5 ways to simplify accounting compliance

Accounting compliance has become increasingly tricky for practices in recent years. From changing regulations, software requirements, and evolving client needs, practices have new hoops they need to jump through each year just to remain compliant.

Accounting software for accountants and bookkeepers can help your practice simplify compliance work and time-consuming day-to-day tasks - so it’s easier to manage. With compliance less of a constant battle and more of a background task, you have more time to focus on clients and other areas of business.

In this guide, we show five ways your practice can improve compliance processes and systems with software, and get time back for the work that matters most to you.

Compliance challenges in accounting

What specifically makes compliance work so complex? Let’s take a closer look.

1. Evolving regulatory environment

The changing regulatory environment can be the toughest challenge for many accountants and bookkeepers. Practices often have very little sway over the rules and requirements, which means that new and updated rules and regulations have to be followed to the letter.

Over the past few years, practices have adapted to Making Tax Digital for VAT rules, Basis Period Reform, and Companies House Reform – just to name a few. There are plenty more adaptations to come, with Making Tax Digital for Income Tax on the way in 2026.

You might struggle to manage your daily workload - all the while staying in the know with any regulatory updates in the industry - but you can stay updated in a few different ways so you never miss a thing.

• Courses and workshops: Attend regular training sessions, workshops, and webinars offered by professional accounting bodies or educational institutions.
• Publications: Subscribe to industry journals, newsletters, and online resources to stay informed about regulatory changes and best practices.
• News and alerts: Set up news alerts and RSS feeds for relevant industry publications and regulatory bodies to receive timely updates.

Tracking dates, deadlines, and rules manually, however, can be time-consuming. And, even as an accounting professional, wading through the legalese and lengthy legislation is no walk in the park.

Instead of taking copious notes and pinning all the deadlines to your calendar, you could use software, like Xero, that’s automatically updated in line with new legislation. That way, you’re not having to constantly tweak your processes or double-check deadlines and requirements to make sure you’re compliant.

If you’re interested in automating manual compliance checks, you can join over 250,000 accountants and bookkeepers using Xero in their practice. Check out our partner programme here.

2. Time-consuming compliance processes

Compliance work is rife with time-consuming manual processes. And, these processes can be prone to errors, too – duplicating a statement line or accidentally typing the wrong amounts can waste even more time, by preventing you from completing tax returns accurately.

Try to think of it like this: every time you’re working on compliance, you need to manually upload bank statements, reconcile individual statement lines (and code them correctly), and then compare bank and ledger balances. It's no wonder compliance takes forever.

Automating some of these tasks could save you time and help you maintain accuracy. Plus, processes taken care of by software are much easier to scale if you’re taking on extra compliance work (and don’t have an extra pair of hands).

If you’re tired of manually uploading, reconciling, and checking everything yourself, Xero’s software could sort everything out for you. When client transactions are imported automatically, you don’t need to request and upload client bank statements manually. Our bank feeds feature connects your clients’ bank accounts to Xero, so that transactions are pulled in automatically, every day.

And, once their information is in Xero, you can use the reconciliation predictions feature which suggests matches for statement lines based on past data. This speeds up reconciliation, as accurate suggestions for matches mean you only need to click ‘Ok’ to reconcile transactions.

3. Risk of non-compliance and penalties

Non-compliance is a risk to your clients and practice, creating financial strain and potentially impacting your reputation. Plus, penalties can cause financial strain for your practice and clients. Even after a fine is settled, you could still struggle with rebuilding client trust.

No doubt you already have systems and technical controls in place to keep you, your team, and your clients on the right track. But, with so many rules and regulations to follow – from anti-money laundering to GDPR, and UK accounting standards – practices are spread thin.

Accounting software can provide an additional helping hand and assurance that your processes and deliverables align with regulatory rules. For example, if you want to check that a draft tax return meets HMRC’s standards, our tax and accounts preparation software Xero Tax offers a live testing feature. This feature checks the tax return with HMRC, so you can see if it will be accepted once submitted.

Plus, our tax manager tool lets you see a live view of client obligations and deadlines, so you can track progress on submissions and see what’s outstanding. This makes it easier to prioritise tasks and keep track of what’s due.

5 ways to simplify accounting compliance

Here are five things you can start doing in your practice to make compliance easier.

1. Align with professional auditing standards using automation

Preparing financial statements and reports that align with auditing standards is easier when you don’t have to rely on manual processes. Automating repetitive administrative tasks can save you time, but also ensure consistent processes in line with UK and international standards – like UK GAAP and IFRS. For both of these standards, maintaining transparent, consistent, and comparable compliance processes is essential.

Xero software can help you achieve this by automating tax calculations, giving you access to proper audit trails, and helping you generate financial statements and reports. This makes it easier to meet professional auditing standards without increasing your administrative workload. Just take the history and notes feature – which shows you where transaction information has been changed for things like inventory and invoices.

2. Prevent improper accounting practices by clients

Your clients have plenty to think about, but if their accounting practices slip, it can cause disruption further down the line. Businesses are also vulnerable to fraud, and your clients might not realise the risks themselves.

Helping clients uphold proper accounting practices will protect them, and you. This can include educating clients by explaining the importance of accurate accounting, scrutinising source documents with them to help them identify red flags, and regularly reviewing client processes to provide feedback on their standards.

This can be much simpler, however, if you have an accountancy software solution that can provide a helping hand with client management. With Xero software, you can create customisable permissions, making sure the right transaction information is imported, and limiting the amount of manual admin in payroll, tax, and accounts preparation to reduce human error.

Your clients can also connect their bank account and get transactions flowing into Xero directly from their bank. This eliminates the manual statement upload step, and gets transactions straight from the source; reducing the risk of duplicate transactions and misstatements.

Once you’ve reconciled transactions in Xero, these records flow through to Xero Tax, where they autopopulate tax returns and sets of accounts. So, you can skip the manual upload step, too, between bookkeeping and tax products.

And, finally, you can set different levels of access for your team and clients to limit who can change or add information in Xero. With only specific people able to access financial information, it’s easier to trace back mistakes or missing information.

3. Secure sensitive data with robust cloud protection

Every practice has a responsibility to keep their clients’ data safe. It’s an essential part of earning and ensuring trust with your clients.

If your whole team is keeping files in desktop storage or software, it becomes much harder to trace specific information. It can also mean access to files is dependent on specific devices, which may not all have the same level of security. Tracking, organising, and securing data spread across multiple systems and devices is tricky.

Cloud-based software offers a secure and reliable way to store sensitive data, without relying on desktop storage or spreading files across multiple devices and platforms. Cloud-based software is accessible from any device, providing you have an internet connection. Files are stored in the cloud, instead of on a specific device.

Xero’s cloud software ensures the safety of sensitive client data through robust cybersecurity measures, such as two-factor authentication, encryption, and customisable permissions that let you restrict access. These features help you protect your practice from potential data breaches without obstructing your team from delivering work.

You can even assign specific tax roles in Xero HQ, such as preparer, preparer and filer, and reviewer. This means only specific people can complete certain compliance tasks within our accounts and tax preparation product, Xero Tax.

4. Integrate anti-money laundering compliance

Ensuring anti-money laundering compliance requires a multifaceted approach – combining policies, customer due diligence, staff training, and reporting. Anti-money laundering tools can smooth out the client onboarding process and help you consistently monitor and manage risk.

For example, our Xero HQ product lets you request information from clients for anti-money laundering checks. You can also see their replies and outstanding queries from within the software. This keeps compliance checks in one place, making it easier to monitor them. It should be noted, however, Xero doesn’t act as AML software, but can easily integrate with AML software - so you can see everything in one dashboard.

You can also add app integrations to Xero that help you maintain anti-money laundering compliance. Apps such as IdentityCheck, which lets you verify a client’s photo with government issued documents like passports or driving licenses. And, ApprovalMax, which allows you to route invoices and purchase orders to specific ‘approvers’ in your clients’ teams for sign off, before they can be processed and paid. This helps prevent fraudulent documents getting through.

And, finally, if you need to trace back individual records to check for financial misconduct, the assurancedashboard in Xero shows you who logged in, and when, as well as their activity. This helps you track changes to transactions or any unusual behaviour.

5. Stay compliant with evolving regulation

Traditionally, keeping up with regulation has been a conscious and constant effort for accounting and bookkeeping practices. Be it, attending webinars, following government updates, or connecting with colleagues to discuss and prepare for the changes.

Now, cloud-based software can take some of this responsibility off your hands, with feature updates that make it easier to meet new requirements. This is true for Xero Tax, our accounts and tax preparation product, which is automatically updated in line with new regulations. This helps you comply with the latest requirements as they come into place – without forking out for costly additional programmes or manual updates.

Ahead of Making Tax Digital for VAT, practices and businesses had all the features they needed in Xero to prepare MTD-compliant returns and meet HMRC compliance. This is also true for Basis Period Reform and Companies House reform, where Xero software was fit for the new rules.

Updates to Xero happen automatically, so you don’t need to keep on top of them yourself. This minimises the amount of manual tracking you need to do for regulatory changes, and reduces the risk of non-compliance with software processes designed for new rules.

Making compliance more simple can have a positive effect on the rest of your practice, not just helping you meet regulatory standards, but ensuring you serve clients better. When compliance becomes less of a manual effort, you can redirect that time towards advising and nurturing relationships with clients. By deepening their trust and making room for additional services, you can make your practice even more successful.