Below, we summarise how Dext, Xero and ChatGPT supported businesses throughout 2025, and how we recommend using them effectively in 2026 to reduce admin, strengthen compliance and improve financial decision-making.
If you have a quieter period over the festive break, it can be an ideal time to review how your systems are set up. Implementing some of the practical tips below now can help you hit the ground running with your business admin in 2026, reduce unnecessary manual work and start the year with clearer, more reliable numbers.
Key Dext updates introduced during 2025
Dext’s 2025 UK updates focused on cutting manual work while improving data quality and compliance. These changes are now available and making a practical difference for businesses:
- VAT number checks against HMRC
Dext now flags invalid VAT numbers and mismatched supplier names automatically which means fewer posting errors, reduced fraud risk and more reliable VAT returns.
- Paying suppliers directly in Dext (via Airwallex)
Bills can be approved and paid in one place, including multi-currency payments, with automatic reconciliation to Xero. This allows quicker pay runs and improved visibility over cash flow.
- MTD dashboard for ITSA (Solo, UK only)
A central view of Making Tax Digital deadlines and submissions which results in fewer missed HMRC dates and less last-minute pressure.
- Automatic prepayments to Xero
Costs such as insurance and software are spread across the correct accounting periods using journals so that you can now have cleaner monthly profit and loss figures without spreadsheets.
- Simpler document capture
Dext can help you create supplier aliases, and upload via copy-and-paste and WhatsApp (rolling out) which benefits users with less chasing paperwork and faster processing.
Alongside client-facing features, Dext also improved features that benefit users indirectly such as approval workflows, supplier statement support and tracking tools for accountants. This results in faster turnaround times and more consistent bookkeeping for clients.
Practical steps to take in Dext before 2026
A few focused actions now can unlock immediate value, such as:
- enable VAT validation and review your supplier records
- trial Dext bill payments with a small group of suppliers
- ask us to enable prepayments for regular costs
- continue sending documents and use the newer capture options as they become available.
How can ChatGPT be used alongside Dext?
When paired with Dext data, ChatGPT can help businesses act on information more quickly and clearly. For example:
- Accounts payable clean-up and supplier risk
Summarise VAT and supplier name mismatches into an action list and draft emails to suppliers requesting corrections.
- Payments and short-term cash flow insight
Review upcoming payment dates, early settlement discounts and the near-term cash flow impact using exported data.
- Month-end explanations
Turn Dext-to-Xero prepayment reports into clear, plain-English commentary for boards or lenders.
Xero updates that can improve day-to-day finance work
Xero’s 2025 changes were designed to make routine tasks quicker and compliance more intuitive. The updated layout which has resulted in faster access to invoices, bills and key figures, with simpler workflows for compliance tasks, includes:
- clearer separation between Sales and Purchases
- reporting positioned front and centre
- a dedicated Tax section and more consistent Settings.
Use Xero to prepare for Making Tax Digital for Income Tax
MTD for Income Tax remains one of the most important upcoming changes for business owners and landlords. Here are the important tax timelines to be aware of:
- £50,000 income threshold from April 2026
- £30,000 from April 2027
- £20,000 from April 2028
Xero will support multiple businesses and rental income, with separate quarterly updates and a single Final Declaration.
What businesses should do now in Xero
Early preparation will make the transition significantly smoother:
- confirm whether you’re likely to exceed an MTD threshold in 2026 or 2027
- plan for quarterly updates rather than annual submissions
- ensure each business or rental income stream sits in the correct Xero entity
- familiarise your team with the updated navigation and refresh internal processes.
How can ChatGPT be used alongside Xero?
ChatGPT can help turn Xero data into insight rather than static reports. Here are some examples:
- Finance packs and forecasting
Create 12-month cash flow forecasts and board-ready summaries from exported Xero data.
- Contract and lease reviews
Extract fees, renewal dates and termination terms from PDFs into a simple comparison table.
- Supplier and pricing comparisons
Compare vendors by cost, terms and Xero integration, then generate a concise buyer’s guide.
Everyday ChatGPT use example for business owners
Beyond accounting software, many business owners are using ChatGPT to save time during the working week:
- summarising Slack and email threads into clear actions and deadlines
- re-using KPI packs through shared projects
- creating simple LinkedIn visuals for VAT or MTD reminders
- prioritising finance tasks using voice on mobile
- researching equipment or software purchases with side-by-side comparisons.
How to use accounting software and AI successfully in 2026
Throughout 2025, Dext and Xero continued to reduce admin and improve the accuracy of financial data. When combined with ChatGPT, they also helped businesses explain their numbers more clearly and make faster, better-informed decisions.
Looking ahead to 2026, the priority should be getting the basics right including VAT validation, payment workflows and MTD readiness as some examples, and then using AI to support reporting, forecasting and supplier decisions.
LWA’s innovative accounts team can help your business use AI
If you’d like support applying the advice from this blog and using AI tools in your own business, our inhouse innovation lea, Matt Jones, and client digital support expert, Bradley Allen-McKenna are both here to help. Matt or Bradley can help you use Dext, Xero and AI tools in a way that genuinely improves efficiency and confidence in your numbers. Contact them on 0161 905 1801 or email:
matt@lwaltd.com
bradley@lwaltd.com