The ever changing landscape of accounting technology runs the gamut. With the number of players in the market increasing by the day, the choices that small business owners can select from more than abound. Now, more than ever, entrepreneurs have a greater selection of accounting tools from which they can choose. Having a number of criteria in the purchase process makes the task less daunting. Here are several that can give you a jump start for technology that will make the cut.
- Simplicity. Let’s face it. No matter how fancy dancy the accounting system is, if it complicates the workflow, no one will ever use it. The objective of the technology should be to streamline the accounting process not to become burdensome and overloading your current capacity. With every new experience comes a learning curve. One way to shorten it and make things less complicated is by having staff trained in the use of the technology. This way questions are answered and policies for use can be established so that the transition is smooth sailing right from the start.
- Efficiency. Speaking of smooth sailing… every small business that integrates technology should have a goal prior to purchase of improving the company’s accounting workflow. Technology can help to this end by automating many of the routine bookkeeping tasks that staff handles on a periodic basis. Key activities such as invoicing recurring clients and paying recurring bills are great examples of how accounting technology can help you save both time and money in the accounting process.
- Productivity. Ever wondered if there was a way to get more done with less effort? The right technology integration in your business will help you do just that. Some programs are better at moving you toward greater levels of output than others. That is because there are resources that boast more advanced features like automated billing, online banking, automated data backup, and the like. So your selection should ultimately depend on the productivity categories your company identifies. There are accounting technology tools on the market that will allow you to start small and then add-on as the need arises. This is especially good to know when you are looking to expand but need to stay within a certain budget to meet the company’s cash flow needs.
- Profitability. The name of the game in business is profit. I don’t know anyone in business today that invests their hard earned cash to simply break-even, or worse to purposely generate a net loss. With that said, keep in mind that one of the primary reasons to add accounting technology is so that you can increase your company’s profits. One way to do this is by ensuring that the cost of technology is less than what it will help you bring in. This may be seen in how your employees use the program and the type of information it provides. There is a saying in the accounting world, “Garbage in is garbage out.” In other words, make sure that what goes into the system is accurate, reliable, and timely enough to help managers (including you) make the best decisions possible from accounting data.
As you can see some accounting technology will have more bells and whistles than others. It goes without saying that buyer should beware before making the leap into the accounting tech and software world. What criteria do you use when select the right accounting technology for your small business? Leave your comments below. I’d love to hear from you!
Staying up on tax laws is key to paying the least tax possible when you’re self-employed. Even if you hire someone to complete your return, use these tax strategies to reduce what you owe.
Pay Less Tax By Legally Reducing Taxable Income
Many self-employed persons are surprised to find that they can reduce their taxes by lowering the income they will be taxed on. You can do this by following a tax reduction plan the entire year. One strategy that entrepreneurs often miss is saving for retirement. When you contribute to a retirement account like a Self Employed Pension Plan, for example, you not only pay less tax, but build tax free savings.
Estimate Taxes Ahead of The Deadline
When you work as an independent contractor instead of an employee there is no tax withheld. That does not mean that you are not required to send in what you owe. A top concern for many entrepreneurs is how much taxes they will have to pay. You can figure this out by keeping a good record of sales and then computing your gross income. A handy tool that can help with this is an income tax calculator. When you have the estimated amount, be sure to send them in. Paying on time helps you save money by not having to pay late filing fees.
File the Right Forms
When you file a business tax return you will need to complete the forms. The one that you do will depend on your company’s legal structure. For example, if you are setup as a sole proprietor then you will need to file a Schedule C to report business income. Other forms, including Partnerships, “S” Corporations and “C” Corporations have their own forms, as well.
Being self-employed has many benefits including earning as much as you’d like. What matters overall is not how much sales you bring in but how much you get to keep.
Do you use tax reduction strategies to maximize your profits? Share your time proven tips in the comments below.