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Cyber threats do not stop at large corporations.

Businesses of all sizes, especially smaller ones, are increasingly attractive to attackers because criminals assume they lack the same defences as a large corporation. A single phishing email or weak password can expose sensitive data, disrupt operations, and damage customer trust.

Fortunately, protecting your business does not require expensive technology.

Your people can be your greatest asset. By creating a security champion program, you can empower employees to act as ambassadors for cyber security, spreading awareness and strengthening resilience across your business.

In this article you’ll learn what a security champion program is and why it matters for small organisations, plus how to set one up step by step, and the common pitfalls to avoid.

Here’s what we cover:

Why start a security champion program?

A security champion program is a simple way to spread cyber security knowledge and responsibility across your business.

Instead of relying only on IT or outside providers, you nominate and train employees from different teams to act as ambassadors for good practices. They help raise awareness, answer questions, and reinforce secure habits in everyday work.

A security champion network gives you an extra layer of cyber security defence without significant costs. Instead of security being a one-off training session or one person’s job, it becomes part of your culture. That shift helps your business stay safer day to day.

The value and benefits are tangible in four key areas:

• Return on investment: You already spend money on tools such as antivirus software or firewalls. Champions help you get more from those tools by ensuring people know how to use them and follow the right processes. A small amount of time invested in training and coordination can save thousands in potential breach costs.
• Risk management: When staff know how to spot phishing emails, weak passwords, or suspicious links, you cut the odds of a costly incident. Champions become your early warning system, flagging problems before they escalate.
• Brand reputation: Customers and partners want reassurance that their data is safe. A visible culture of security shows you take their trust seriously, which can become a differentiator when winning new business.
• An always-on message: Training once a year is not enough. Champions keep security at the forefront of their minds by reinforcing habits in daily work, from checking emails to using secure file sharing.

Read this article for more context on threats and why they matter.

A step-by-step playbook for creating your cyber security champion program

Launching a security champion program is easier if you break it into stages. You can pace it to fit your business, but here is a simple three-month road map to get you moving.

Weeks 1—2: Recruit volunteers

Invite employees from across the company. Look for people who are curious, detail-oriented, or interested in professional growth. Aim for at least one champion per team so security messages reach everyone.

Weeks 3—4: Set goals

Tie the program to your wider cyber security plan. Goals might include reducing phishing clicks by half in six months, improving password hygiene, or ensuring all employees complete training on time.

Weeks 5—6: Incentivise participation

Position the role as a career opportunity, not just an extra task. Recognise champions in team meetings, highlight their contribution in internal updates, or offer small rewards.

Weeks 7—8: Provide training and resources

Give champions simple materials they can share. Use free resources from industry bodies, adapt existing training, or create short explainers. Avoid jargon and focus on everyday behaviours.

Weeks 9—10: Communicate

Set up regular channels to keep the program visible. A short monthly meeting, a group chat, or a weekly security tip email can all work. Champions should reinforce good habits without overwhelming colleagues.

Weeks 11—12: Measure progress

Start tracking results such as phishing simulation scores, incident reports, or training completion rates. Share this data with leadership to demonstrate impact.

Month 3 onward: Secure leadership support, scale, and sustain

Ask managers to back the program openly. Rotate roles to prevent burn out, refresh training, and connect the initiative to broader business goals such as talent development or well-being.

Roles within your security champion team

A successful security champion program relies on people who understand your business and your systems. Even in a small team, defining roles keeps things organised and helps champions play to their strengths.

You don’t need formal titles or new job descriptions. Just assign light responsibilities that build confidence and accountability.

Here are some examples:

• Program lead: Coordinates activities, tracks progress, and updates leadership. This might be your office manager, IT lead, or even a trusted senior team member.
• Trainer: Explains new security practices in plain language and helps colleagues apply them daily.
• Researcher: Stays informed about new threats and shares quick, practical summaries with the team.
• Communicator: Keeps awareness high through short messages, posters, or quizzes. They might also share quick wins or lessons learned.
• Planner: Documents incident procedures, maintains checklists, and ensures follow-up actions are complete.

Small businesses often combine these duties. The goal is not formality. It’s engagement. When everyone has a clear role, security becomes everyone’s job, not a side task that fades after training.

You do not need a large budget or advanced systems to launch your program. The right mix of tools and free resources can help your team stay informed and confident.

You can start with what you already use. Communication tools such as Slack, Microsoft Teams, or email groups make it easy for champions to share updates and reminders. Cloud storage and password managers can also add a layer of safety without extra complexity.

Many government and industry organisations offer free content for training, including phishing simulations, posters, and short courses. Encourage champions to use these materials to run quick awareness sessions or share weekly security tips.

AI can also help your program run smoothly. You can:

• Create awareness campaigns using AI-generated emails, posters, or quizzes.
• Translate technical security updates into everyday language your team can understand.
• Draft educational content or quick reference guides for employees.

The key is to keep tools simple and accessible. Your champions do not need complex systems—just clear communication, reliable resources, and leadership support.

Common pitfalls and how to avoid them

Even well-intentioned security programs can lose momentum without the proper structure. Here are a few challenges small businesses often face—and how to avoid them.

• Over-extension: Champions are usually volunteers, so keep responsibilities light and realistic. Focus on small, consistent actions that make a clear difference.
• Lack of visibility: If the program goes quiet, people forget it exists. Share updates, celebrate wins, and make your champions visible during meetings or on internal channels.
• Data overload: Tracking too many metrics can waste time. Focus on a few meaningful numbers, such as phishing simulation results or incident reports.
• Apathy: People tune out when security feels like a chore. Use short, relatable stories or real examples to show how small actions prevent real losses.
• Weak direction: Without leadership support, programs stall. Managers should remind teams that security is part of business success, not an IT afterthought.

Final thoughts

A security champion program is one of the simplest and most cost-effective ways to strengthen your defences, just committed people who understand that security is part of doing business.

Your program will depend on how well you keep it alive. Refresh goals regularly, rotate roles to keep people engaged, and keep communication open between champions and leadership. The moment a program goes quiet, habits start to fade, and risks grow.

Keep your approach light but consistent. A short monthly meeting, a few friendly reminders, and visible leadership support can go a long way toward building a lasting culture of awareness.

Your employees are your first and strongest line of defence. When they understand how to recognise threats and respond confidently, they protect your data, reputation, and bottom line.

 

Remember when Black Friday was just a day? Well, that’s all changed now. 

Many retailers will be preparing early Black Friday deals, giving the entire month of November the Black Friday treatment. 

This article addresses the core areas of consideration for your retail business if you’re looking to win big during this busy selling season. 

Explore where you can leverage technology to create bandwidth and make Black Friday frictionless and profitable. 

Here’s what we cover: 

Black Friday finances: Is it a good idea for you? 

The rise of online shopping means its easier than ever to get customers to come to you, but you’ll need to get creative with how to connect keen sales shoppers with your discounted merchandise to keep your profits up and your customers engaged. 

Taking an e-commerce approach and selling your products online (if you’re not already) is just one way to benefit from the Black Friday phenomenon. 

First thing’s first. If your business runs a fine line between profit and loss in its day-to-day operations, you need to decide if running Black Friday sales is the right move.  

Here’s some suggestions:

• Examine your financial health, via profit and loss statements.
• Run some projections to find out if your business model can really support not only item price cuts, but the temporary expansion of staff and expenses, such as increased marketing or advertising budgets, you might need to accommodate this potential demand.  
• Does it make sense to hire additional customer service contractors to deal with an increase in order enquiries? If stock sells out, will you need extra warehouse staff on hand to pick and pack?
• Are there any issues in your supply chain that would prevent items getting to the customers on time? 

Aside from these logistical and financial considerations, you should also make sure you’ve got the ability to capture the right data from this event.

Understanding your customers’ buying patterns, locations, and reach potential is an essential part of growing the business and making the following year even better. 

Getting the right financial, inventory, and supply chain software can help manage insight for you, rather than manually collating various spreadsheets of customer and stock data yourself. 

Assessing shopper behaviour for stock management on Black Friday

You will need to stock up for elevated sales, whether that’s in stores or online. That means more stock needs to be warehoused, or transported, and that comes with a cost. 

Look at your data from last year to gauge how much inventory you need to both in-store and online. Did you have any surprises in the stock you thought was going to sell well and didn’t or the reverse? 

Investing in stock insight is important for creating the capacity needed to manage high demand during peak trading season. 

You can ensure you have enough inventory for the influx in demand during Black Friday, Cyber Monday, and well into the Christmas shopping season. 

Accepting payments for Black Friday sales 

Without a secure, fast payment system, your Black Friday gains will be limited. Generational preferences and how comfortable shoppers are with payment technology will also factor greatly into your success. 

Today’s customer journeys are increasingly varied, and can be immediate or extremely complex, especially for the younger or oldest demographic.

Setting up a fluid payment system via social media is essential in our modern, connected work. Some social media platforms can take you to your purchase page immediately, while others risk dropping the customer via a series of convoluted steps.  

Journeys can range from impulse purchases on shopping or social media apps to lengthier, highly considered purchases involving multiple channels for product research and price comparison—even during Black Friday sales. 

Consider weaving accessibility into your purchase journey. Ensuring your website meets accessibility standards, and is mobile-friendly, for example, can increase customer trust in the payment system. Demand for mobile payments and digital wallets is growing, so it’s worth exploring these as part of your payment methods. 

Integrate the payment process into your omnichannel customer offering for a frictionless Black Friday experience. 

To do so, you should consider the customer’s expectations at each point in their journey and ensure your payment technology can accommodate any scenario of sale regardless of channel or preferred payment method. 

Retailers of any size will stand out by offering simplicity, convenience, and durable, well-defined value in their approach to payments. 

For online retailers, a diverse offering of payment methods is critical to customer experience. 

We know from research over the years that consumers generally can be up to four times more likely to complete a purchase if they see a wide variety of payment types presented to them at checkout. 

Managing Black Friday payments security during increased traffic 

You should also consider the security of your customers’ financial and personal data, and factor in protection against fraud. 

In 2018, the EU passed a new framework, commonly known as GDPR mandating secure storage of customer’s data. If you trade with any customers in EU countries, and hold their data, you must comply with the terms of this requirement.  

While existing businesses have been compliant since the change, if you’re starting a new business to take advantage of Black Friday sales, you should factor in additional technology costs of this into your plan and budget. 

More innovation that supports improved customer data protection is tokenisation, which allows safe storage of your unique card details providing access to the original payment information regardless of the contact point. 

Shoppers have grown more willing to use new payment technology, but they’re still concerned about the safety of their personal information. 

Research shows 62% are generally welcoming towards added authentication measures for online payment security as mandated by PSD2. 

New authentication technologies will revalidate repeat purchases or return shoppers to the website and make their experience even more frictionless. 

Hiring Black Friday staff 

Even with everything else in place, you’ll still need to ensure you have enough staff coverage to deal with stock management and preparing items for delivery. 

Insights from a business management solution can tell you how many additional staff you’ll need to hire. It can also help you with hiring, and onboarding and managing schedules. 

Adding more staff—temporary or full time—means more payroll admin of assigning employee types and calculating accurate pay and benefits for each. 

Doing this accurately will be more challenging during the busy Black Friday season, especially if it’s done manually. 

Payroll integration technology with time tracking and attendance functionality can make peak season staffing easier. 

Connecting your time and sales data is important for reconciliation purposes, eliminating data errors, and reducing payroll fraud. 

Keeping track of this data can also help with planning for other peak trading seasons. 

A business management solution equipped with automation can make this easy and error-free for any size staff. 

Final thoughts on preparing for Black Friday 2025

Black Friday is a fast-paced selling season. Even more so now than ever, if your customer doesn’t get the experience they expect, you might lose a future sales opportunity. 

Utilise new technology for business management to stay on top of cash flow and ensure whatever they buy, gets to them quickly.

With careful inventory and stock management, staffing decisions, reporting, and the right marketing approach, you’ll keep things running smoothly at the online checkout for one of the biggest shopping events of the year. 

Editor’s note: This article was first published in October 2019 and has been updated for relevance. 

Black Friday is a day celebrated throughout many parts of the world as an opportunity to get amazing deals and boost sales, but for small business owners, it’s more than just one day of discounts.

It also represents a great opportunity to influence your financial success for months to come. When it comes to reporting, you need to do more than just track numbers, but also understand your performance and use this knowledge to make informed decisions that benefit your business long-term.

In this article, you’ll discover how to create a robust reporting strategy that not only tracks your Black Friday performance, but also informs your future planning and payroll decisions, setting you up for continued growth and success.

Why Black Friday reporting matters

Black Friday presents a unique opportunity for small businesses to boost revenue, but the aftermath can be just as important as the event itself.

Proper reporting enables you to analyse what worked and what didn’t, helping you refine your strategies for future sales events. It also allows you to manage cash flow effectively, ensuring you can meet payroll obligations while taking advantage of the post-event landscape.

By focusing on your finances, you can uncover insights that go beyond surface-level sales figures. Understanding your performance metrics, customer trends, and overall business health will help you make smart and agile decisions.

Understand how to approach Black Friday reporting from a financial perspective and make sure your business is set up to continue thriving beyond the sales rush.

Preparing for Black Friday reporting

1. Set clear objectives

Before Black Friday, you need to define what success looks like for your business. Are you aiming for a specific sales target? Do you want to increase customer acquisition or boost repeat purchases? Establishing clear objectives will help you to tailor your reporting efforts.

For instance, if your goal is to increase sales by 25%, your reporting should focus on tracking sales figures against this target. Setting objectives not only guides your reporting, but can also be helpful when it comes to allocating your resources effectively during the event.

2. Organise your data

Gathering accurate data is crucial for effective reporting. Make sure you have access to your sales, inventory, and payroll data before the event, and organise this information in a way that makes it easy to analyse and track. You might want to consider using accounting software that integrates with your point-of-sale systems, to automate and simplify your data collection process.

When you have a well-structured data set, you can monitor real-time performance on Black Friday, providing insights into which products are flying off the shelves and which ones may need a bit more of a marketing push.

Key metrics to track for Black Friday

When it comes to Black Friday reporting, not all data points are created equal. Focus on the metrics that matter most to your financial health. These would usually include:

1. Sales performance

Track total sales, average transaction value, and the number of transactions that you’re getting. You can then compare these figures to previous years and your objectives—for example, if you recorded 300 transactions with an average sale of £50, your total sales would be £15,000. This gives you a clear picture of how you performed and how you might benchmark this for future sales.

2. Profit margins

Understand your profit margins by calculating the difference between the sales you make versus your costs to help you know whether your discounts were sustainable. For example, if a product costs you £30 to produce or purchase and you sell it for £24 after applying a 20% discount, you might be making £24 in revenue, but you’re losing £6 in reality.

3. Customer acquisition costs

You should also keep an eye on how much it costs to acquire new customers during Black Friday. It’s a good idea to track marketing expenses against new customer sales, assessing your Return On Investment (ROI). For example, if you spent £1,000 on advertising and gained 50 new customers, your acquisition cost would be £20 per customer. This data can help to inform your marketing strategies moving forward and where is best to spend money for maximum results.

Post Black Friday reporting

Once the dust settles, it’s time to analyse the data you collected. This is where the real value of your reporting shines through.

1. Review performance against objectives

Take a close look at how your actual results compare to the objectives you set. Did you meet your sales target? How did your profit margins hold up? Evaluating performance will highlight areas for improvement and validate successful strategies.

Say you achieved a 30% increase in sales compared to last year, you might want to explore what factors contributed to that success—was it a targeted marketing campaign, improved inventory management, or enhanced customer engagement?

2. Analyse customer feedback

Speak to your customers when the sale is finished to gather feedback on their experiences. Surveys can provide valuable insights into what your customers liked or disliked about your Black Friday offerings, and you can then use this feedback to build out an even better promotion next time.

3. Adjust your payroll strategy

Once you’ve analysed your sales data, it’s time to consider how your payroll strategy aligns with your performance. If your sales exceeded expectations, you might want to consider hiring seasonal staff to maintain service quality. However, if sales fell short, you’ll need to carefully manage your payroll budget moving forward.

If your sales data suggests you need additional support for the holiday period, you can then plan to adjust your staffing levels accordingly. This proactive approach means that you have the right resources in place to capitalise on potential opportunities in the future.

Tips for effective Black Friday reporting

To help you nail your Black Friday reporting, here are some practical tips:

1. Make the most of reporting tools: use accounting software that offers reporting capabilities, helping you to streamline data collection and analysis, and save time and effort.
2. Create a reporting template: develop a consistent reporting template to help you track key metrics easily, making sure you don’t miss important data points in your analysis.
3. Schedule time for reflection: after the event, set aside dedicated time to review your findings. This reflection period can be absolutely crucial for identifying trends and planning your next steps.
4. Involve your team: get together with your staff to gather insights. Their experiences during Black Friday can provide valuable context to the numbers, giving you a more comprehensive understanding of your overall performance.

Final thoughts for Black Friday 2025

Black Friday can be a great opportunity for your small business, but its true value lies in how well you prepare and review your performance.

By focusing on thorough pre- and post-Black Friday reporting, you can gain valuable insights that inform smarter financial decisions, optimise future promotions, and strengthen your overall strategy.

Think of Black Friday as more than a day of sales, but as a learning experience that helps your business thrive in the long run. With the right approach, you’ll not only celebrate the successes of this peak shopping day but also build a more resilient and profitable future.

If you’re a business owner or part of an accounting team, you know how important it is to get paid on time.

But just sending invoices isn’t enough, you also need a clear view of how well your business manages incoming payments.

That’s where tracking Accounts Receivable (AR) metrics comes in.  

Monitoring the right AR metrics helps you safeguard your cash flow, reduce Days Sales Outstanding (DSO), and keep your finances running smoothly.

And when you’re on top of your AR performance, your whole business benefits—from better planning to stronger customer relationships.

Discover why tracking AR metrics matters, which accounts receivable KPIs are most useful, and how to improve your performance with the right tools. 

Here’s what we’ll cover:

Why tracking accounts receivable metrics matters

Tracking accounts receivable performance metrics ensures the oversight of your cash flow and your company’s financial stability.

When you track the right AR metrics, you see how well your receivables process is working and where you can improve.

These insights can make a big difference in key areas of your business, including: 

Cash flow and working capital

Every day an invoice goes unpaid is a day your business might struggle to cover operating costs.

Tracking AR metrics makes sure you stay liquid and avoid cash crunches. 

Business health

Late or missed payments can signal bigger issues.

Regular AR tracking warns your team about customer behaviour or internal inefficiencies. 

Benchmarks and goals

Setting AR goals based on your metrics helps your team stay focused, improve collection efforts, and align with industry standards.

The most useful accounts receivable KPIs to track

There are plenty of AR metrics your team could monitor. To truly protect your cash flow, it’s best to focus on the ones that matter most.

These key performance indicators offer clear insights into how effective your credit control process is and where there’s room for improvement. 

Here are 10 of the most useful KPIs to keep an eye on: 

1. Days Sales Outstanding (DSO) 

DSO measures the average number of days it takes to collect payment after a credit sale.

It reflects how quickly your business converts receivables into cash.  

Why it matters 

A high DSO indicates that customers are taking longer to pay, which can lead to cash flow issues and impact working capital.

A low DSO suggests your accounts receivable process is efficient and you’re collecting payments timely.  

Formula

DSO = (Accounts receivable ÷ Total credit sales) × Number of days in period 

DSO targets vary significantly across UK sectors.

For example, retail businesses typically aim for 30–40 days, construction firms often see 60+ days, and SaaS companies may target 20–30 days.

Always benchmark your DSO against sector-specific data from sources like the Office for National Statistics and tailor targets to your customer base and payment terms.

2. Average Days Delinquent (ADD)

ADD measures the average number of days invoices remain unpaid past their due date.

It helps you understand how often and how long customers are missing payment deadlines.  

Why it matters

A high ADD indicates poor payment behaviour or issues in your credit control process.

It can signal cash flow problems and the need for tighter credit controls.

Monitoring ADD helps you assess the effectiveness of your follow-up and payment policies. 

How to improve the numbers

• Send regular payment reminders before and after due dates.  

• Offer early payment discounts to encourage faster payments. 

• Follow up promptly on overdue invoices with clear and consistent communication. 

• Review and adjust customer credit if needed. 

3. Cost Effectiveness Index (CEI)

CEI measures how efficiently your team collects outstanding receivables over a specific period.

It reflects your ability to turn invoices into cash and is a key indicator of AR team performance. 

Formula

CEI = (Beginning AR + Monthly credit sales – Ending AR) ÷ (Beginning AR + Monthly credit sales – Ending AR from bad debt) × 100 

A CEI between 80% and 90% is considered strong, while 95% or higher indicates excellent collection performance.

A consistently high CEI suggests that your credit control process is timely and effective, while a lower CEI may point to collection delays or growing bad debt. 

4. Bad debt ratio 

The bad debt ratio estimates the proportion of receivables you expect not to collect, while the write-off ratio measures actual losses.

It reflects how much potential revenue has been lost due to customer non-payment. 

Why it matters 

A high bad debt ratio signals increased credit risk and may indicate issues with customer screening or the effectiveness of your credit control process.

It also impacts profitability and cash flow, making it a critical metric for assessing the overall health of your receivables. 

How to reduce it 

If you’re tracking this metric and notice it’s higher than expected, consider taking action to lower it: 

• Strengthen credit checks before extending terms to new customers. 

• Set shorter or stricter payment terms for higher-risk clients. 

• Follow up early and consistently on overdue invoices. 

• Offer flexible payment plans to encourage repayment before accounts are written off. 

5. AR turnover ratio 

The accounts receivable turnover ratio measures how many times, on average, your business collects its accounts receivable during a specific period—typically a year.

It indicates how efficiently your company is managing credit, its debtors, and collecting payments. 

Formula

AR turnover = Net credit sales / Average accounts receivable 

Why it matters 

A higher AR turnover ratio means you’re collecting receivables more frequently, which is great for maintaining a healthy cash flow.

A lower ratio may suggest issues like slow-paying customers, overly lenient credit policies, or inefficiencies in your credit control process. 

How to optimise it 

Improve your AR turnover with these helpful tips: 

• Tighten your credit approval process to reduce late payments. 

• Send invoices promptly and accurately. 

• Follow up consistently with overdue customers. 

• Offer incentives for early payment or implement late fees when necessary. 

6. Percentage of current AR 

Measuring the percentage of current accounts receivable shows the portion of your outstanding receivables that are still within the agreed payment terms, meaning they’re not yet overdue.

This metric gives you a real-time view of how up to date your customers are with their payments. 

Why it matters

Tracking this percentage helps you quickly assess the overall health of your AR.

A higher percentage indicates that most customers are paying on time, which supports steady cash flow and reduces the need for credit control.

It’s a valuable snapshot of payment behaviour and financial efficiency. 

Aim for 80–90% of your accounts receivable to be current.

However, this benchmark can vary based on your industry, customer base, and standard payment terms. 

7. Dispute rate 

The dispute rate measures the percentage of invoices that customers contest, highlighting the frequency of billing disagreements or issues.

It’s a key performance indicator that reveals underlying problems with invoicing or contract terms. 

Why it matters 

A high dispute rate can delay payments, increase administrative workload, and strain customer relationships.

It often points to problems such as inaccurate invoices, unclear terms, or communication gaps. 

How to reduce it

If you notice this number rising, it’s time to act: 

• Use clear and consistent contracts. 

• Ensure invoices are detailed and accurate. 

• Communicate proactively with customers to resolve questions before they become disputes. 

• Provide easy-to-understand payment terms and conditions. 

8. Cost of credit control

Cost of credit control measures how much your business spends to recover outstanding accounts receivable.

This includes staff time, software, debt collection agencies, and other resources used in the credit control process.  

Why it matters 

Tracking the cost of credit control helps your team understand the efficiency of your AR operations.

Even if you’re collecting payments successfully, high costs can significantly reduce your overall profitability.

Monitoring KPI ensures you’re not overspending to bring cash in the door.  

How to reduce it

If this number starts to climb, consider the following strategies: 

• Automate payment reminders and follow-ups. 

• Use efficient invoicing tools that reduce manual work. 

• Focus your efforts on high-value accounts to maximise returns.  

• Streamline internal processes to reduce time and labour costs. 

9. Write-off ratio 

The write-off ratio measures the percentage of total accounts receivable that have been written off as uncollected.

It shows how much revenue is lost due to non-payment. 

Why it matters 

This metric directly impacts your bottom line and serves as a clear indicator of how effectively you’re managing credit risk.

A high write-off ratio may point to issues with customer vetting, overly lenient credit policies, or delayed collection efforts.  

How to control it

To keep this ratio under control, your team should: 

• Regularly review and adjust customer credit limits. 

• Monitor overdue accounts closely and follow up promptly. 

• Strengthen your credit approval process to minimise future risk. 

10. Customer payment trends 

Customer payment trends track how your customers pay over time, revealing patterns in payment behaviour across your entire customer base. 

Why it matters 

Monitoring these trends helps you identify shifts in behaviour, like consistently late payments, which could signal risk.

Spotting these patterns early allows you to adjust payment terms, plan cash flow more effectively, and proactively manage at-risk accounts. 

Use it to

• Categorise customers based on payment reliability. 

• Offer tailored payment terms or incentives. 

Intervene early before accounts become overdue or require write-offs. 

How to measure and track AR metrics

Wondering how to measure accounts receivable performance without getting overwhelmed?

The good news is you don’t have to do it manually.

That’s where AR KPI dashboards come in. 

• AR metrics dashboards give you a clear, visual overview of your numbers, offering real-time insights at a glance. 

• Use software that integrates with your invoicing and accounting systems to ensure seamless, automated tracking. 

• Set measurable targets that align with your business goals—for example, aim to reduce your DSO by 10% over the next quarter. 

Improving accounts receivable performance

Once you’re tracking the right metrics, the next step is optimising them.

Here are a few effective ways to boost your accounts receivable performance: 

• Reduce DSO: send follow-ups earlier, streamline internal approval processes, and make sure your payment terms are clear from the start. 

• Automate your AR process: use software to automate tasks like invoicing, payment reminders, and reconciliation to save time and reduce errors. 

• Enhance customer communication: a simple reminder or a friendly thank-you email can go a long way in encouraging faster payments. 

Benchmarks for AR metrics

Knowing how you stack up against others in your industry gives you valuable context.

Comparing your metrics to accounts receivable benchmarks helps you identify where you’re excelling, and where there’s room to improve. 

• Industry-specific benchmarks: each industry has its own norms. For instance, manufacturing companies typically have longer DSOs than SaaS businesses. 

• Competitor comparisons: benchmarking against similar-sized companies can help you assess your AR efficiency and identify gaps in performance. 

• Continuous improvement: don’t just aim to hit a target once, monitor your metrics over time to spot trends and drive consistent improvements. 

Common accounts receivable challenges

Even when you’re tracking the right metrics, there are still plenty of challenges in the accounts receivable process that can impact your cash flow and efficiency.

Here are some common issues your business may face: 

• Payment delays: some customers consistently pay late. Consider offering early payment discounts or enforcing stricter payment terms. 

• High dispute rates: frequent disputes can signal issues like inaccurate invoicing or unclear contract terms. 

• Cash flow gaps: slow receivables can create short-term cash flow problems. A consistent and proactive AR process helps keep things on track. 

Overcoming these challenges involves identifying weak points using performance data, automating your AR workflows, and maintaining clear, open communication with customers. 

Effortless AR KPI tracking for maximum cash flow

Technology can really make a difference when tracking your KPIs.  

AR software provides an all-in-one solution that includes dashboards, automated workflows, and reporting features that give your team a clear view of cash flow and payment activity.  

From automating data collation, to delivering real AI-based insights, choosing the right software will set you on a solid path to successful AR management. 

Streamline accounts receivable processes, improve efficiency, and support better financial decision-making, all with a few clicks of a button, instead of hours spent calculating formulas manually. 

Final thoughts

Tracking accounts receivable metrics successfully helps you improve cash flow, reduce risk, and operate with greater confidence.

However, managing all these AR performance metrics manually can quickly become overwhelming.

Consider choosing a system that’s designed to deliver real-time, actionable insights and understands how to make the best of AR processes to really see the benefits without the time sink. 

Ready to take control of your cash flow?

Discover how Sage AR software can help you start tracking smarter. 

A P60 is an essential part of managing tax and payroll for any employer. It’s also a vital record for your employees. It provides them with important information about their tax and other salary deductions, and marks the end of each financial year. But what is a P60 and what do employers need to know about them? Let’s take a look at this key piece of documentation.  

What is a P60? 

A P60 shows an employee the tax they’ve paid over the last financial year. It proves exactly how much income tax they’ve paid, as well as National Insurance contributions (NIC) and other information like student loans or maternity pay.  

This makes the P60 an essential record, showing vital financial information that can be needed for all sorts of purposes, such as applying for a loan. 

Employers must provide P60s to everyone employed by them each 5th April, even if that means they’ve only been employed for a few weeks or even days. Following the end of the financial year, the P60 must be issued by 31st May at the latest. 

A P60 is only issued to those employed by a company or organisation, meaning self-employed people don’t deal with P60s. 

What are the uses of a P60?

A P60 provides employees with an overview of their salary and annual tax contributions, important for a host of different uses. If an employee thinks they might have paid too much tax in the previous financial year, they can use their P60 to check. Their P60 provides the evidence for HMRC should they need to claim back overpaid tax. 

A P60 also provides proof of income for employees looking to apply for a mortgage or a loan, making it an important document to keep safe. It’s advised to keep hold of P60s for at least 6 years in case needed by HMRC as part of an investigation. 

P60 responsibilities for employers

It’s up to you to provide all of your employees with a P60 at the end of each tax year. This includes anyone employed by your business when 5th April rolls around, even if they’ve only just joined the organisation. The deadline for providing P60s is the following 31st May, giving you just under 60 days from the end of the financial year to issue them. 

You also need to provide digital copies of each P60 to HMRC. You can give your employees either digital or physical copies of their P60s, but this will usually depend on whether you’re using payroll software or not.

It’s also an employer’s responsibility to correct any errors and provide replacement copies if something isn’t accurate in a P60, both to the employee and to HMRC. 

Including accurate gross pay and tax-deducted figures

The core information included in a P60 is the total gross pay of an employee alongside the amount of tax deducted. This is shown as the total pay and tax for the year, as well as total pay and tax since being employed. 

Ensuring correct PAYE tax codes are displayed

A P60 shows an employee’s tax code, a vital piece of information that tells you how much income tax to deduct from their salary. If there is an error with the tax code, this could mean the amount of tax shown isn’t correct. 

Recording National Insurance contributions and numbers

National Insurance contributions are displayed in a P60, broken down by each level of earnings. This shows the earnings thresholds and how much the employee has paid on their income.   

Providing P60s for employees who left during the tax year

An employee only receives a P60 from you if they’re employed by your business on 5th April – the last day of the tax year. Otherwise, they receive a P45 at the end of their employment, showing how much tax they’ve paid so far during the financial year. 

Using HMRC-approved P60 formats or recognised payroll software

Any good payroll software should be able to handle the production of P60s each year, using the employee data in your systems to make and distribute them digitally. Alternatively, HMRC provides free basic PAYE tools for smaller businesses, able to produce P60s and P45s. 

Including statutory sick pay and maternity pay details

A P60 shows other information besides income tax and NIC, such as earnings from statutory maternity pay or sick pay. This allows the employee to see these figures separately, though they are included as part of the ‘in this employment’ overall figure featured elsewhere in the form.  

Maintaining accurate records for HMRC compliance

As well as providing information for employees, copies of every P60 must be sent to HMRC at the end of the tax year. This can be done automatically with payroll software, providing all relevant RTI when it’s needed.  

Correcting any P60 errors and reissuing if necessary

It’s the employer’s responsibility to correct any errors within a P60 form and to replace it as necessary. Naturally, this will be easier if you issue digital copies rather than paper copies. 

Distributing P60s securely via post or electronic delivery

How you issue your P60s to employees will depend on how you do payroll and other HR admin. Whether you send them digitally via your HR software or manually send paper copies, you’ll need to make sure they’re delivered securely and safely to protect personal information. 

Keeping copies available for potential HMRC inspections

Employers need to keep copies of P60s for 3 years after they’re issued. This is in case HMRC needs to see these records as part of an inspection.

Common mistakes employers make with P60s

The P60 is an important record where accuracy is absolutely paramount. There are many problems that can arise from having incorrect information in a P60, from employees paying the wrong amount of tax to penalties from HMRC, making it an important part of HR compliance.  

Here are a few of the most common mistakes employers make when it comes to P60s: 

Incorrect figures – Including the wrong income amount or the wrong calculation of income tax or NIC can mean the summary is distorted, making the form essentially useless. Integrated payroll software will help keep all the figures accurate so the P60 remains a reliable document. 

Inaccurate personal information – A simple misspelling or misplaced number can throw a spanner into the works. Make sure names, addresses and National Insurance numbers are correctly entered into your systems to avoid problems down the line.

Missed deadlines – P60s need to be issued to employees no later than the 31st May. If this deadline is missed repeatedly, HMRC may start issuing your business with fines. Make sure your end-of-year procedures are set up to meet the required deadlines. 

How can Employment Hero help?

Take the stress out of issuing P60s with Employment Hero’s Payroll Compliance Software. Our automated payroll compliance services give you everything you need to complete these vital tasks with accuracy and efficiency. 

P60s can be automatically created and issued on time to your employees, while all required RTI reports go directly to HMRC when they’re needed. Get in touch today and find out how we can help your business. 

The way we train people is overdue for a change. Forget the endless slide decks and the e-learning modules everyone clicks through just to tick a box. Many SMEs find that traditional coaching often doesn’t stick; it’s costly, uninspiring and doesn’t prepare your team for the challenges they face every day. 

So it’s time to move away from outdated methods and start building learning experiences that actually make a difference. 

Introducing: Virtual reality in corporate training. 

While this might sound futuristic, it’s not about gaming or sci-fi, it’s about creating immersive, hands-on learning that helps to drive real outcomes. With virtual reality (VR), employees don’t just sit back and watch; they step in and do. It transforms training from a passive exercise into an engaging, practical experience that boosts confidence and retention.

What is virtual reality in corporate training?

Virtual reality in corporate training uses immersive technology to put employees in realistic, simulated environments. Think of it as a flight simulator for your business. It allows your team to practice high-stakes skills, navigate difficult conversations and master complex procedures in a completely safe, controlled setting.

You’re not just watching a video; you are physically and mentally present in the learning scenario. This hands-on approach creates powerful, lasting memories and gives your people the confidence to perform when it matters most. It’s a core component of any modern approach to learning and development.

How VR is revolutionising corporate training

The shift to VR is more than just a technological upgrade for SMEs; it’s a fundamental change in the philosophy of how people learn best. It’s an active, engaging process that builds real-world skills in a way that traditional methods can’t match.

Mastering soft skills with VR

As many small business owners know, you can’t learn leadership from a textbook. The skills that truly matter such as public speaking, conflict resolution, giving difficult feedback and making tough decisions under pressure can only be developed through practice. VR provides the ultimate practice ground.

It allows your employees to face realistic scenarios, like calming an angry customer or delivering a tough performance review, without any real-world consequences. They can rehearse these crucial moments, experiment with different approaches and build the muscle memory and confidence needed to lead effectively. This is a game-changer for improving your business’ soft skills training.

Building true empathy with diversity and inclusion VR training

For too long, diversity and inclusion (D&I) training has been a tick-box exercise that fails to create genuine behavioural change. Reading about unconscious bias is one thing; experiencing it is another entirely.

VR is a powerful tool that SMEs can harness for building true empathy because it allows users to literally walk in someone else’s shoes. Immersive experiences can place a manager in a situation where they are the subject of microaggressions or exclusion. This first-person perspective can build genuine understanding and emotional connection in a way that traditional D&I training simply can’t, driving real change in workplace culture.

Why VR is the future of soft skills training

VR is uniquely powerful for developing soft skills for one critical reason: it provides a psychologically safe space to fail. Difficult conversations are, by their nature, uncomfortable. High-pressure leadership moments are stressful. In the real world, the stakes are high and people are often afraid to make a mistake.

In a VR simulation, employees can fail, reflect and try again without fear of damaging a real relationship or project. They can practice a tough conversation ten times, refining their approach each time, until it becomes second nature. This repetitive, hands-on practice is what turns theoretical knowledge into an ingrained skill.

How effective is virtual reality for training people?

This isn’t just hype; it’s backed by hard data. A landmark PwC study found that 40% of the v-learners saw an improvement in confidence compared to classroom learners and a 35% improvement over e-learners to act on what they learned after training in VR.

The study also found that VR learners were up to four times more focused than their e-learning peers and completed training up to four times faster than in the classroom. 

It’s clear that virtual reality in corporate training isn’t just the current fad in technology, it’s a proven method for delivering more effective training with better results.

VR training vs. the old way: classroom and e-learning

Not all training is created equal. Traditional classroom sessions, e-learning platforms and employee learning programmes have helped businesses educate their teams for years,  but both come with limitations. Today’s workforce needs something more engaging, more consistent and more impactful.

That’s where VR training comes in. It bridges the gap between the human connection of face-to-face learning and the scalability of digital training. 

The table below breaks down how VR stacks up against traditional and online learning — and why it’s fast becoming the go-to choice for modern learning and development.

Training method	Challenges	Experience	Scalability	Engagement and retention
Traditional classroom	Expensive to run and maintain; quality varies by instructor.	In-person and hands-on, but inconsistent.	Limited, hard to scale across teams or locations.	Moderate, depends heavily on the trainer and environment.
E-learning	Scalable but often uninspired.	Passive,  mostly watching and clicking through content.	High,  easily distributed across teams.	Low,  learners often disengage. and forget material quickly
Virtual reality corporate training	Requires upfront setup but delivers long-term value.	Immersive, interactive and realistic “learning by doing”.	Highly scalable and consistent across learners.	High, creates memorable confidence-building experiences

Demystifying VR training cost and scalability

Let’s address the elephant in the room: cost. And this is a factor that most SMEs will need to take into consideration. As with everything, there is an upfront investment in headsets and content development. But the real story here is about the cost-effectiveness you can achieve at scale. This is a smart, long-term investment in your people that pays for itself over time.

Achieving cost-effectiveness at scale

Consider the economics. Once you’ve developed a VR training module, you can deploy it to hundreds or thousands of employees across the globe for a fraction of the cost of traditional methods. You eliminate the recurring expenses of venue hire, instructor fees, travel and accommodation.

PwC’s study found that VR training achieved cost parity with classroom learning at 375 learners. When training thousands of employees, VR becomes significantly more cost-effective, delivering a higher ROI and a better-skilled workforce.

The power of emotional connection and focus in VR

A distracted learner is a non-learner. In an office or home environment, an employee taking an e-learning course is bombarded with distractions like, emails, phone notifications and colleagues stopping by. None of this is conducive to effective learning. 

But, with virtual reality in corporate training, there are no distractions. The user is completely immersed in the learning environment. This intense focus creates a deeper emotional connection to the material. Learners feel like they are truly experiencing the situation, not just observing it.

Real-world use cases of VR training in organisations today

This is not a futuristic fantasy; it’s happening right now. Forward-thinking organisations across industries are using virtual reality in corporate training to gain a competitive edge, develop stronger teams and deliver development programmes that truly stick. From customer service to healthcare and workplace safety, VR is transforming how people learn, making teaching more engaging, effective and scalable than ever before.

Use case: transforming customer service training

Imagine stepping into the shoes of a frontline retail or hospitality employee,  not through a roleplay exercise, but through an immersive virtual experience. In VR, staff can practise handling tense customer interactions without the risk of real-world fallout.

A global hotel chain, for example, uses VR to simulate challenging guest scenarios: a double-booked room, an overcharged bill or a guest upset about service quality. Trainees experience these interactions in lifelike detail, learning to read body language, manage emotions and apply de-escalation techniques with confidence.

Because VR allows them to make mistakes safely and repeat the scenario as many times as needed, employees can refine their tone, empathy and problem-solving skills until they feel completely prepared to handle any customer calmly and professionally. The result? Happier guests, reduced staff anxiety and a measurable lift in customer satisfaction scores.

Use case: revolutionising healthcare and safety training

Nowhere is precision and preparedness more critical than in healthcare and workplace safety and VR is saving lives by helping professionals master high-stakes skills before they ever face real danger.

Hospitals are using VR to let surgeons practise complex procedures in a zero-risk environment. They can perform delicate operations virtually, building muscle memory and decision-making confidence that translates directly to better patient outcomes. For nurses and emergency responders, VR scenarios simulate high-pressure situations like cardiac arrests or trauma care, training them to stay calm, act fast and coordinate effectively under pressure.

The same principle applies to safety-critical industries like construction, mining and manufacturing. Workers can learn how to operate heavy machinery, navigate hazardous environments and respond to emergencies,  all in a safe, controlled virtual space. By experiencing the potential consequences of unsafe behaviour without real-world risk, employees develop a stronger safety mindset and are less likely to make costly or dangerous mistakes on the job.

These examples aren’t science fiction, they’re today’s reality. Organisations that embrace VR training aren’t just improving skills; they’re future-proofing their workforce and creating safer, more capable and more confident teams.

How to get started with VR training in your business

You don’t need a massive budget or a team of developers to begin. The key is to start small, prove the value and build from there. We’ve broken down the basics of getting started with virtual reality in corporate training.

1. Identify a high-impact training opportunity

Look for one clear challenge where better training could make a big difference.

• Is your customer service team facing burnout and high turnover?
• Are new managers struggling to give effective feedback?
• Do employees need more hands-on experience to handle complex tasks safely?

Start with a single, measurable problem, one that matters to your people and your business.

2. Partner with a VR experts

You don’t need to build everything yourself. Partner with a specialised virtual reality in corporate training provider who can help design a pilot program that fits your goals, budget and team needs.

3. Define success 

Before you launch, decide how you’ll measure success. Are you aiming to:

• Boost employee confidence?
• Reduce safety incidents?
• Improve sales performance or customer satisfaction?

Clear metrics help you track progress and show the return on investment.

4. Trial, measure and scale

Run your VR training with a small group first. Gather feedback, track results and use that data to build a strong business case for a wider rollout.

5. Use the right tools to plan

Set your VR training up for success by using tools that give you a clear picture of your team’s needs. Start by identifying the skills gaps and learning priorities that will make the biggest impact on performance. 

The key considerations before you invest

Before you jump in, ask yourself these critical questions to position your VR initiative for success, not for failure.

• What specific problem are we trying to solve? Don’t adopt VR for its own sake. Tie it to a clear business objective.
• How will we measure success? Define your KPIs from the start. What does a successful outcome look like?
• Do we have leadership buy-in? You need a champion in the leadership team who understands and supports the strategic value of this investment.
• Who is our target audience? Consider the technical comfort level of your employees and plan for user-friendly implementation and support.
• How will this integrate with our existing learning ecosystem? Think about how VR training will complement your current employee development and fit within your overall strategy. 

 The future of learning is already here

Virtual reality in corporate training is changing how businesses approach learning and development.  By creating immersive, hands-on learning experiences, VR empowers employees to practise, fail, reflect and succeed in ways traditional methods can’t match. It builds confidence, strengthens skills and creates lasting behavioural change that drives real business results.

For forward-thinking organisations, this isn’t a “nice to have”,  it’s the next step in creating a learning culture that’s scalable, engaging and human at its core. 

At Employment Hero, we believe in helping businesses unlock the full potential of their people. By combining innovative technology with human insight, you can transform how your team learns. Our Employment OS (Operating System) empowers HR professionals and business leaders to spend less time on admin tasks and more time on the fun stuff (like learning and development). 

Find and hire top talent, onboard, manage complex payroll, support compliance and more. One system, everything employment.

Modern performance management is evolving faster than ever. Before you mourn the loss of traditional performance reviews, think about how the once a year reviews, filled with formalities and box-ticking activities actually impacted your team. Not only do they no longer reflect how modern businesses work and how employees grow, but they also fail to drive real growth and progression. 

It’s time for a revolution in how we measure and inspire performance. The best performance management software moves you from painful annual reviews to a culture of continuous feedback, goal alignment and genuine development. 

We’ll cut through the noise to take a comprehensive look at which is the best performance management software. 

Why employee performance software is important

Employee reviews and development are no longer about a yearly check-in. With hybrid, remote and flexible working, businesses now need to find ways to keep their team connected, engaged and aligned with business goals… regardless of where they’re working from. 

The good news is that there are platforms that can help businesses do this. The best performance management software provides a central hub to track objectives, facilitate real-time feedback and understand employee development needs.

It gives you the insights to not just manage, but to coach and inspire your people. This is fundamental to boosting productivity, improving retention and building a culture where everyone can thrive. It starts with a clear understanding of how to measure employee performance in a modern way.

What is performance management software?

The best performance management software is a tool that helps you create a continuous cycle of development. It goes far beyond simple review forms. 

Modern platforms are designed to manage goals, facilitate ongoing feedback from peers and managers, handle recognition and provide powerful analytics. It digitises and automates the entire process, from setting objectives to tracking progress and rewarding achievements, freeing up managers to focus on high-impact coaching conversations.

The best performance management software

1. Employment Hero

Employment Hero’s Employment OS (operating system) takes all of the traditional isolated elements of employment and puts them into one place. This means you can not only conduct employee reviews, but also find and hire top talent, onboard, manage complex payroll, support compliance and more. 

It is designed to be an all-in-one solution for managing the entire employee lifecycle, making it a powerhouse for businesses that want to eliminate disconnected systems.

What sets Employment Hero apart

The key differentiator for Employment Hero is its unified approach. Performance management isn’t a standalone module; it’s woven into the fabric of your daily HR operations. Features like real-time feedback, goal tracking (OKRs) and recognition are linked directly to employee engagement analytics. This gives you a holistic view of your workforce, connecting performance data with sentiment and wellbeing insights. Its powerful automation and seamless integrations streamline everything from reviews to rolling out a performance improvement plan.

2. 15Five

15Five is built around the concept of frequent, lightweight check-ins. Its name comes from the idea that employees should spend 15 minutes a week writing a report that takes their manager five minutes to read. The platform is heavily focused on fostering positive manager-employee relationships through continuous communication.

What sets 15Five apart

15Five’s strength lies in its emphasis on positive psychology and manager training. The software includes features like a “High Five” peer recognition tool and strengths-based assessments. It’s not just a system for tracking performance; it’s a platform designed to facilitate better conversations and build a more engaged, positive workplace culture.

3. Lattice

Lattice is a comprehensive people platform that combines performance management with employee engagement and development tools. It is known for its clean user interface and its ability to connect performance data directly to compensation decisions.

What sets Lattice apart

Lattice excels at linking performance, engagement and growth. It allows you to run review cycles, engagement surveys and set up career development tracks all within one system. Its standout feature is the ability to integrate performance review data with compensation cycles, creating a transparent and data-driven process for pay decisions.

Features of top performance management software

When evaluating platforms, look for these game-changing features.

Continuous feedback mechanism

This allows employees and managers to give and receive feedback in the moment, rather than waiting months for a formal review. It makes recognition timely and constructive criticism actionable.

360-degree feedback

This feature gathers anonymous feedback from an employee’s peers, direct reports and managers. It provides a well-rounded view of an individual’s strengths and development areas, which is a core part of any modern performance review.

People analytics

Powerful reporting dashboards give you insight into performance trends, goal attainment and engagement levels across the business. This data is critical for making informed talent decisions.

Employee reward and recognition

Integrated tools for peer-to-peer recognition, like shouting out great work, help build a positive culture and make employees feel valued.

Setting SMART goals

The best software makes it easy to set, track and align individual, team and company goals. This ensures everyone is pulling in the same direction. Look for support for frameworks like Objectives and Key Results (OKRs).

Learning management system

Some platforms integrate learning and development modules, allowing you to assign training based on feedback and identified skill gaps.

Customisation, security and integration

A top platform should be customisable to your review process, offer robust data security and integrate with your other HR systems. You can find many of these features in our complete performance review bundle.

What is continuous performance management software?

Continuous performance management (CPM) is a modern approach that replaces the annual review with ongoing dialogue. CPM software facilitates this by enabling real-time feedback, regular check-ins and agile goal setting. It’s a dynamic process designed for today’s fast-paced work environment, especially for hybrid teams who need constant connection and alignment.

Core features of CPM software

Core features include one-on-one meeting agendas, goal  tracking and instant feedback channels. These tools are built for agility, helping teams adapt to changing priorities and providing managers with a constant pulse on team performance and morale. Using a mid-year performance check-in template is a great way to start adopting this mindset, even before you have the software.

Elevate your performance management with Employment Hero

The way we measure, manage and inspire performance has changed and so have the tools that make it possible. Annual reviews and outdated systems no longer cut it in a world where teams need to stay connected, motivated and aligned in real time. To truly unlock your people’s potential, you need the best performance management software on your side. Which is where Employment Hero comes in. 

But our Employment OS is more than just the best performance management software, it’s an all-in-one platform that supports the entire employee lifecycle. Our platform empowers your business to grow smarter. From goal tracking and real-time feedback to hiring top talent, onboarding new employees, managing complex payroll, supporting compliance and more. 

One system, everything employment. 

Making Tax Digital for Income Tax is the future of accounting for millions of sole traders and private landlords.

It begins in April 2026 and rolls out to more taxpayers as of April 2027 and April 2028.

We’ve looked in detail about MTD here on Sage Advice, but this time we’ve taken an oblique approach: We’ve found things that might surprise you about this latest incarnation of HMRC’s tax digitalisation.

Here’s what we discuss:

A quick introduction to MTD for Income Tax

MTD requires businesses that fall within its scope to keep digital records and submit updates using MTD-ready accounting software.

You’ll need to:

• Keep digital records of your income and expenses using MTD-compatible software (usually cloud-based).
• Submit quarterly updates to HMRC using the software, so they can estimate your tax liability throughout the year. (Although you can submit them more frequently.)
• File a digital tax return by 31 January after the tax year ends using the software, including all income and expenses – and any other relevant sources, like savings interest. You can also make any necessary adjustments at this time.

Here’s a short video with some of the latest details about MTD, featuring HMRC’s Director of MTD, Craig Ogilvie, in Sage’s exclusive interview at Accountex North:

1. You can’t sign-up for MTD if you’re new to operating a business

If you’re just starting out as a sole trader or landlord, you can’t sign-up to MTD immediately. This is true even if you’re sure your gross income will be above the threshold. In other words, you won’t face any penalties, so don’t worry.

Instead, you must sign-up to and use Self Assessment in the standard way – applying for a unique tax payer (UTR) reference, then submitting a Self Assessment tax return by 31 January following the end of the tax year the previous April (or a paper-based return by the end of October).

However, if it’s clear following your first Self Assessment tax return that your income exceeds the MTD qualifying income threshold, then HMRC will write to you telling you to start using MTD from the next tax year onwards.

This effectively means that those new to being a sole trader or landlord will always complete at least two years of Self Assessment before moving to MTD for Income Tax.

(There is a caveat: It is possible to sign-up to MTD for Income Tax voluntarily after you sign-up to Self Assessment. In that case, you’ll be scheduled to start using MTD for Income Tax as of the following tax year, meaning you’ll still have to complete one year of Self Assessment.)

Even though you must use Self Assessment before switching to MTD, there remains an excellent opportunity to embrace modern accounting technology and digitalise your accounting. MTD-ready accounting software like Sage Accounting is also fully compatible with Self Assessment.

If you develop the right processes for income and expenses using accounting software, then switching to MTD when required will be almost seamless.

2. Your accountant can do nearly all of MTD for you

Although the goal of Making Tax Digital is to introduce digitalisation to your accounting, you can still ask your bookkeeper or accountant to do most of the work.

You just need to ensure they have all the accounting data they need ahead of the quarterly deadlines, so they can digitalise it in time. In other words, while you may currently contact them only once a year around January, with MTD you’ll now need to make this same contact every three months, and also in January for that digital tax return.

The contact every three months could be simply supplying the bank statements of your business accounts, although you should speak to your bookkeeper or accountant to see how they want to handle it.

The bookkeeper or accountant can create and submit your quarterly updates for you. They can create your digital tax return, too, although you’ll still need to review and digitally sign it. The accountant or bookkeeper can do this via email, just as they do already with Self Assessment.

They can even register you for MTD for Income Tax.

None of this is to say the above is a good way of working. You’ll be blind to your business finances, and cash flow, for most of the time. And leaving digitalisation of the data to the last-minute risks penalties from HMRC. It’s a perfect way to create situations where you accidentally lose that vital data, too.

Why not take the opportunity to modernise your accounting and processes, so you get the benefit of cloud accounting software, like automated reminders, AI assistants, and more? You can still work with your accountant or bookkeeper by connecting your accounting system to theirs.

But it is entirely possible for them to nearly entirely take care of MTD on your behalf. Speak to your bookkeeper or accountant to learn how.

3. It’s potentially illegal to copy and paste accounting data

This really might seem a strange one but it’s true: You’re not allowed to manually cut/copy the key income and expenditure accounting data for MTD. No Ctrl+C. No Ctrl+V.

For example, if you keep track of this data in a spreadsheet then it’s illegal to copy and paste it into your accounting software. If HMRC catches you doing so, you could be penalised.

Similarly, you can’t write it down and then key it in manually.

This is because of the digital record and digital linking rules, that try to ensure the accounting data is not only digital but that it’s transferred in an automated way that’s fundamental to digital accounting.

For example, you could configure your spreadsheet to somehow transfer the data automatically into your accounting software. However, this is technically difficult to achieve.

You can copy and paste other accounting data. Just not the records directly relating to your income and expenditure for your business(es) that are required for the quarterly updates or the digital tax return.

This is why it simply makes sense to keep everything within your accounting software. Ensure you get data into it as soon as possible, such that contained in receipts or bills, or generate the data there by doing things like issuing invoices using it.

This way the data is always where you need it. You haven’t got to cut/copy and paste anything, so you’re automatically in compliance with the law.

4. MTD for Income Tax is not linked to MTD for VAT

If you’re already signed up to MTD for VAT, then you’ve gained some useful experience in Making Tax Digital’s requirements. Many are similar in MTD for Income Tax.

However, MTD for VAT is unconnected to MTD for Income Tax. They’re two separate and distinct systems run independently by HMRC.

For example, you’ll still need to sign-up to MTD for Income Tax separately, and activate it in your MTD-ready software – even if you’ve already signed-up to MTD for VAT and switched on that functionality in your accounting app.

You don’t need to use the same software for both MTD for VAT and MTD for Income Tax – although for many sole traders and landlords, this will make sense.

What’s more, although the VAT and Income Tax penalty systems work in an identical way, they’re entirely separate.

If you find yourself with penalty points for missed VAT return submission, that doesn’t affect your tally of points for MTD for Income Tax. And vice versa.

There is one exception to all of the above, which is that those who were digitally excluded from MTD for VAT are also digitally excluded from MTD for Income Tax – provided your situation hasn’t changed. Speak to HMRC to confirm.

5. MTD doesn’t replace Self Assessment for everybody

MTD for Income Tax only potentially applies to sole traders and landlords who currently use Self Assessment.

Nobody else.

However, there are many other reasons outside of running a business that people sign-up to Self Assessment. None of these people need worry about MTD for Income Tax right now.

For example, some people with pension income above the personal allowance need to use Self Assessment to report their income. These people do not need to use MTD for Income Tax.

Similarly, the following types of people who have to use Self Assessment do not need to switch to MTD for Income Tax:

• Those who pay the High Income Child Benefit Charge (if you don’t pay it through payroll).
• You’re a partner in a business unincorporated partnership (although the government has said it’s likely partners will be included at a future date).
• You received over £10,000 from savings, investments, or share dividends.

6. Any sole trader or landlord can sign-up to MTD – even if your income is below the threshold

MTD for Income Tax starts in April 2026 for those whose qualifying income is over £50,000. This threshold then falls to £30,000 as of April 2027, and then £20,000 as of April 2028.

However, if you earn less than this, you can still voluntarily sign-up for MTD for Income Tax provided you’re already a sole trader or landlord using Self Assessment (and provided you meet the other various criteria).

Signing-up voluntarily makes a lot of sense because you’ll gain the benefits of MTD for Income Tax, such as HMRC estimating your tax and National Insurance bill with every quarterly update. This is great for understanding your cash flow and it avoids the guessing game where you set aside around a third of your income for the tax bill.

Note that, if you voluntarily sign-up to MTD, you are committing to stay within MTD for the full tax year. In other words, you can’t join for a few months to see if you like it, for example, before reverting to Self Assessment.

7. You haven’t got to use the same software for everything in MTD for Income Tax

Although it makes sense to use the same cloud accounting software for all aspects of your accounting, this isn’t strictly required under the MTD rules.

You could use a particular app to track your expenses, for example, and another app for your income.

A good example of this is using data entry automation software like AutoEntry to digitise paper receipts and bills, which will magically and compliantly transfer the extracted data to your accounting software.

Similarly, retailers will use electronic point of sale (EPOS) systems to take payments. Some people who travel for work can use car mileage tracking apps.

However, there must be a way to automatically move the relevant income and expenses accounting data records into your main accounting software through which you make the quarterly updates and submit the digital tax return. As mentioned, you can’t manually copy and paste data or write it down and key it in manually because of the digital linking requirements.

In most cases, this is taken care of by the software automatically – but it’s a good idea to check before buying or subscribing to software.

Final thoughts

MTD for Income Tax is transformational for businesses. It’s the chance of a lifetime to update processes and introduce digital accounting, including automation and artificial intelligence.

There’s little to be gained by sitting on the fence. MTD has the very best intentions, for both your business and your admin.

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Watch highlights from Sage Future for Partners 2025 and see how AI is helping businesses move from insight to action. 

AI has reached a turning point. It’s no longer about efficiency but about clarity, confidence, and maximising your competitive edge.

The question shouldn’t be if you’re using AI, but how are you using it to empower your people, sharpen decisions, and turn insight into action.

The pace of change is quick, but the opportunity is practical: to turn insight into action faster, free up the hours that get lost in spreadsheets and reconciliations to focus teams on what truly drives growth. 

For finance leaders, that means shifting from managing transactions to shaping strategy – from chasing data to trusting it. 

Sage Future for Partners 2025 in Barcelona explored how agentic AI – technology that can reason, act, and learn alongside you – is redefining what a high-performance finance function looks like. 

Don’t replace judgment or experience – augment it. That combination of human and machine intelligence is quickly becoming the difference between keeping up and leading. 

Here’s what we cover:

How do you turn your data into decisions?

The new Sage Finance Intelligence Agent marks a defining shift: autonomous insight, delivered in plain language, where finance teams already work.  

No reports. No manual analysis. It analyses data across systems, flags risks and opportunities in real time, and helps finance move from reacting to anticipating – so the function becomes a true strategic driver. 

“Don’t make our AI cute – it has to be real, authentic, and right.”

— Steve Hare, Sage CEO 

What the results look like in practice

From the last 12 months, Sage Ai agents have: 

• Removed up to 90% of manual data entry 

• Automated 45m+ invoices  

• Reduced period close to 2–3 days 

• Scanned 3.2bn transactions; flagged and fixed 190m errors  

• 5× ROI on software investments for customers 

Help to build your connected enterprise

• Alongside Finance Intelligence, three launches will shape how businesses connect strategy, systems, and scale: 

• Next-generation Sage X3 built for mid-market organisations that need connected, scalable, and secure finance operations. 

• AI Developer Solutions empowering partners and developers to co-create tailored AI experiences for customers. 

• The new Sage Partner Portal, which is a single environment to streamline provisioning and support, connecting you to a richer ecosystem of AI-enabled expertise. 

At the centre is the Sage Network – a connected platform linking businesses, partners, and products in one intelligent flow.  

It helps teams collaborate more easily, automate what slows them down, and keep the right data moving securely across e-invoicing, payments, and compliance. 

Trust you can show with responsible AI

Trust is at the absolute core of AI adoption, and that’s why Sage has introduced the Sage Trust Label (starting with Intacct in the UK & US, expanding across EMEA).  

It explains how AI features work and how data is handled – giving boards, auditors, and clients the confidence that innovation is happening hand-in-hand with accountability. 

Practical takeaways for your business

1. Start with outcomes, not pilots. Pick one finance pain point (close, AP, anomaly detection) and measure cycle time saved, error rate reduced, or cash-flow impact. 

2. Put AI where decisions happen. Embed agents in the workflows your team uses daily; avoid “side-apps” that create extra clicks. 

3. Tighten data hygiene. AI agents amplify whatever they ingest – clean vendor data, chart of accounts, and approvals first. 

4. Write the guardrails. Define what the agent can action vs escalate; document audit trails and approvals. 

5. Explain the ‘why’. Use evidence like the Trust Label and a simple comms pack to bring your leadership and auditors with you. 

Questions to take back to your next team meeting

• As agentic AI continues to evolve, how can you harness both technology and human insight to shape the future of your business? 

• Where would a two-to-three-day close, fewer manual touches, and clearer risk signals change how you plan and invest next quarter? 

• How can you free finance from reporting the past, so it becomes the driver of your next strategic move? 

• What decisions could your team make if data spoke the same language across your systems and partners? 

• And, as trust becomes the currency of AI adoption, what steps can you take today to make transparency part of your finance culture? 

AI is not replacing human intelligence, it’s amplifying it. Those businesses that combine human judgment with the powers of agentic AI are already moving faster, making smarter decisions, and finding new ways to grow over their competition. The next advantage belongs to those who turn their potential into action. 

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