—wrong amounts, missing details—that give customers a legitimate reason to delay payment. Moving to electronic invoicing removes many of these errors at the source.

Inconsistent collections follow-up

Without a standard cadence for chasing overdue accounts, follow-up depends on whoever happens to notice an invoice is late. That inconsistency means some overdue accounts get chased quickly, and others sit for weeks.

Disputes and unclear payment terms

Ambiguous payment terms or unresolved disputes are among the most common reasons an invoice goes unpaid past its due date. Without a clear process to flag and resolve disputes early, they tend to sit unaddressed until someone chases them.

Limited visibility into ageing receivables

When AR ageing lives in spreadsheets that are only updated periodically, finance teams often don’t know which accounts are genuinely overdue until it’s already affecting cash flow. Keeping that picture accurate also depends on regular account reconciliation, which is harder to stay on top of without automation. Without embedded accounting connecting invoicing and payment data automatically, that visibility gap tends to persist and widen as the business grows, rather than closing on its own.

The benefits of AR automation

AR automation addresses each of these gaps directly: invoices go out automatically as soon as a sale is confirmed, reminders follow a consistent schedule rather than depending on someone remembering to chase, and ageing receivables are visible in real time rather than reconstructed periodically. Platforms like Sage Intacct build this directly into the receivables process, rather than treating it as a bolt-on tool. The combined effect is usually a meaningfully lower DSO within a few billing cycles, without adding headcount to the credit control function.

Strategies to reduce DSO with AR automation

A few specific practices tend to have the biggest impact on DSO once AR is automated:

  • Automate invoice generation and delivery so invoices go out the moment a sale or delivery is confirmed.
  • Automate reminder sequences that escalate consistently as an invoice approaches and then passes its due date.
  • Offer more payment methods, so payment friction isn’t the reason a customer pays late.
  • Monitor ageing receivables in real time, rather than reconstructing the picture at month end.
  • Standardise the collections workflow and escalation path, so every overdue account is handled the same way regardless of who’s managing it.

These capabilities work best when they sit inside a platform’s core financials, rather than existing as a separate add-on the finance team has to manage on top of the ledger.

How AR automation connects to cash flow visibility

Reducing DSO matters most when it feeds directly into how the business sees its cash position day to day. Connected extended capabilities join receivables data directly into cash flow reporting, so a lower DSO isn’t just a collections metric sitting in a credit control dashboard—it shows up immediately in the numbers finance actually uses to plan.

Final thoughts: Turning a lower DSO into stronger forecasting

That connection matters because DSO directly feeds strategic budgeting and rolling forecasts. When receivables data updates automatically, cash flow forecasts reflect what’s actually being collected, rather than what was expected when the sale was made—closing the gap between what a forecast predicts and what actually lands in the bank.

Reduce Days Sales Outstanding FAQs

What is a good DSO for a B2B business?

There’s no single benchmark that applies across every sector, since it depends heavily on industry norms and standard payment terms. The more useful measure for most finance teams is the trend—whether DSO is falling, rising, or holding steady relative to the business’s own payment terms.

What’s the difference between DSO and AR ageing?

DSO is a single average figure showing how long it typically takes to collect payment. AR ageing is a more detailed breakdown of exactly which invoices are outstanding and how overdue each one is, which is what collections teams act on day to day.

How does AR automation actually reduce DSO?

It removes the delays and inconsistencies that let overdue invoices sit unaddressed—faster invoicing, consistent reminder schedules, and real-time visibility into which accounts need attention all shorten the time between a sale and collecting payment for it.

Does AR automation replace the credit control team?

No—it removes the repetitive parts of the job, like generating invoices and sending routine reminders, so the credit control team can focus on genuine disputes, larger accounts, and relationship-based collections.

How quickly can a business expect DSO to improve after automating AR?

It varies by business, but many finance teams see measurable improvement within a few billing cycles, since automated reminders and real-time ageing visibility start affecting collections behaviour almost immediately.

What’s the difference between AR automation and invoice automation?

Invoice automation typically refers specifically to generating and sending invoices automatically. AR automation is broader, covering invoicing, reminders, payment collection and cash application together as part of the full receivables cycle.

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A Private Blog Network (PBN) is a collection of websites that are controlled by a single individual or organization and used primarily to build backlinks to a “money site” in order to influence its ranking in search engines such as Google. The core idea behind a PBN is based on the importance of backlinks in Google’s ranking algorithm. Since Google views backlinks as signals of authority and trust, some website owners attempt to artificially create these signals through a controlled network of sites.

In a typical PBN setup, the owner acquires expired or aged domains that already have existing authority, backlinks, and history. These domains are rebuilt with new content and hosted separately, often using different IP addresses, hosting providers, themes, and ownership details to make them appear unrelated. Within the content published on these sites, links are strategically placed that point to the main website the owner wants to rank higher. By doing this, the owner attempts to pass link equity (also known as “link juice”) from the PBN sites to the target website.

The purpose of a PBN is to give the impression that the target website is naturally earning links from multiple independent sources. If done effectively, this can temporarily improve keyword rankings, increase organic visibility, and drive more traffic from search results.

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Why UK finance teams can’t close faster

If your close still drags into a second week, you’re not alone—and it’s rarely down to effort. Financial controllers, finance managers and FDs at UK businesses with 20 to 1,000 employees often work flat out, including evenings and weekends, yet the calendar barely moves. The real issue is usually how disconnected the underlying systems and processes are, not how hard anyone is working.

Industry benchmarks suggest that only a small minority of finance teams close within three business days, while the median remains at six days or more. For growing, multi-entity businesses juggling complex approval chains and rising transaction volumes, that gap adds up fast—in reporting delays, audit pressure, and finance teams running on empty.

Key takeaways

  • Close speed is a systems problem, not an effort problem, for growing UK finance teams.
  • Core bottlenecks: manual reconciliation, spreadsheet consolidation, low real-time visibility.
  • AI-powered automation and intelligent agents now separate fast closers from slow ones.
  • Connected financial management software removes the manual work that slows close down most.
  • Faster close frees finance leaders for analysis and strategic decisions, not data-chasing.

Here’s what we discuss in this article:

The state of financial close for UK finance teams today

Businesses have grown more complex over the past few years—more entities, more subsidiaries, more cross-border operations, more transaction volume—but for many organisations, the close process hasn’t kept pace. Finance enterprise software bought a decade ago was built for a simpler structure, and teams have layered spreadsheets, manual workarounds and email approval chains on top of it ever since.

The result is a close process that scales badly. Every additional entity, cost centre or approval step adds time linearly (or worse) rather than being absorbed by the system. That’s why organisations in the 20–1,000 employee range so often report close cycles that haven’t shortened in years, even as the finance function itself has grown.

Why financial close takes so long: The core bottlenecks

Most delays trace back to a handful of recurring bottlenecks. They show up differently depending on the organisation, but the pattern is consistent across UK finance teams.

Manual reconciliation eats the calendar

Reconciling accounts across bank feeds, subledgers and the general ledger is still, for many teams, a manual matching exercise. Every unmatched transaction becomes a research task, and every research task pulls a finance professional away from higher-value work during the busiest week of the month.

Spreadsheets can’t handle multi-entity complexity

Spreadsheets are flexible, which is exactly why they become a liability at scale. Consolidating results across multiple entities, currencies or intercompany transactions in spreadsheets means manually rebuilding logic every period, with no reliable audit trail and a high risk of version-control errors creeping into board-level numbers.

Approvals and sign-off create a queue, not a process

When approvals run through email or ad hoc chasing, close becomes a queue rather than a workflow. A single delayed sign-off—someone on leave, an unclear escalation path—can hold up the entire close, regardless of how quickly the rest of the team has worked.

Finance teams lack real-time visibility until close begins

In many organisations, finance only gets a clear picture of the numbers once close starts, because data lives in disconnected systems until then. That means problems—a miscoded transaction, an unreconciled account, a variance that needs investigating—are discovered late, when there’s the least time to deal with them.

The real cost of a slow close

A close cycle that consistently runs past a week isn’t just an internal inconvenience. It has knock-on effects across the business:

  • Delayed decision-making: Leadership teams make calls on stale numbers, or wait for a close that’s already several days behind schedule.
  • Board and investor reporting pressure: A slow close compresses the time available to analyse results before they’re presented externally.
  • Higher audit risk: Manual reconciliation and spreadsheet consolidation increase the chance of errors that surface later, at a worse time, in an audit.
  • Finance team burnout: Repeated late nights around close are one of the most common drivers of attrition in finance teams, and the cost of replacing experienced finance professionals is high.
  • Opportunity cost: Every hour spent reconciling and chasing sign-off is an hour not spent on forecasting, budgeting or the analysis that finance leaders are increasingly expected to deliver.

What best-in-class UK finance teams do differently

Finance teams that consistently close faster tend to share a few habits, regardless of sector or size:

  • They automate reconciliation rather than reviewing every transaction manually, reserving human review for genuine exceptions.
  • They run consolidation inside a single connected system, not spreadsheets rebuilt from scratch each period.
  • They build close tasks and approvals into a structured workflow with visibility over what’s outstanding, not an email chain.
  • They monitor key accounts and variances continuously, rather than waiting for close to surface issues.
  • They treat close as a process to continuously shorten, tracking cycle time the same way they’d track any other operational metric.

How financial management software closes the gap

The common thread across faster-closing finance teams is that they’ve moved core financials, accounts payable and reporting into one connected system, rather than stitching together disconnected tools and spreadsheets. That’s the practical difference financial management software makes: it removes the manual reconciliation and re-keying work that consumes the most time during close, and gives finance teams a single source of truth throughout the month, not just once close begins.

Platforms like Sage Intacct are built around this idea. Its core financials capabilities automate reconciliation, multi-entity consolidation and inter-company transactions, while its extended capabilities extend that automation into planning and reporting—so the close process draws on data that’s already been validated throughout the month, rather than reconciled from scratch at the end of it.

This kind of accounting reconciliation approach—where financial data flows automatically from the systems that generate it, instead of being manually entered later—is one of the most effective ways UK finance teams have found to take days out of close without adding headcount.

The role of AI-powered automation and intelligent agents

Automation has handled repetitive, rules-based close tasks for years. What’s changed is the arrival of AI-powered automation and intelligent agents that can go further—matching transactions with context rather than fixed rules, flagging anomalies a human reviewer would likely miss, and learning from how a finance team has resolved similar issues in the past.

In practice, this means intelligent agents can pre-match the large majority of reconciling items automatically, leaving finance professionals to focus on the smaller number of genuine exceptions that need judgement. The same applies to accounts payable—automating invoice matching and coding is a natural extension of the same principle, and it’s worth reading how AP automation reduces manual processing time in a way that mirrors what’s happening in close.

For UK finance teams weighing up where to invest first, AI-powered automation tends to deliver the fastest visible impact in close specifically, because close concentrates so much manual, repetitive work into a short, high-pressure window each month.

How Sage Intacct helps UK finance teams close faster

Sage Intacct is designed for the complexity that slows close down most in growing UK businesses—multiple entities, multiple currencies, and industry-specific reporting requirements. Its multi-entity architecture consolidates results in real time rather than at period end, and its industry experience means the chart of accounts, workflows and reporting are configured around how a specific sector actually operates, rather than adapted from a generic template.

Once close speeds up, the value compounds: finance teams with days back in the calendar tend to reinvest that time in strategic budgeting and rolling forecasts, turning finance from a function that reports on the past into one that actively shapes what happens next.

Final thoughts: Closing faster starts with the system, not the team

UK finance teams aren’t failing to close faster because they aren’t working hard enough—they’re working within systems and processes that weren’t built for the scale and complexity they’re now managing. Fixing that isn’t about adding more people to chase reconciliations and approvals; it’s about connecting core financials, AP and reporting into one system, and letting AI-powered automation absorb the repetitive work that currently eats up the calendar every single month.

Financial close FAQs

What is a normal financial close timeline for a UK business?

There’s no single standard, but industry benchmarks suggest most UK finance teams close somewhere between six and ten business days, with only a small proportion closing within three days. Businesses managing multiple entities typically sit at the slower end of that range unless their systems are connected.

Why is financial close slower for multi-entity or multi-subsidiary businesses?

Each additional entity adds its own reconciliations, inter-company transactions and currency conversions that need to be consolidated before group-level reporting is possible. Without a connected system, that consolidation is usually done manually, which adds time with every entity added.

What’s the difference between financial close and month-end reporting?

Financial close is the process of reconciling accounts, reviewing transactions and finalising the ledger for the period. Month-end reporting happens after close is complete, using the finalised numbers to produce management accounts, board packs and other outputs.

How does AI help speed up financial close?

AI-powered automation and intelligent agents can match and reconcile the majority of routine transactions automatically, flag anomalies for review, and learn from how a finance team has resolved similar exceptions previously—reducing the manual matching work that typically takes up most of close.

What is financial management software and how does it support faster close?

Financial management software connects core financials, accounts payable, and reporting into a single system, so data is validated continuously throughout the month rather than reconciled from scratch at period end. That continuous validation is what allows close to shrink from weeks to days.

How long should it take to close the books each month?

Best-in-class finance teams generally aim to close within a few business days, though the right target depends on entity count, transaction volume and reporting requirements. The more relevant benchmark for most UK finance teams is whether close time is trending down year over year, not hitting an arbitrary number.

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PakarPBN

A Private Blog Network (PBN) is a collection of websites that are controlled by a single individual or organization and used primarily to build backlinks to a “money site” in order to influence its ranking in search engines such as Google. The core idea behind a PBN is based on the importance of backlinks in Google’s ranking algorithm. Since Google views backlinks as signals of authority and trust, some website owners attempt to artificially create these signals through a controlled network of sites.

In a typical PBN setup, the owner acquires expired or aged domains that already have existing authority, backlinks, and history. These domains are rebuilt with new content and hosted separately, often using different IP addresses, hosting providers, themes, and ownership details to make them appear unrelated. Within the content published on these sites, links are strategically placed that point to the main website the owner wants to rank higher. By doing this, the owner attempts to pass link equity (also known as “link juice”) from the PBN sites to the target website.

The purpose of a PBN is to give the impression that the target website is naturally earning links from multiple independent sources. If done effectively, this can temporarily improve keyword rankings, increase organic visibility, and drive more traffic from search results.

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VAT Calculator: Use Now To Add & Remove VAT

If you’re VAT registered, you usually need to charge VAT on your taxable supplies at the correct rate. Getting VAT wrong on an invoice can lead to HMRC queries, penalties, and awkward client conversations.

Once the correct VAT treatment has been identified, the calculation itself is usually straightforward: add VAT at the applicable rate to a net price or work backwards from a gross total. But mistakes can happen when switching between rates or reverse-calculating VAT that’s already included.

This guide includes a VAT calculator you can use to add or remove VAT using current UK rates. We also explain how the calculations work, outline the different  UK VAT rates, and cover common scenarios that cause confusion, so you can calculate VAT quickly once you know which treatment applies.

Key takeaways

  • Understand whether you need to add VAT to a price or remove it from a VAT-inclusive amount.
  • The UK uses different VAT rates depending on the goods or services being sold.
  • To remove VAT correctly, work backwards from the VAT-inclusive price using the appropriate VAT rate.
  • VAT-registered businesses must issue accurate VAT invoices and maintain VAT records.
  • Making Tax Digital requires eligible businesses to keep VAT records digitally and submit returns using compatible software.

Here’s what the article covers:

VAT calculator (estimator) to add and remove VAT

The online VAT calculator (estimator) below can help you work out VAT in either direction, depending on the number you start with.

If you give the calculator a price before VAT, it will add VAT at the rate you choose and show you both the VAT amount and the total price with VAT.

The calculator can also work backwards. If you start with a total price that already includes VAT, the calculator shows you the VAT amount and the original price before VAT.

This is useful when you’re preparing invoices, checking supplier bills and receipts, or verifying figures before submitting your VAT return. The calculator uses current UK VAT rates and follows standard VAT calculation methods. It supports the arithmetic only — it can’t determine whether a supply is standard-rated, reduced-rated, zero-rated, exempt or outside the scope of VAT, so you’ll still need to confirm the correct VAT treatment first. It’s designed as a quick reference and not as a substitute for proper accounting records or professional advice.

* This calculator estimator applies the UK VAT rates in force as of July 2026 and is a general guide only. It does not determine the VAT treatment of a supply — confirm that with HMRC or a qualified accountant.

What are the VAT rates in the UK?

In the UK, VAT is charged at different rates depending on what you sell and, in some cases, how it’s supplied. The standard rate has been 20% since 4 January 2011, and before that it was 17.5% for nearly two decades. However, the VAT liabilities and reliefs that apply to specific goods and services can and do change. The uncertainty usually comes from working out which rate applies to a particular good or service.

The rules around VAT rates and how different goods and services are treated set out where the standard, reduced and zero rates apply. Where something isn’t specifically covered, the standard rate usually applies.

Standard VAT rate

The standard rate is 20% and applies to most goods and services in the UK. Any taxable item that doesn’t qualify for a reduced or zero rate falls under the standard rate.

This typically includes:

  • Professional and consultancy services
  • Most consumer goods
  • Business services
  • Digital products and subscriptions

When businesses talk about “charging VAT”, they are usually referring to VAT at the standard rate.

Reduced VAT rate

The reduced VAT rate is 5% and applies to a limited range of goods and services for specific policy reasons. Whether something qualifies depends on what’s being supplied and how.

Common examples include:

  • Domestic fuel and power, including home utilities
  • Some energy-saving materials installed in residential properties, where the detailed conditions are met
  • Some mobility aids for older people

Because the reduced rate is more narrowly defined, it’s important to check the details rather than assume it applies.

Zero VAT rate

The zero rate of VAT is 0%. Zero-rated sales are still taxable for VAT purposes, even though no VAT is added to the price.

Common zero-rated items include:

  • Many basic foods and drinks, subject to detailed rules and exceptions
  • Children’s clothing and footwear
  • Books, newspapers and magazines, subject to the relevant VAT rules
  • Most passenger transport

You may also be able to zero rate qualifying goods you export from Great Britain to somewhere outside the UK, or from Northern Ireland to somewhere outside the UK and EU, provided the relevant conditions and evidence requirements are met. Zero rate means you still account for VAT on your invoices, but the rate is 0%.

If you’re VAT registered, zero-rated sales still count towards your taxable turnover and must be included on your VAT return.

Zero rating is not the same as being VAT-exempt or out of scope. Those categories follow different rules and can affect whether you can reclaim VAT on related costs.

Zero rating for items like most food, children’s clothing, and books has been part of the VAT system since its early years. Reduced rates have been applied more selectively, typically to domestic fuel and energy-saving materials. The list of qualifying items has changed over time, and the detailed rules continue to evolve.

How to work out VAT

Working out VAT starts with knowing whether the price you’re looking at already includes VAT or not.

If you’re adding VAT to a net price, you calculate VAT as a percentage of that amount. If you’re removing VAT from a total, you need to work backwards to find the net figure first.

Adding VAT to a price

When you’re preparing an invoice, you multiply the net price by the applicable rate to add the VAT.

Formula:

  • 20% VAT rate: multiply by 1.20
  • 5% VAT rate: multiply by 1.05
  • 0% VAT rate: the price remains the same

The result in each case equals the total including VAT.

So if you’re charging £500 for a product or service at the standard rate, your calculation would be: £500 × 1.2 = £600

Your total for the VAT invoice would be £600: £500 is the net amount and £100 is VAT.

This method applies regardless of the VAT rate being used and follows the standard rules set out for how VAT works in practice.

Removing VAT from a total

Removing VAT is where mistakes tend to happen. If you have a total that already includes VAT, you can’t just take 20% off. That gives the wrong answer. You need to divide.

Formula:

  • 20% VAT rate: divide the total by 1.20
  • 5% VAT rate: divide the total by 1.05
  • 0% VAT rate: the price remains the same

The result in each case equals the net price before VAT.

Formula: Total including VAT ÷ 1.2 = Net price

Say you’ve been invoiced £360 including VAT:

£360 ÷ 1.2 = £300

The net was £300, and the VAT in that total was £60.

Reverse VAT calculation matters when you’re checking supplier bills and receipts or working out how much you can reclaim. The VAT was worked out on the original net price, not the final total, which is why dividing works and subtracting doesn’t.

Zero rate sales

For zero-rated goods and services, VAT is charged at 0%. The net and total prices are the same, but the sale still counts as taxable for VAT purposes.

History of VAT rate changes in the UK

VAT has been part of the UK tax system for over 50 years. While the rules around VAT handling for businesses today are fairly settled, the standard rate has changed multiple times, usually in response to wider economic decisions.

VAT was introduced in the UK in 1973, when the UK joined the European Economic Community. It replaced Purchase Tax and Selective Employment Tax, which were seen as less consistent ways of taxing spending.

When VAT was first introduced in April 1973, most goods and services were charged at a single rate of 10%. Many essential items, like food, fuel and housing, were relieved from VAT rather than charged at the standard rate.

Between 1974 and 1991, the rate changed frequently as governments experimented with VAT as a fiscal tool:

  • In 1974, the standard rate dropped to 8% and a higher rate of 25% was introduced for petrol and luxury goods
  • In 1976, the higher rate was cut to 12.5%
  • In 1979, the dual-rate system was abolished and the standard rate increased to 15%
  • In 1991, the standard rate rose to 17.5%, where it remained for almost 20 years

For many businesses, the 17.5% rate became most closely associated with VAT and appeared consistently in pricing, contracts, and accounting records throughout the nineteen nineties and early two thousands.

Temporary reduction and move to 20%

During the 2008 financial crisis, the government temporarily reduced VAT to encourage consumer spending. From December 2008 to December 2009, the standard rate was cut from 17.5% to 15%. In January 2010, the rate returned to 17.5%.

One year later, on 4 January 2011, the standard rate increased to 20%. This remains the standard rate applied to most goods and services in the UK today.

How to apply VAT to invoices

If you’re VAT registered, your invoices must show VAT correctly. A proper VAT invoice tells customers how much VAT they paid and allows them to reclaim it if they’re VAT registered.

When you need to issue a VAT invoice

You must issue a VAT invoice when you supply taxable goods or services to another VAT-registered business. This applies to sales charged at the standard rate, reduced rate and zero rate.

VAT invoices must be issued within 30 days of the date of supply. For sales of £250 or less including VAT, you can issue a simplified VAT invoice instead of a full one.

A simplified VAT invoice must show:

  • Your business name and address
  • Your VAT registration number
  • The time of supply (the tax point)
  • A description of the goods or services supplied
  • The total amount payable, including VAT
  • For each rate of VAT chargeable, the gross amount payable including VAT
  • The VAT rate applicable

Simplified invoices are commonly used for receipts and small retail transactions.

What a full VAT invoice must include

A full VAT invoice needs to show specific information. This isn’t optional, and missing details can cause problems later.

A full VAT invoice must include:

  • A unique sequential number, based on one or more series, that identifies the invoice
  • The time of supply (the tax point)
  • The date of issue
  • Your business name, address and VAT registration number
  • Your customer’s name and address
  • A description sufficient to identify the goods or services supplied
  • For each description, the quantity of the goods or the extent of the services, the VAT rate, and the amount payable excluding VAT
  • The unit price
  • The gross total amount payable, excluding VAT
  • The rate of any cash discount offered
  • The total amount of VAT chargeable, expressed in sterling
  • Where relevant, the reference or wording required for zero-rated, exempt, reverse charge or margin scheme supplies

If you charge more than one VAT rate on the same invoice, the invoice must make clear which items are subject to each rate and the VAT charged for each rate.

Showing VAT on invoices

When invoicing another business, prices are usually shown excluding VAT, with VAT added as a separate line. This makes it clear how much VAT has been charged and how much can be reclaimed.

For consumer sales, prices are often agreed inclusive of VAT. Even in those cases, if you issue a VAT invoice it still needs to show how much VAT is included in the total.

If you’re not VAT registered

If you’re not VAT registered, you must not charge VAT or show any amount as VAT on your invoices.

Some businesses choose to add a note to say they’re not VAT registered. This isn’t required, but it can help avoid confusion.

Keeping invoice records

You need to keep VAT records long enough to support the figures you submit and to allow HMRC to check older periods if needed.

That means keeping copies of the VAT invoices you issue and those you receive for at least six years, unless HMRC agrees a shorter period or another rule requires you to keep them for longer. This applies whether your records are paper-based, digital, or a combination of the two.

In practice, invoice records should make it clear:

  • What was supplied
  • When it was supplied
  • The amount charged before VAT
  • The VAT charged and the rate used

For purchases, records need to show that the VAT relates to business expenses and that the invoice supports the amount reclaimed.

Believe it or not, those records may come in handy long after you’ve sent in your return. You may need to review old invoices when you’re checking past VAT returns, reconciling your accounts across periods, or verifying how you handled specific transactions.

Any digital invoices must remain easy to read and access for the entire time they are kept. This includes electronic invoices, like PDFs or receipts from the web, which should be kept in a way that preserves the information needed to support your VAT records and VAT returns.

When you keep your records in order as you go, it makes it easier to handle VAT reviews and end-of-period checks, especially when the number of transactions goes up.

Using accounting software for VAT compliance

For VAT-registered businesses within Making Tax Digital, submitting a VAT return goes hand in hand with a set of digital record-keeping requirements, unless an exemption applies.

Making Tax Digital means that, where it applies, VAT figures need to come from digital records and be submitted using compatible software. For many small businesses, that has changed how VAT is handled in practice. Instead of being worked out at the end of the quarter, VAT is usually recorded as part of everyday bookkeeping.

Invoices, expenses, and adjustments are recorded as they happen, and the VAT return is built up from those records. When it’s time to submit, the figures are already there and can be reviewed before the return is sent.

This doesn’t remove the need to check your numbers, but it does reduce the amount of manual work involved and helps keep records consistent with current requirements.

If you want to manage VAT as part of your day-to-day accounts, Sage Accounting brings VAT records and VAT submissions together in one place, depending on the features included in your plan and how your business is set up.

VAT calculation FAQs

Who needs to register for VAT?

VAT registration is usually required once taxable turnover goes over £90,000 over a rolling 12-month period (in place since April 2024), and you can deregister if it drops below £88,000. You may also need to register if you expect your taxable turnover to go over £90,000 in the next 30 days alone.

That turnover includes standard-rated, reduced-rate, and zero-rated sales. It doesn’t include exempt or out-of-scope income.

Some businesses register before they reach the threshold. Whether that’s useful depends on how the business operates and who it sells to.

How do you register for VAT?

You register for VAT online through HMRC’s website, although the process can vary depending on your business type and circumstances. You’ll need your business details, recent turnover figures, and information about what you sell.

The process usually takes a few weeks. Once registration is complete, you’re issued a VAT registration number. From that point, you charge VAT on your sales, keep VAT records, and submit returns to HMRC.

The effective registration date determines when you must start charging VAT, which may be earlier than your application date.

When can you reclaim VAT on purchases?

VAT on purchases (input tax) can usually be reclaimed when the purchases are used for your taxable business activities, provided you’re VAT registered, the VAT was correctly charged, and you hold valid evidence, such as a VAT invoice.

It can’t normally be reclaimed for private spending, and some categories of spending, such as most business entertainment, may be restricted or blocked.

Where something is used partly for business and partly for private purposes, VAT recovery usually needs to be apportioned to reflect that split — for example, on the leasing of vehicles. Keep invoices and records that support the amounts you reclaim.

How do you reclaim VAT?

VAT is reclaimed through the VAT return.

The return sets the VAT charged on sales against the VAT paid on eligible purchases. If your reclaimable input VAT is more than the VAT you owe on your sales, HMRC may repay the difference. If the VAT due on your sales is more, the balance is paid with the VAT return.

You must keep records and VAT invoices in order to support the figures used.

How do discounts affect VAT?

VAT is based on what the customer actually pays.

If a discount is applied at the time of sale, VAT is worked out on the reduced amount. If a discount is applied later, for example, through a refund or credit note, the VAT position needs to be adjusted accordingly.

Do zero-rated sales still count?

Yes. Zero-rated sales still count as taxable turnover, even though VAT is charged at 0%.

If you’re VAT registered, they need to be included in your VAT records and VAT return. They can also affect whether VAT registration is required.

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PakarPBN

A Private Blog Network (PBN) is a collection of websites that are controlled by a single individual or organization and used primarily to build backlinks to a “money site” in order to influence its ranking in search engines such as Google. The core idea behind a PBN is based on the importance of backlinks in Google’s ranking algorithm. Since Google views backlinks as signals of authority and trust, some website owners attempt to artificially create these signals through a controlled network of sites.

In a typical PBN setup, the owner acquires expired or aged domains that already have existing authority, backlinks, and history. These domains are rebuilt with new content and hosted separately, often using different IP addresses, hosting providers, themes, and ownership details to make them appear unrelated. Within the content published on these sites, links are strategically placed that point to the main website the owner wants to rank higher. By doing this, the owner attempts to pass link equity (also known as “link juice”) from the PBN sites to the target website.

The purpose of a PBN is to give the impression that the target website is naturally earning links from multiple independent sources. If done effectively, this can temporarily improve keyword rankings, increase organic visibility, and drive more traffic from search results.

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