Starting your dream venture is a fascinating adventure. Doing what you’re passionate about, being your own boss, and, at the same time, creating employment opportunities for others. There’s nothing quite like it. But great dreams, of course, involve great responsibilities and challenges.
While having your own business may be the best thing you’ll ever do, it’s not always easy. There’s funding to be acquired, a workforce to be hired, and lots of research to be done. In the middle of all this hassle, business financials are seen as a frustrating, draining task. The reason behind this is their complex nature and the fact that they consume a lot of time and effort.
By business financials, we mean calculating tax expenses and paying them off when they’re due, keeping track of all expenses, paying off the vendors on time, and also drafting financial reports for auditing purposes. Fortunately, QuickBooks by Intuit has emerged as a smart accounting tool which makes it possible for small and medium scale enterprises to generate and process accurate and timely accounting data on the go.
In this post, we will be discussing some of the most common accounting challenges faced by startups and how QuickBooks addresses each one of them separately.
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Tax Calculation
Calculating tax expenditure for a business is very different from doing the same for yourself. As a business owner and employer, you won’t only be filing taxes for yourself and the business but on the behalf of your entire workforce. Other than that, the nature of business expenses can vary. You could be incurring huge costs for purchasing raw material or regularly be paying for car fuel.
Not many new business people are aware of the fact that there are a lot of deductible expenses that can be subtracted from taxable income to reduce your overall tax expenses. QuickBooks not only categorizes these expenses but also sorts them out in a way that they’re easy to deduct at the time of tax calculation. With the help of QuickBooks, you can download all federal and state forms as per the law which prevails in your state. If your state government allows, you can even get QuickBooks to fill in the form for you and make the payment on your behalf. If you or your accountant has lost track of the tax schedule, QuickBooks even sends out reminders both via an email and as a notification on the home page.
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Storage of accounting data
If you’re an aspiring entrepreneur who just started out, you probably don’t have enough funds to employ an extensive infrastructure and get the best datacenters on board. To employ software that caters to your accounting needs, you also need hardware that provides infrastructural support, servers that store all your data, and a team which has a good understanding of how to handle things when they go wrong. We’re talking about troubleshoots, handling big data, and cybersecurity.
QuickBooks, on the other hand, is a cloud-based accounting software. This means it only appears as an icon on your desktop. All the infrastructure, hardware, and data servers are hosted by a third party vendor. Your vendor is also responsible for regular maintenance of the software, installing all the updates when they’re available, and making sure the software is running without a hitch. Most of these services are included in your subscription packages and don’t cost extra.
This way, businesses can save up on costs and invest them where they’re needed. Cost cutting is not just important for businesses, it’s vital. So much so, that at times it makes all the difference between a market leader and a second best competitor.
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Invoice accounting
One of the biggest challenges new businesses face is how to cater to customers. If you operate online, you need to incorporate multiple modes of payment including credit card, direct deposits, and PayPal. QuickBooks allows you to connect all three methods to your bank account. No matter which method the customer uses to pay their dues, QuickBooks will record the transaction in the company’s records and update the same with the bank.
Then come the invoices. QuickBooks allows you to not only track your invoices but also send them over electronically to the concerned parties. You can send invoices to the customers in batch form or separately for every transaction, depending on your requirements. Invoice generation can be quite a challenge for businesses if there are too many receipts to be dealt with and scanned. At times the accountants spend days trying to manually enter data and send bills to each customer through post. QuickBooks also comes with an added feature of being able to remind your customers for payments if they’ve missed the deadline.
Guest article written by: Lisa McCollum works as an ERP specialist for Gotomyerp.com and is a regular contributor to this blog. She has a vast experience in the field of smart accounting solutions for small businesses. Gotomyerp.com is an Intuit authorized commercial provider of QuickBooks hosting. For further details about their services, visit their website.