Small and mid-level business owners face a unique set of ongoing issues. You may not have the infrastructure of a giant corporation, but you are obligated to make big decisions about the health of your business every day. Without a team of lawyers and CPAs on hand to offer advice, you rely on your own knowledge, research skills, and common sense to guide you through some of the more complex aspects of business, from investing your capital to doing your taxes.
As your business grows, your duties will change. You’ll spend more time making creative decisions (about your inventory, your staff, and your location), and you’ll have less time to focus on important details like taxes. No one but the CEO of a small business can make these big decisions. Fortunately, accounting software can aide you in tracking the details that will ultimately inform the growth of your business. This essential tool empowers you to:
1. Catch Every Detail
As a business owner, you are legally obligated to pay taxes on your income. But how much do you pay on every sale you make? Do you pay taxes on gift cards and other incentive programs for customers? Does your tax burden change if you donate a certain amount of your inventory to charity? A difference of just a few hundred dollars in profits can change your tax bracket, drastically impacting the amount you owe the IRS each year. Accounting software tracks every sale and purchase you make in real time, so you can answer these questions accurately, without hunting through past bank statements to find count your pennies.
2. Rely on Expert Knowledge
By integrating seamlessly with both your Point of Sale and the system that actually files your taxes, accounting software automatically answers certain questions for you. Don’t waste hours of your time hunting down the instructions you need to manually fill out form 1120S. Instead, rely on the accumulated expertise of the accountants who built your software. As long as you record every transaction accurately, the work is half done. You will always have control over how your taxes are filed, but you are no longer obligated to get lost in every tiny detail.
3. Ditch Data Entry
There will always be some element of fact-checking when it comes to filing your taxes. However, the time it takes to do this tedious task can be cut down significantly with the right tools for the job. Integrating your POS with accounting software means you no longer need to manually migrate your sales data into your tax forms. This saves you countless hours of unnecessary work – and more importantly, it decreases the likelihood of human error. Save money on both ends of the process: by saving your valuable time while doing taxes, and by providing the IRS with the most accurate information you can.
4. Scale Up Slowly
Automating business taxes makes it easier to track revenue and predict what your tax burden will be each year. This empowers you to make better-informed decisions about the overall growth of your business. It also makes it easier to invest and save money that can help you grow profits over time. For example, if you pay slightly less in taxes than you predicted, why not invest that money in new equipment, inventory, or even a business savings account? On the other hand, if it turns out that you’re spending more than you want to on payroll taxes, you may consider changing the way you compensate employees – or simply hiring independent contractors instead.
Automated accounting software certainly streamlines process of doing your taxes – and it also improves many other aspects of running a business. There are a number of options you can use to integrate your Point of Sale, accounting system, and tax software. With so many great choices, you’re bound to find one that works for your unique business needs.