Streamline Tax Season: Use these 3 QuickBooks Tools for Your Small Businesses
Business Taxes Don’t Have to be Stressful!
Have you started your business taxes yet? If you haven’t, you’re not alone. Not to state the obvious, but the clock is ticking. And that clock is adding to your stress! You need to streamline tax season and we’ve got some tool recommendations to help small businesses.
Tax season is a stressful time for small businesses, especially if you haven’t been doing tax planning through the year. Small businesses may put it off because they don’t know where to start, they don’t have accounting software in place, or have an accountant on whom they can rely. Going alone is hard enough, particularly when you don’t know where to start.
Your accountant is an important part of a company’s “tripod”. We explain the tripod concept under the Who is Tripod Coaching & Consulting®?” on our About page. Click on the “Read More” box.
Before you continue on…take a moment and take a deep breath. Sometimes just reading about taxes creates stress. This post is to provide the help you may need but didn’t know who and where to ask.
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Tax season challenges?
Every business has challenges, but the ones that present themselves during tax season can seem daunting. The three listed below seem to be the prevalent ones looming over businesses:
Recordkeeping and documentation: we see a pattern of businesses who focus on revenue will often leave the accounting piece until “later.” They don’t realize how incomplete or inconsistent records, relying on manual methods such as spreadsheets or paper receipts, and not understanding tax obligations can be very problematic especially when it’s the first year they are preparing business taxes. Much of this can be addressed by using accounting software.
Compliance with tax regulations: this is an onerous task for business owners who aren’t CPAs or in the tax preparation industry. Staying up to date with tax law changes and understanding credits and deductions is confusing (understatement!). On top of this, not meeting filing deadlines can have consequences in the form of interest and penalties.
Cash flow management: this is the big challenge. It takes careful planning to ensure that the business has enough to cover state and/or federal tax payments with other financial obligations. Not planning can mean having unexpected tax liabilities due to underestimating the amount owed. Having an accountant with the background an expertise to provide tax planning is an essential part of business operations.
Do I need accounting software if I have an accountant?
“I’m not an accountant so why should I spend the money on it?” “I don’t make enough income so why should I spend the money on it?” “I’ll get it later once the company is bigger.” These are questions that most small businesses respond with when we ask what accounting software do they use. The answers may vary; however…
…when the answer is “I don’t need it,” these same small businesses wonder why their accountant’s bill is so high.
You know that we’re big on infrastructure (and if you’re not aware of this, poke around the rest of the website). So yes, you should use accounting software and there are several reasons why you should.
You’ll be able to create invoices and record income. You can send invoices to customers from the accounting system, which saves you time…which equals money.
You’ll also be able to enter entries into your bank account register and keep it reconciled.
It allows for easy input and categorization of transactions, particularly expenses. There are transactions that you can enter yourself, which saves time and reduces the likelihood of errors compared to manual methods, like spreadsheets or writing information on a piece of paper.
Keeping up to date on entries also means that you don’t have to remember what something is for months after you made a purchase or payment, and you don’t have to worry that you forgot anything.
You’ll be able to generate financial reports quickly and accurately.
These reports not only give you insight into your company’s financial health and performance, they also give you information that can be essential for decision-making, financial planning, and project costing.
You will need reports for your financial institution if you have a business loan or line of credit. You can generate these reports on a schedule or upon demand.
So, which accounting software should I use?
We recommend QuickBooks Online for new and small businesses since it is accessible anywhere there is an internet connection. Another benefit is the business doesn’t have to pay to put in a virtual server to access the accounting system unless the business’ growth requires this next step.
If you’re working with an accountant, there will be entries that your accountant or bookkeeper will need to do. But this is an on-going process. It should not be a gigantic endeavor by your accountant when it’s time for tax prep or if you need financial reports. That equates to large bills, which can be cost-prohibitive for a startup, small business, or sole proprietor. Plus, the upside of using QuickBooks Online is that it can be used in real-time in concert with your accountant since it is a cloud-based accounting system.
Plus, this is a cost-effective solution. The upfront costs are often lower than monthly accountant fees, although depending on your industry you may need to pay to have the accountant correctly set up your chart of accounts.
Choose the tax tool that makes sense for your business
Tax season can be both demanding and complex. The right tools and strategies mean it doesn’t have to be an uphill battle. QuickBooks has different tax tools depending on a company’s needs. These tools offer a range of features designed to simplify tax preparation and ensure compliance.
QuickBooks Online Tax: QuickBooks Online Tax is a comprehensive tax preparation solution that integrates seamlessly with your existing QuickBooks Online account. With this tool, you can automate a of the tax preparation process, saving you time and reducing the likelihood of errors. It automatically pulls your financial data from your QuickBooks Online account, it will generate all the necessary tax forms based on your financial data, and there are e-filing capabilities.
QuickBooks Self-Employed: This version of QuickBooks is tailored to the needs of self-employed individuals and offers features such as expense tracking, quarterly tax estimates, and simplified tax preparation. You can easily export this information to tax preparation software or share it with your accountant. This can be the perfect solution for a freelancer, independent contractor, or sole proprietor.
QuickBooks Cash Flow Planner: Cash flow management doesn’t happen without cash flow planning. QuickBooks Cash Flow Planner helps small businesses forecast and manage cash flow effectively. With this tool, you can do cash flow forecasting based on historical data and upcoming expenses, which helps you plan for tax payments and other obligations. You can also model different scenarios and assess the impact on the company’s cash flow. It will also track expenses in real time, which allows you to see cash flow trends, and identify areas that need attention.
Why do we recommend QuickBooks?
Our CEO founded her first business in 1996 and implemented QuickBooks as her accounting software. After all of these decades she still has the 3 ½ disks used to install the software. She says they are a keepsake from her early entrepreneurial days. While she needs the functionality of QuickBooks Enterprise for all her businesses, she recommends QuickBooks Online for most of Tripod’s clients.
Streamline tax season and reduce your tax season stress level!
Thanks to the powerful tools offered by QuickBooks, tax season doesn’t have to be overwhelming for small businesses. Whether it’s automating tax preparation, using a tool specifically geared towards the self-employed, or optimizing cash flow management, QuickBooks provides the resources small businesses need to succeed during tax season and beyond. By leveraging these essential tools, small businesses can streamline operations, minimize errors, and ensure compliance with tax regulations, setting the stage for long-term success.
Need help with next steps or have questions about this topic?
We know that a lot of business struggle with their accounting and finances. It is often left “unattended” because the company doesn’t have or know of an easy and efficient to manage this area. That’s where QuickBooks Online comes in and it’s why we’re offering it — to fill the gap for small businesses.
Tripod Coaching & Consulting® is a QuickBooks Online Business Affiliate. As part of our relationship with QuickBooks Online, we are excited to be able to offer a discount. Simply visit our link for details.
If you have tax questions and don’t have an accountant, we’re happy to make introductions. It’s important to find the right accountant. Just don’t wait…the clock is ticking.
If you need help, please reach out via the contact page. We can set up a call to talk and we’ll develop a initial strategy based on our initial conversation.
We’re also happy to answer questions about this post. Leave us a note in the comment section, or reach out on the contact page.
The tripod is the company’s attorney, accountant, and banker. These three individuals work with the business owner(s) to lay an initial structural foundation. There is a 4th very important component that is the top piece connecting the 3 legs of the tripod — the insurance broker. Many companies wait to connect with an insurance broker; however, this creates potential risk exposure. It’s essential to get the correct insurance policies in place before the company begins providing products and services to their customers.
The company then builds their revenue and growth on this foundational tripod.
The challenge of business operations
The challenge is most business owners and executives find business operations tedious, and it takes a backseat to activities that directly generate revenue. They often don’t have a solid understanding of business operations because it includes a lot of specific and nuanced areas that they may not have been exposed to before starting their business. Then after the business opens, many business owners focus on what they know — the services and products they sell. And most are really good at selling because they know their industry and ideal customer.
The issue is that without a strong foundation, the business may not survive over the long haul or when faced with challenges that have legal and monetary ramifications. Why? Because a company cannot sustain itself only through revenue.
So, why don’t entrepreneurs invest time and money in their business operations? Partly because they may not realize how important it is for long-term business success.
Diana also believes this is due to industry and entrepreneurial programs not offering outside services and training in business operations topics, particularly to small businesses.
Do a search for consulting services and you’ll find a lot of listings for sales, marketing, opportunity identification, recruiting, etc. But you won’t find many for business operations coaching and consulting. The reasons are two-fold. First, the other industries are associated with increased revenue and are a lot more fun to teach and provide. Second, because many of those consultants don’t realize the importance of business operations so they don’t incorporate it into their own business model.
Our mission
Our mission is to help organizations with their planning for the “what if”™.
What if we grow?
What if we want/need to hire people?
What if we need to expand to other states?
What if we want to sell the business?
What if we are sued?
What if we…
We help you plan for the “what ifs” you may know about and identify ones that you thought wouldn’t affect your business.