Skip to main content Haunted by MTD admin? How FreeAgent uses AI to lighten your workflow
This spooky season marks six months since MTD for Income Tax was rolled out for sole traders and landlords earning over £50,000 in qualifying income. While accounting firms are starting to settle into the new routine, there’s still a lot of questions haunting the industry when it comes to how practices can manage the new workflow.
At the same time, agentic AI has also emerged from the shadows - the curiosity-turned-colossus has found its way into every major industry including accounting. Between questionable headlines predicting the end of accountancy and tools promising to balance all your numbers, it can be hard to see how to actually put this technology to use (beyond giving your feline friends a desk job).
Useful AI is like good CGI - it does a lot behind the scenes, but you barely notice it. That’s the FreeAgent approach: make AI helpful and inconspicuous, so your firm can focus on delivering good service, growing your bottom line and keeping clients happy. Add some handy automation and a few healthy client habits, and your new MTD workflow starts looking a lot more manageable than you initially imagined.
Here’s how FreeAgent uses AI to put your MTD worries to rest.
Giving the receipt shoebox a proper burial ⚰️
Every accounting firm has that one client who stores receipts somewhere ‘safe’. Michaela Rees of Sterling Rees knows this too well - often finding herself having to persuade clients out of shoeboxes or van dashboards.
You don’t need us to tell you that’s not an ideal record-keeping strategy. Helping clients track transactions in a more orderly manner saves everyone a frantic search later, especially when MTD quarterly deadlines make accurate reporting a regular requirement.
That’s where FreeAgent’s Smart Capture feature can help you. Clients can upload receipts and bills through the desktop version of FreeAgent or its mobile apps for Android and iOS. Smart Capture extracts the details, such as the date and amount paid, and then uses AI to categorise the expense before matching the bill or receipt to the relevant bank transaction.
Soon, clients will also be able to send receipts and bills to FreeAgent by email, giving them another handy way to keep their records up to date. More efficiency, less shoebox hunts.
🕯️ FreeAgent tip: To get the most out of Smart Capture, encourage clients to capture receipts straight after a purchase while they’re still at hand. A small change in routine can prevent a forgotten expense from rearing its head before your next deadline.
Banishing the bookkeeping backlog 👻
A few unexplained bank transactions might seem harmless enough. But leave them to multiply, and your bookkeeping backlog can take on a life of its own.
FreeAgent’s AI-powered Guess feature helps you keep things under control by suggesting plausible explanations for imported bank transactions. Guess can now explain over 80% of transactions with over 90% accuracy. The feature uses information such as transaction descriptions and previous explanations to identify suitable accounting categories, so your team can review the suggestions and spend more time investigating anything that needs better judgement.
For recurring transactions that need a particular response, FreeAgent Practice Partners can also create custom bank rules. You set the instructions; FreeAgent applies them to matching transactions as they’re imported. This is straightforward automation, working alongside AI to save you explaining the same transactions over and over.
Keeping that automation working round the clock is also important. This is where FreeAgent’s Radar feature comes in. Radar alerts your practice when a client hasn’t connected their bank feed or when a client’s bank feed is about to expire, with the option to update these feeds through the Practice Dashboard. It also flags when a client’s HMRC connection for MTD for Income Tax is approaching expiry, helping your team spot kinks in the automation process before a quarterly deadline creeps up.
Finally, for landlords, our rental statement capture and categorisation feature can save a huge chunk of your time normally spent classifying unwieldy rental statements. Just upload the statement and FreeAgent’s AI, powered by a large language model, will extract the details, assign entries to the relevant accounting categories and reconcile net bank payments. This feature is available exclusively with FreeAgent for Landlords, our account type for unincorporated landlords.
🕯️ FreeAgent tip: Encourage clients to keep business spending separate from personal transactions. For landlord clients, make uploading letting agent statements a regular part of their routine, so supporting information arrives on time throughout the quarter.
Untangling the web of client sign-offs 🕸️
You’ve reviewed the data, resolved the queries and prepared the quarterly updates. Now you just need clients to approve them.
Unfortunately, ‘just’ can end up taking a lot of time.
When requests and replies are scattered across individual email threads, working out who needs a nudge at what point becomes a task in itself. FreeAgent’s bulk approval requests feature lets you send quarterly updates to clients for approval in batches of up to 100 submissions, cutting down on repetitive correspondence. You can then check approval statuses in your Practice Dashboard and focus your follow-ups on the clients who actually need a nudge.
There’s no AI involved in this one. Sometimes, a well-placed bit of automation is enough to stop your team from getting caught in a maze of e-cobwebs!
🕯️ FreeAgent tip: Agree on a reasonable response deadline with clients and explain how they can review their updates and raise questions. Setting a clear process from the outset stops approvals from becoming a last-minute problem.
Letting your humanness shine 🎃
The most helpful AI tools bring the best out of the humans using them. As we adapt our workflows to incorporate AI, it’s important to protect the elements AI definitely should not replace - the parts of your role that rely on your professional judgement and unique relationships with clients.
An AI-suggested accounting category can make your job easier, but it can’t tell you why a client made an unusual purchase. AI-captured receipts, while saving a ton of time, won’t reveal how a client’s business is doing. Those conversations need someone who understands the context around the numbers and can help the client decide what to do next - a good, human accounting partner.
The same human care is also needed when helping clients adapt to the new MTD workflow. You’ll know who needs a quick demonstration of receipt capture and who would benefit from a more detailed walkthrough. Making those personalisation decisions now is the key to building a successful long-term relationship with your client - MTD changes and AI breakthroughs notwithstanding.
That’s how AI can best support your firm: by giving your team more room for the care and judgement clients actually need.
Lay your MTD worries to rest 🪦
FreeAgent’s built-in AI features turn receipts, rental statements and bank transactions into organised records, while its handy automation features like bulk approvals and Radar keep your workflow running smoothly. Together, these elements make MTD for Income Tax easier to manage and give your team more time back for the work you actually enjoy doing.
For more help building out these routines, explore our MTD resources for practices and adapt our client email templates to explain next steps to clients.
If you’re a FreeAgent Partner, book a call via the Partner Zone of your Practice Dashboard and speak to an Account Manager about making these features part of your MTD workflow. Then sit back and save the scares for the cinema.
