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Mike P - Green background
Michael Pignatelli, CPA
CEO, Unloop

Author: seoteam

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

There's a lot to think about when filing your taxes. The process can be even more complex for business owners like you because of the many tasks you need to accomplish. If you’re a beginner in the field, the lack of knowledge and the intricate details of calculating, collecting, and filing taxes can be overwhelming. Many tax rules and regulations, especially with sales taxes, are always subject to change.

That’s why it’s important to get organized. Doing taxes right will ensure you won’t get in trouble with the Internal Revenue Service (IRS), and your business can run smoothly. With that, here are nine tips you can apply and the help you can get from remote bookkeeping companies in case you’ll need to partner with one.

1. Get your tax information right

The first thing you need to do is to register as a taxpayer. You must ensure you get your basic information correctly, such as your name, address, and contact number. You should also determine your tax status or business type. Owners must determine whether your business type is a sole proprietorship, corporation, partnership, cooperative, or limited liability. What you declare will determine the taxes you need to pay.

2. Know which taxes should concern you

As a business, you’ll be concerned with corporate taxes, sales taxes, your personal income tax, and the income taxes of your employees (if you have any).

Corporate income tax: These taxes are applied to all companies. Companies need to pay duties based on their total annual income.

Personal income tax: Owners and shareholders of a company should also declare their personal income tax. This is based on their total income for the year.

Employee income tax: And if you have employees, it is your duty to compute, deduct, and remit income taxes of your employees.

Sales taxes: All the goods you sell, unless classified as tax exempt, are subject to sales tax. Buyers pay this, but it is your duty to compute, collect, and remit them.

3. Know the different tax forms

The paperwork does not stop after registering yourself as a taxpayer. It is only the beginning; the next step would be to familiarize yourself with these many different tax forms. 

  • W-9: The W-9 contains your Taxpayer Identification Number (TIN). It is the form to give whenever an office, organization, and eCommerce platform requires a TIN submission. 
  • W-2: If you have employees, you should submit this form on behalf of your employees. It contains employees’ total income for the recent tax year.
  • W-4: Your employees will submit the W-4 form to you, their employer. This form includes details on how much tax you should withhold and remit from your staff’s gross pay.
  • 1042S: This form that declares income is for foreign business owners.
  • W-8BEN/W8-BEN-E: To be approved as foreign sellers and become non-US taxpayers, business owners need to accomplish the W-8BEN/W8-BEN-E forms. After doing so, they will be issued a Foreign Status Certificate.
  • 1099: There are two kinds of 1099 forms, the 1099 interest income and the 1099 miscellaneous income. The first comes from banks and financial organizations that pay you interest. You should declare the deposit on your income tax return. The latter declares a freelancer/self-employed person’s total income from clients.
  • 1098: A form homeowners accomplish to declare mortgage interest.
  • 1040: The basic form you’ll accomplish to declare your annual income tax return.

While some of the forms here don’t apply to you, it would be best to familiarize yourself with those that do.

4. Discover when tax exemption applies

While most individuals and transactions are taxable, there are also tax exemptions. For instance, a state defines a certain non-taxable income which, when satisfied , can exempt taxpayers from paying taxes. When organizations function solely for charity, religion, education, and scientific research, they are tax exempted.

Regarding sales taxes, there are also various tax exemption rules. For example, certain goods, like food and groceries, are classified as non-taxable as they are necessities. The regulations vary per region as sales taxes are determined per province or state. A financial transaction in one state may be exempted in a certain state but may be taxable in the other. Hence, as a business owner, you should check for specific rules on a grassroots level. 

5. Be concerned about non-payment repercussions

To give you a little more push to take taxes seriously, declare accurate values, and pay on time, you should also be aware of the repercussions you might face if you fail to become a good taxpayer.

  • The IRS can seize assets and bank accounts to acquire the tax payments you fail to pay.
  • They can also charge interest to you, so you’ll end up paying the tax debt plus the interest.

So, instead of suffering these consequences, it’s in your best interest to be a responsible taxpayer. You can also make use of various tax assistance from the IRS. Some of these are as follows:

  • Communicate a payment arrangement to the revenue officers that is a win-win for you and the IRS.
  • You can also apply for tax relief to reduce the charges and bills you need to pay.
  • Be honest about the payment terms you are capable of. Your state's internal revenue organization will help you find reasonable terms to pay off your debt.
  • Report immediately to explain why you could not pay taxes instead of waiting to be called out.

6. Do bookkeeping and accounting early

One important part of tax preparation is to begin bookkeeping and accounting early. Bookkeeping tracks all financial business transactions and organizes them into categories. When tax season comes, you’ll have all the data you need for the tax declaration. 

Meanwhile, accounting can help you understand how much tax you’ll be paying. Your accountant can generate tax and financial reports for you, so you can set aside tax payments immediately and not spend them on business operations. Business owners like you know very well that the after-tax income is your real income, and the money you should spend to make your business thrive or grow.

In case you cannot squeeze these tasks on your plate, you can always rely on a remote bookkeeper or sign up for a virtual bookkeeping service.

what is remote bookkeeping

7. Invest in bookkeeping, accounting, and tax software

Not only should you collect financial data, but you should also ensure that you get all the details accurately. One way to achieve this is to invest in software that captures financial statements and documents and converts them into usable text data. This method takes away the possibility of human error in manual data entry. You can rely on Dext Prepare, Shoeboxed, and Wave for this task. 

Meanwhile, don’t fall short of reliable, investment-worthy online bookkeeping and accounting software. Check out Quickbooks Online, Xero, Sage50 Cloud, and Freshbooks. These tools can help you track the income and expenses of your business; they allow bank reconciliation, the creation of invoices, inventory management, and report generation. Experts in a virtual bookkeeping service company also use these tools to ensure accuracy and efficiency in bookkeeping for your business.

8. Plan and forecast your taxes

Getting ready for tax season doesn’t only mean minding how much you need to pay for the current tax year. You can always enact tax planning to forecast how much you’ll spend for the next quarter or even in the next tax year. You can make this area a part of your business forecasting.

When you see how much you need to pay in advance, you can plan how you can lower your taxes. You can also ensure that you set aside the tax amount you have calculated to avoid using it for other expenses. Finally, you can also plan how you will spend your after-tax income to scale your business.

9. Seek help from experts

You will be faced with a lot of costs when running a business. So, you may think that doing accounting and bookkeeping on your own is the way to go. Besides, it is one way to save some costs. If you have experience, then you can probably handle these yourself. However, for those who aren’t trained for it, it is still best to seek help from experts because of the following reasons:

  • Trained and licensed individuals, those who are Certified Public Accountants even, will handle your bookkeeping and accounting.
  • All financial transactions for the year will be put together and updated timely.
  • Bookkeepers and accountants will utilize software to ensure data accuracy.
  • You’ll receive financial reports regularly and as needed.

Remote Bookkeeping Business By Unloop

As a small business owner, it’s important to know everything there is to know about taxes. It’s beneficial to know the different tax laws and regulations that apply to your industry. You can avoid costly mistakes and penalties by understanding the basics of tax preparation and filing. The tips we’ve shared should give you a good starting point, but if you need more assistance, don’t hesitate to reach out to a virtual bookkeeper, accountant, or tax specialist. 

What is remote bookkeeping? Remote bookkeeping services is what we do. At Unloop, we provide:

  • Small business and eCommerce online bookkeeping services
  • Accounts payable management
  • Forecasting
  • Payroll solutions
  • Tax management

We’re experts in the field and we can help you get a head start on your business’s taxes. Have more questions? Contact us today for a free consultation!

9 Tax Preparation Tips and How a Remote Bookkeeping Business Can Help
Watch Now

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

There's a lot to think about when filing your taxes. The process can be even more complex for business owners like you because of the many tasks you need to accomplish. If you’re a beginner in the field, the lack of knowledge and the intricate details of calculating, collecting, and filing taxes can be overwhelming. Many tax rules and regulations, especially with sales taxes, are always subject to change.

That’s why it’s important to get organized. Doing taxes right will ensure you won’t get in trouble with the Internal Revenue Service (IRS), and your business can run smoothly. With that, here are nine tips you can apply and the help you can get from remote bookkeeping companies in case you’ll need to partner with one.

1. Get your tax information right

The first thing you need to do is to register as a taxpayer. You must ensure you get your basic information correctly, such as your name, address, and contact number. You should also determine your tax status or business type. Owners must determine whether your business type is a sole proprietorship, corporation, partnership, cooperative, or limited liability. What you declare will determine the taxes you need to pay.

2. Know which taxes should concern you

As a business, you’ll be concerned with corporate taxes, sales taxes, your personal income tax, and the income taxes of your employees (if you have any).

Corporate income tax: These taxes are applied to all companies. Companies need to pay duties based on their total annual income.

Personal income tax: Owners and shareholders of a company should also declare their personal income tax. This is based on their total income for the year.

Employee income tax: And if you have employees, it is your duty to compute, deduct, and remit income taxes of your employees.

Sales taxes: All the goods you sell, unless classified as tax exempt, are subject to sales tax. Buyers pay this, but it is your duty to compute, collect, and remit them.

3. Know the different tax forms

The paperwork does not stop after registering yourself as a taxpayer. It is only the beginning; the next step would be to familiarize yourself with these many different tax forms. 

  • W-9: The W-9 contains your Taxpayer Identification Number (TIN). It is the form to give whenever an office, organization, and eCommerce platform requires a TIN submission. 
  • W-2: If you have employees, you should submit this form on behalf of your employees. It contains employees’ total income for the recent tax year.
  • W-4: Your employees will submit the W-4 form to you, their employer. This form includes details on how much tax you should withhold and remit from your staff’s gross pay.
  • 1042S: This form that declares income is for foreign business owners.
  • W-8BEN/W8-BEN-E: To be approved as foreign sellers and become non-US taxpayers, business owners need to accomplish the W-8BEN/W8-BEN-E forms. After doing so, they will be issued a Foreign Status Certificate.
  • 1099: There are two kinds of 1099 forms, the 1099 interest income and the 1099 miscellaneous income. The first comes from banks and financial organizations that pay you interest. You should declare the deposit on your income tax return. The latter declares a freelancer/self-employed person’s total income from clients.
  • 1098: A form homeowners accomplish to declare mortgage interest.
  • 1040: The basic form you’ll accomplish to declare your annual income tax return.

While some of the forms here don’t apply to you, it would be best to familiarize yourself with those that do.

4. Discover when tax exemption applies

While most individuals and transactions are taxable, there are also tax exemptions. For instance, a state defines a certain non-taxable income which, when satisfied , can exempt taxpayers from paying taxes. When organizations function solely for charity, religion, education, and scientific research, they are tax exempted.

Regarding sales taxes, there are also various tax exemption rules. For example, certain goods, like food and groceries, are classified as non-taxable as they are necessities. The regulations vary per region as sales taxes are determined per province or state. A financial transaction in one state may be exempted in a certain state but may be taxable in the other. Hence, as a business owner, you should check for specific rules on a grassroots level. 

5. Be concerned about non-payment repercussions

To give you a little more push to take taxes seriously, declare accurate values, and pay on time, you should also be aware of the repercussions you might face if you fail to become a good taxpayer.

  • The IRS can seize assets and bank accounts to acquire the tax payments you fail to pay.
  • They can also charge interest to you, so you’ll end up paying the tax debt plus the interest.

So, instead of suffering these consequences, it’s in your best interest to be a responsible taxpayer. You can also make use of various tax assistance from the IRS. Some of these are as follows:

  • Communicate a payment arrangement to the revenue officers that is a win-win for you and the IRS.
  • You can also apply for tax relief to reduce the charges and bills you need to pay.
  • Be honest about the payment terms you are capable of. Your state's internal revenue organization will help you find reasonable terms to pay off your debt.
  • Report immediately to explain why you could not pay taxes instead of waiting to be called out.

6. Do bookkeeping and accounting early

One important part of tax preparation is to begin bookkeeping and accounting early. Bookkeeping tracks all financial business transactions and organizes them into categories. When tax season comes, you’ll have all the data you need for the tax declaration. 

Meanwhile, accounting can help you understand how much tax you’ll be paying. Your accountant can generate tax and financial reports for you, so you can set aside tax payments immediately and not spend them on business operations. Business owners like you know very well that the after-tax income is your real income, and the money you should spend to make your business thrive or grow.

In case you cannot squeeze these tasks on your plate, you can always rely on a remote bookkeeper or sign up for a virtual bookkeeping service.

what is remote bookkeeping

7. Invest in bookkeeping, accounting, and tax software

Not only should you collect financial data, but you should also ensure that you get all the details accurately. One way to achieve this is to invest in software that captures financial statements and documents and converts them into usable text data. This method takes away the possibility of human error in manual data entry. You can rely on Dext Prepare, Shoeboxed, and Wave for this task. 

Meanwhile, don’t fall short of reliable, investment-worthy online bookkeeping and accounting software. Check out Quickbooks Online, Xero, Sage50 Cloud, and Freshbooks. These tools can help you track the income and expenses of your business; they allow bank reconciliation, the creation of invoices, inventory management, and report generation. Experts in a virtual bookkeeping service company also use these tools to ensure accuracy and efficiency in bookkeeping for your business.

8. Plan and forecast your taxes

Getting ready for tax season doesn’t only mean minding how much you need to pay for the current tax year. You can always enact tax planning to forecast how much you’ll spend for the next quarter or even in the next tax year. You can make this area a part of your business forecasting.

When you see how much you need to pay in advance, you can plan how you can lower your taxes. You can also ensure that you set aside the tax amount you have calculated to avoid using it for other expenses. Finally, you can also plan how you will spend your after-tax income to scale your business.

9. Seek help from experts

You will be faced with a lot of costs when running a business. So, you may think that doing accounting and bookkeeping on your own is the way to go. Besides, it is one way to save some costs. If you have experience, then you can probably handle these yourself. However, for those who aren’t trained for it, it is still best to seek help from experts because of the following reasons:

  • Trained and licensed individuals, those who are Certified Public Accountants even, will handle your bookkeeping and accounting.
  • All financial transactions for the year will be put together and updated timely.
  • Bookkeepers and accountants will utilize software to ensure data accuracy.
  • You’ll receive financial reports regularly and as needed.

Remote Bookkeeping Business By Unloop

As a small business owner, it’s important to know everything there is to know about taxes. It’s beneficial to know the different tax laws and regulations that apply to your industry. You can avoid costly mistakes and penalties by understanding the basics of tax preparation and filing. The tips we’ve shared should give you a good starting point, but if you need more assistance, don’t hesitate to reach out to a virtual bookkeeper, accountant, or tax specialist. 

What is remote bookkeeping? Remote bookkeeping services is what we do. At Unloop, we provide:

  • Small business and eCommerce online bookkeeping services
  • Accounts payable management
  • Forecasting
  • Payroll solutions
  • Tax management

We’re experts in the field and we can help you get a head start on your business’s taxes. Have more questions? Contact us today for a free consultation!

Read more

Owners of small businesses online must know that proper cash flow management and tracking are essential to business growth and success. And if you're using Peachtree accounting software, then you know that it can help keep your books in order. Peachtree accounting software has been around for some time. Some accountants swear by it, while others have grown tired of its many limitations.

But is this the premium accounting software you've been looking for? Is Peachtree the only software in town? What are good alternatives to this program? Keep reading to find out!

A Brief on Peachtree Complete Accounting Software

Peachtree accounting is just one option, but it's popular thanks to its robust functionality and scalability; it’s applicable for both small businesses and big corporations. Whether you're a small business owner or a freelance accountant, Peachtree can help you streamline your accounting processes.

The software includes all the basic accounting tools, like creating invoices, tracking payments, and automating financial reports. But it also goes a step further with solutions for inventory management and time tracking.

Peachtree has all functionality you need to set up for an accrual accounting system, such as accounts payable and accounts receivable. And because of its cloud-connected features, you can be sure that your accounting data will always be up-to-date.

Does Peachtree Still Exist?

Sage Software originally developed Peachtree accounting software. However, the product is now simply called Sage 50Cloud Accounting. While the name has changed, Sage 50 Accounting still offers the same robust functionality that many users loved about Peachtree.

Why You Shouldn't Get Peachtree Software for Accounting Your Finances

Sure, Sage offers the core functionalities of an accounting software. However, there are a number of reasons why you might not want to use this financial tool for your online business.

Oversaturated Interface

Sage 50 may have advanced budgeting and an eloquent system for vendor management and handling inventory, but it is not at all user-friendly.

With too many tabs and small fonts, Sage creates an oversaturated interface that is too busy, with too many colors and buttons. This can make it daunting for users to input transactions on their journal entries and general ledgers, and it’s visually overwhelming.

Experienced users can customize this software to make it less imposing. But if you’ve just recently acquired Sage 50 or you don't have any idea on how to use accounting software at all, you'll have a hard time navigating through its interface, let alone setting it up for your online business.

Overcomplicated Features

Many users find that its basic features are overly complex. One of the most common complaints is that the software is designed for accountants, not small business owners. As a result, many small business owners spend more time figuring out how to use the software than actually using it.

Cash flow, progress billing, and invoicing are all core functionality that business owners find useful. But when they attempt to utilize these solutions on Sage, they find that they’re unnecessarily broad. 

Moreover, Sage’s more advanced accounting features, such as job costing and advanced inventory management, are designed for larger businesses. As a result, small business owners with only a few employees on their payroll may find they are paying for features they will never use.

Poor Customer Support

We've covered how users may have to spend a lot of time troubleshooting errors. Unfortunately, getting assistance from Sage 50's tech support when needed is quite draining. The wait times can be long, and you may not always get the most helpful advice from the advisors. You’ll be pouring hours and hours trying to get the support you need, but there will be many times when you can’t.

Costs More Than You Think

Many small businesses choose Sage 50 for their accounting software because it's one of the best financial tools. However, one of the drawbacks of Sage 50 is that it's pricey.

You can try Sage 50 out for free for one month. But after that, you'll be charged for the subscription plan you choose. The cost of each plan will depend on the number of people who'll use this software and the features you are after.

If you choose its starter plan (Pro Accounting), you can expect to pay around $33 per month. If you need more advanced features, such as audit trails, serialized inventory tracking, or workflow management, you can expect to pay closer to $91 a month.

For many online small businesses fairly new to the industry, that's a lot of revenue to cash out.

Sage users also complain that if you're using Pro Accounting and you want to back up your files, the software requires you to make an upgrade so that you can access your files from the previous year.

In short, Sage 50Cloud Accounting isn't cost-effective for small business owners.

No Mobile App

You can access your books easily since Sage is a cloud-based accounting software. You can access your company data and easily pay bills anytime, anywhere. But you’ll need a website browser to do so because Sage 50Cloud lacks a mobile app.

This can be a hassle for nomadic business owners who need to access their accounting information while away from their desks. While there are some workarounds, such as using the mobile web version of the software or using a third-party app that integrates with Sage 50, not having a dedicated mobile app can be inconvenient.

Alternative Accounting Software for Small Businesses

Despite its drawbacks, Sage 50 is still a great software, and its long-standing existence has proven that.

But Sage isn't for new business owners. Instead, we recommend this program for:

  • Companies that are equipped with accountants familiar with the software
  • Businesses who are used to having accounting programs on their desktops
  • Users who need consolidated reports and statements

Sage is not the only option out there for online businesses. In fact, many other software providers may be a better fit for your small business.

The Most User-Friendly Program: QuickBooks Online

With its clean interface and intuitive design, QuickBooks Online is stress-free to use, even for new users. And, if you need help, there are online tutorials and a live chat support to find the answers you need. QuickBooks Online is also extremely versatile, able to meet the needs of not just small business owners like you but larger companies as well.

Sage has industry-specific functionality but so does QuickBooks. In recent years, QuickBooks Online has added new features to appeal to the needs of specific sectors, including:

  • Mileage tracking for businesses that rely on vehicles
  • Batched transactions for businesses with high sales volumes
  • AI-powered automation for businesses that need help with complex accounting tasks

QuickBooks is the number one accounting tool in the tech industry, and for a good reason. It only requires minimal effort to use and provides a variety of features that you can customize to your small business. Plus, you can manage your business through a mobile app, offering more convenience to many users.

Perhaps best of all, QuickBooks connects to hundreds of third-party applications, consolidating your business's accounting needs into one centralized system. With its wide adoption and app integration, more than 1.5 million businesses use this easy-breezy program.

The Most Cost-Effective Tool: Xero

Do you know how many users Xero accounting software can accommodate? Unlimited.

One notable feature is the ability to add countless users to your account for every subscription level. This is particularly helpful for businesses that need to have multiple people accessing the account, such as a team of bookkeepers and accountants. Meanwhile, Sage only allows up to forty users for its advanced tier plan.

Other accounting software such as Sage often limit the number of users that can be added to a lower-tier subscription, which can be frustrating for businesses that need more than one user. With Xero, you can be confident that you'll be able to add as many users as you need, regardless of which subscription plan you choose.

Set Up Your Books Online With Unloop

Peachtree accounting software - Working with Unloop to organize your small online business better

Peachtree accounting software, now Sage 50Cloud, is a great option for large businesses with a team of accountants who aren't afraid of using this software. But, perhaps, many business owners are daunted by this overly sophisticated software. It may not be the best option for your small online business.

So, is there an alternative to Peachtree accounting software? The good news is that you can find a better financial program that will fit small businesses like yours. We've detailed our two favorites of the best Peachtree alternatives for you to check out.

Unloop offers cloud-based bookkeeping and accounting solutions for small businesses. With our expertise with QuickBooks and Xero and years of experience in the ecommerce business, you’ll be able to manage your business hands-free.

So if you want a change from Sage, we'll be happy to move you over and organize your business’s finances. Book a call today to learn more about our services and how we can help your business grow.

The Dirt on Peachtree Accounting Software: Is There an Alternative?
Watch Now

Owners of small businesses online must know that proper cash flow management and tracking are essential to business growth and success. And if you're using Peachtree accounting software, then you know that it can help keep your books in order. Peachtree accounting software has been around for some time. Some accountants swear by it, while others have grown tired of its many limitations.

But is this the premium accounting software you've been looking for? Is Peachtree the only software in town? What are good alternatives to this program? Keep reading to find out!

A Brief on Peachtree Complete Accounting Software

Peachtree accounting is just one option, but it's popular thanks to its robust functionality and scalability; it’s applicable for both small businesses and big corporations. Whether you're a small business owner or a freelance accountant, Peachtree can help you streamline your accounting processes.

The software includes all the basic accounting tools, like creating invoices, tracking payments, and automating financial reports. But it also goes a step further with solutions for inventory management and time tracking.

Peachtree has all functionality you need to set up for an accrual accounting system, such as accounts payable and accounts receivable. And because of its cloud-connected features, you can be sure that your accounting data will always be up-to-date.

Does Peachtree Still Exist?

Sage Software originally developed Peachtree accounting software. However, the product is now simply called Sage 50Cloud Accounting. While the name has changed, Sage 50 Accounting still offers the same robust functionality that many users loved about Peachtree.

Why You Shouldn't Get Peachtree Software for Accounting Your Finances

Sure, Sage offers the core functionalities of an accounting software. However, there are a number of reasons why you might not want to use this financial tool for your online business.

Oversaturated Interface

Sage 50 may have advanced budgeting and an eloquent system for vendor management and handling inventory, but it is not at all user-friendly.

With too many tabs and small fonts, Sage creates an oversaturated interface that is too busy, with too many colors and buttons. This can make it daunting for users to input transactions on their journal entries and general ledgers, and it’s visually overwhelming.

Experienced users can customize this software to make it less imposing. But if you’ve just recently acquired Sage 50 or you don't have any idea on how to use accounting software at all, you'll have a hard time navigating through its interface, let alone setting it up for your online business.

Overcomplicated Features

Many users find that its basic features are overly complex. One of the most common complaints is that the software is designed for accountants, not small business owners. As a result, many small business owners spend more time figuring out how to use the software than actually using it.

Cash flow, progress billing, and invoicing are all core functionality that business owners find useful. But when they attempt to utilize these solutions on Sage, they find that they’re unnecessarily broad. 

Moreover, Sage’s more advanced accounting features, such as job costing and advanced inventory management, are designed for larger businesses. As a result, small business owners with only a few employees on their payroll may find they are paying for features they will never use.

Poor Customer Support

We've covered how users may have to spend a lot of time troubleshooting errors. Unfortunately, getting assistance from Sage 50's tech support when needed is quite draining. The wait times can be long, and you may not always get the most helpful advice from the advisors. You’ll be pouring hours and hours trying to get the support you need, but there will be many times when you can’t.

Costs More Than You Think

Many small businesses choose Sage 50 for their accounting software because it's one of the best financial tools. However, one of the drawbacks of Sage 50 is that it's pricey.

You can try Sage 50 out for free for one month. But after that, you'll be charged for the subscription plan you choose. The cost of each plan will depend on the number of people who'll use this software and the features you are after.

If you choose its starter plan (Pro Accounting), you can expect to pay around $33 per month. If you need more advanced features, such as audit trails, serialized inventory tracking, or workflow management, you can expect to pay closer to $91 a month.

For many online small businesses fairly new to the industry, that's a lot of revenue to cash out.

Sage users also complain that if you're using Pro Accounting and you want to back up your files, the software requires you to make an upgrade so that you can access your files from the previous year.

In short, Sage 50Cloud Accounting isn't cost-effective for small business owners.

No Mobile App

You can access your books easily since Sage is a cloud-based accounting software. You can access your company data and easily pay bills anytime, anywhere. But you’ll need a website browser to do so because Sage 50Cloud lacks a mobile app.

This can be a hassle for nomadic business owners who need to access their accounting information while away from their desks. While there are some workarounds, such as using the mobile web version of the software or using a third-party app that integrates with Sage 50, not having a dedicated mobile app can be inconvenient.

Alternative Accounting Software for Small Businesses

Despite its drawbacks, Sage 50 is still a great software, and its long-standing existence has proven that.

But Sage isn't for new business owners. Instead, we recommend this program for:

  • Companies that are equipped with accountants familiar with the software
  • Businesses who are used to having accounting programs on their desktops
  • Users who need consolidated reports and statements

Sage is not the only option out there for online businesses. In fact, many other software providers may be a better fit for your small business.

The Most User-Friendly Program: QuickBooks Online

With its clean interface and intuitive design, QuickBooks Online is stress-free to use, even for new users. And, if you need help, there are online tutorials and a live chat support to find the answers you need. QuickBooks Online is also extremely versatile, able to meet the needs of not just small business owners like you but larger companies as well.

Sage has industry-specific functionality but so does QuickBooks. In recent years, QuickBooks Online has added new features to appeal to the needs of specific sectors, including:

  • Mileage tracking for businesses that rely on vehicles
  • Batched transactions for businesses with high sales volumes
  • AI-powered automation for businesses that need help with complex accounting tasks

QuickBooks is the number one accounting tool in the tech industry, and for a good reason. It only requires minimal effort to use and provides a variety of features that you can customize to your small business. Plus, you can manage your business through a mobile app, offering more convenience to many users.

Perhaps best of all, QuickBooks connects to hundreds of third-party applications, consolidating your business's accounting needs into one centralized system. With its wide adoption and app integration, more than 1.5 million businesses use this easy-breezy program.

The Most Cost-Effective Tool: Xero

Do you know how many users Xero accounting software can accommodate? Unlimited.

One notable feature is the ability to add countless users to your account for every subscription level. This is particularly helpful for businesses that need to have multiple people accessing the account, such as a team of bookkeepers and accountants. Meanwhile, Sage only allows up to forty users for its advanced tier plan.

Other accounting software such as Sage often limit the number of users that can be added to a lower-tier subscription, which can be frustrating for businesses that need more than one user. With Xero, you can be confident that you'll be able to add as many users as you need, regardless of which subscription plan you choose.

Set Up Your Books Online With Unloop

Peachtree accounting software - Working with Unloop to organize your small online business better

Peachtree accounting software, now Sage 50Cloud, is a great option for large businesses with a team of accountants who aren't afraid of using this software. But, perhaps, many business owners are daunted by this overly sophisticated software. It may not be the best option for your small online business.

So, is there an alternative to Peachtree accounting software? The good news is that you can find a better financial program that will fit small businesses like yours. We've detailed our two favorites of the best Peachtree alternatives for you to check out.

Unloop offers cloud-based bookkeeping and accounting solutions for small businesses. With our expertise with QuickBooks and Xero and years of experience in the ecommerce business, you’ll be able to manage your business hands-free.

So if you want a change from Sage, we'll be happy to move you over and organize your business’s finances. Book a call today to learn more about our services and how we can help your business grow.

Read more

As a business owner, one of the most important tasks you'll face is determining how to collect and remit sales tax. For new business owners using Shopify as their ecommerce platform, it's important to understand how Shopify handles sales tax collection and remittance. 

We understand that if you're new to Shopify, or ecommerce in general, you may be wondering if Shopify collects sales tax on your behalf. You will be better able to decide what is best for your company and its taxes if you fully appreciate and recognize these ideas.

This blog post will provide an overview of Shopify sales tax policy and answer some common questions about sales tax for Shopify app users. 

Why is it necessary for companies to gather sales tax?

Sales tax is a fee levied on the acquisition of interests and services. Businesses are in charge of obtaining sales tax from clients and sending it to the appropriate authorities. In the United States, the sales tax rate is governed by state and local laws, which means that rates and rules can vary depending on where you do business.

For enterprises that market taxable interests or services, collecting sales tax is an important part of complying with the law. Remitting sales tax to the government ensures that businesses are contributing their fair share to the funding of public services. Sales tax also levels the playing field between brick-and-mortar businesses and online sellers, who might otherwise have an unfair advantage.

If you're a store owner, it's important to understand your obligations with respect to sales tax. The good news is that there are many tools at your disposal to assist you in navigating the complexity of sales tax law. With a little bit of research and planning, you can ensure that your business is compliant with all sales tax requirements.

Does Shopify automatically collect sales tax?

You won't have your sales tax collected by Shopify. Shopify is not obligated to handle your sales tax collection and remittance. Even if you are a retailer located in the U.S. or Canada, Shopify will not automatically compute, remit, and organize sales tax on your behalf.

This is due to the fact that, unlike Amazon, eBay, and Walmart, Shopify is not a marketplace facilitator. These websites facilitate the transactions between sellers and customers who compete for business using the same store front.

It’s a downer that Shopify doesn't collect or handle your sales tax. Nevertheless, you may connect a tax app with your business and modify Shopify's settings to ensure that each qualified transaction automatically adds the right sales tax rate at checkout.

does shopify collect sales tax - unloop - woman in ecommerce

What about those outside the U.S. and Canada? 

Tax registrations for the following regions are used to establish taxes:

  • New Zealand
  • European Union
  • Norway
  • United Kingdom
  • Australia
  • Switzerland

These regions follow the same process as merchants from the U.S. and Canada. On the other hand, depending on your local tax rules, taxes are imposed at the national or regional level if you are not headquartered in one of these regions and you need to levy taxes.

Where can I learn more about Shopify’s sales tax collection?

If you're a small business owner using Shopify, you may be wondering how to handle sales tax collection. In general, you must charge and collect sales tax from customers in any state where you have "nexus," defined as having a physical presence in a state such as a store or a warehouse. 

If you have nexus in a state, you'll need to register with the state's taxation department and obtain a sales tax permit. After you've acquired your authorization, you may begin collecting sales tax from consumers in that jurisdiction.

Some business owners make the mistake of thinking that they only need to collect sales tax from customers in their own state. However, this is not the case. If you have nexus in another state, you must also collect sales tax from customers in that state. As a result, it's critical to keep your knowledge up to date on the states where you have nexus so that you may properly collect sales tax.

Fortunately, Shopify makes it simple to collect and pay sales tax. You may include the appropriate taxes for each state where you have nexus with Shopify's built-in Sales Tax settings. On the Taxes and duties tab in your Shopify admin, you may access and check your settings as you set up taxes.

Where can business owners learn more?

You must be aware of sales tax laws if you're selling anything online. You might need to gather and pay sales tax on the goods you sell depending on where you live. But don't worry—Shopify can help simplify the process for you. 

does shopify collect sales tax - unloop - shopify homepage

First, go to your Shopify settings and navigate the "Taxes" page. From there, you can enter your location, and Shopify will automatically calculate the appropriate sales taxes for your area.

So if you're ever wondering, "Where can I find more information about Shopify and sales tax collection?" just head over to Shopify's website—they've got everything you need to get started.

Commonly Asked Questions

How do I configure sales tax in Shopify?

Select the applicable tax location by going to Settings > Taxes. Integrating a tax app with Shopify can help you make sure you are collecting the necessary amounts for each state if you are selling in the U.S. across numerous states.

Is a sales tax license required in order to sell on Shopify?

Before you may collect and send sales tax to Shopify, you must apply for a sales tax permit. Locate the states that are part of your nexus and register there. Then you may modify your store's settings to charge sales tax on your purchases.

Does Shopify levy a VAT fee?

If you conduct business with the UK or Europe, you must also review the VAT and sales tax regulations in each region. They will each have their own criteria and tax software that can assist you in determining the appropriate charges to make and payments to make.

Conclusion

Fortunately, Shopify has a great support team that can help you with any questions. They also provide helpful guides that explain the fundamentals of sales tax on their website. 

Therefore, if you're thinking about beginning a business on Shopify, do your study on sales tax before you launch. Although it's not as difficult as it seems, you must first grasp the fundamentals before you can begin selling. It's critical for business owners to grasp the fundamentals of sales tax. This way, you can ensure you are collecting and paying taxes correctly. 

There are a few other things business owners should know about Shopify and sales tax collection, which we cover in our other blogs. Unloop is here to assist you with your taxes and other financial issues. 

Don't be afraid to seek outside assistance if you need it, but don't sell yourself short. Concentrate on what you ought to be doing—managing your small business—and book a call with us today!

Does Shopify Collect Sales Tax? A Guide for New Business Owners on Shopify
Watch Now

As a business owner, one of the most important tasks you'll face is determining how to collect and remit sales tax. For new business owners using Shopify as their ecommerce platform, it's important to understand how Shopify handles sales tax collection and remittance. 

We understand that if you're new to Shopify, or ecommerce in general, you may be wondering if Shopify collects sales tax on your behalf. You will be better able to decide what is best for your company and its taxes if you fully appreciate and recognize these ideas.

This blog post will provide an overview of Shopify sales tax policy and answer some common questions about sales tax for Shopify app users. 

Why is it necessary for companies to gather sales tax?

Sales tax is a fee levied on the acquisition of interests and services. Businesses are in charge of obtaining sales tax from clients and sending it to the appropriate authorities. In the United States, the sales tax rate is governed by state and local laws, which means that rates and rules can vary depending on where you do business.

For enterprises that market taxable interests or services, collecting sales tax is an important part of complying with the law. Remitting sales tax to the government ensures that businesses are contributing their fair share to the funding of public services. Sales tax also levels the playing field between brick-and-mortar businesses and online sellers, who might otherwise have an unfair advantage.

If you're a store owner, it's important to understand your obligations with respect to sales tax. The good news is that there are many tools at your disposal to assist you in navigating the complexity of sales tax law. With a little bit of research and planning, you can ensure that your business is compliant with all sales tax requirements.

Does Shopify automatically collect sales tax?

You won't have your sales tax collected by Shopify. Shopify is not obligated to handle your sales tax collection and remittance. Even if you are a retailer located in the U.S. or Canada, Shopify will not automatically compute, remit, and organize sales tax on your behalf.

This is due to the fact that, unlike Amazon, eBay, and Walmart, Shopify is not a marketplace facilitator. These websites facilitate the transactions between sellers and customers who compete for business using the same store front.

It’s a downer that Shopify doesn't collect or handle your sales tax. Nevertheless, you may connect a tax app with your business and modify Shopify's settings to ensure that each qualified transaction automatically adds the right sales tax rate at checkout.

does shopify collect sales tax - unloop - woman in ecommerce

What about those outside the U.S. and Canada? 

Tax registrations for the following regions are used to establish taxes:

  • New Zealand
  • European Union
  • Norway
  • United Kingdom
  • Australia
  • Switzerland

These regions follow the same process as merchants from the U.S. and Canada. On the other hand, depending on your local tax rules, taxes are imposed at the national or regional level if you are not headquartered in one of these regions and you need to levy taxes.

Where can I learn more about Shopify’s sales tax collection?

If you're a small business owner using Shopify, you may be wondering how to handle sales tax collection. In general, you must charge and collect sales tax from customers in any state where you have "nexus," defined as having a physical presence in a state such as a store or a warehouse. 

If you have nexus in a state, you'll need to register with the state's taxation department and obtain a sales tax permit. After you've acquired your authorization, you may begin collecting sales tax from consumers in that jurisdiction.

Some business owners make the mistake of thinking that they only need to collect sales tax from customers in their own state. However, this is not the case. If you have nexus in another state, you must also collect sales tax from customers in that state. As a result, it's critical to keep your knowledge up to date on the states where you have nexus so that you may properly collect sales tax.

Fortunately, Shopify makes it simple to collect and pay sales tax. You may include the appropriate taxes for each state where you have nexus with Shopify's built-in Sales Tax settings. On the Taxes and duties tab in your Shopify admin, you may access and check your settings as you set up taxes.

Where can business owners learn more?

You must be aware of sales tax laws if you're selling anything online. You might need to gather and pay sales tax on the goods you sell depending on where you live. But don't worry—Shopify can help simplify the process for you. 

does shopify collect sales tax - unloop - shopify homepage

First, go to your Shopify settings and navigate the "Taxes" page. From there, you can enter your location, and Shopify will automatically calculate the appropriate sales taxes for your area.

So if you're ever wondering, "Where can I find more information about Shopify and sales tax collection?" just head over to Shopify's website—they've got everything you need to get started.

Commonly Asked Questions

How do I configure sales tax in Shopify?

Select the applicable tax location by going to Settings > Taxes. Integrating a tax app with Shopify can help you make sure you are collecting the necessary amounts for each state if you are selling in the U.S. across numerous states.

Is a sales tax license required in order to sell on Shopify?

Before you may collect and send sales tax to Shopify, you must apply for a sales tax permit. Locate the states that are part of your nexus and register there. Then you may modify your store's settings to charge sales tax on your purchases.

Does Shopify levy a VAT fee?

If you conduct business with the UK or Europe, you must also review the VAT and sales tax regulations in each region. They will each have their own criteria and tax software that can assist you in determining the appropriate charges to make and payments to make.

Conclusion

Fortunately, Shopify has a great support team that can help you with any questions. They also provide helpful guides that explain the fundamentals of sales tax on their website. 

Therefore, if you're thinking about beginning a business on Shopify, do your study on sales tax before you launch. Although it's not as difficult as it seems, you must first grasp the fundamentals before you can begin selling. It's critical for business owners to grasp the fundamentals of sales tax. This way, you can ensure you are collecting and paying taxes correctly. 

There are a few other things business owners should know about Shopify and sales tax collection, which we cover in our other blogs. Unloop is here to assist you with your taxes and other financial issues. 

Don't be afraid to seek outside assistance if you need it, but don't sell yourself short. Concentrate on what you ought to be doing—managing your small business—and book a call with us today!

Read more

Starting a business is a risk. However, it is exciting and it might be tempting to swim ahead into new waters in an attempt to achieve success. Unfortunately, small business owners will have a million things to do. The process of creating a product to sell is only one facet of a business. There's finances, marketing, and advertising, and business owners only have themselves to rely on most of the time. 

You often need a second set of hands to help you run a business. Moreover, if there are areas of the business that you're not familiar with, getting an expert may be a wise move for your success. But many business owners are reluctant to hire professionals because of the cost. o you really need one? 

Here are some important questions to ask yourself to help you decide if you need a professional accountant. 

1. Can I handle my own accounting for a small business?

If you're a certified accountant, managing your business finances will be easy. But let's say you're a beginner in the ecommerce industry. Can you do the accounting by yourself? Assess how much you know about accounting and how sure you are that you can handle your finances efficiently and error-free. 

When you encounter double-entry bookkeeping, income statements, cash flows, accounts payable and receivable, and fixed expenses, can you differentiate and identify their purposes? Business finance covers many things, so make sure you can handle whatever applies to your business if you opt not to hire a professional. 

2. Can I dedicate time out of my day for accounting? 

If accounting for small businesses fits in your skill set, the next thing you need to ask yourself is if you can dedicate time to manage your finances. As a business owner, you have to oversee the different parts of your business, and business owners often get heavily involved in different processes of their business

Tasks like talking and striking deals with your suppliers, picking up goods from warehouses, fulfilling deliveries, meetings with potential partners, managing your business webpage, and answering messages about your products are just a few of the jobs you must complete daily—especially if you work alone.

After all these tasks, can you still see yourself managing your finances? Finances require accuracy and complete concentration. After a tiring day, are you still up to the task?

accountant assessing data 

3. What do I know about taxes? 

Handling finances also means managing your taxes. Even seasoned people in the business dread managing taxes. There are many taxes levied when you start a business, and different taxes require different declarations and forms. How well-versed are you when it comes to business taxation? 

Do you know how to file income taxes? How about sales tax? Do you know the sales tax rate and laws? Do you know how sales tax collection works? You should also be familiar with filing due dates, depending if you file taxes annually or quarterly. 

Furthermore, there are also tax exemptions. Do you know the laws that make your products eligible for exemption? Tax exemption can lessen the taxes you pay to the collection agency. You can allocate these funds to further develop your business through investments. 

4. Can I afford to hire professional accountants? 

Professional accountants do have a standard rate. It may vary depending on whether you hire from accounting firms or look for a private accountant. Of course, the more experience the accountant has, the higher they will charge. 

Budget is one of the factors why many business owners opt to forgo hiring professionals. On average, an accountant's hourly rate is $117. Other services like small business bookkeeping cost an average of $200. Research shows that business owners spend anywhere from $1,000 to $20,000 on accounting annually. 

This price point may be daunting for individuals fresh on the market. One thing you can do is hire accountants in a part-time position. This way, you'll still get the help you need without breaking your budget. You can create a schedule when you need your accountant, instead of having them on-call five days a week. 

5. Do I need other services instead? 

It's easier to handle finances at the beginning of your business. But maybe you need help in other things like organizing and keeping your records clean. An accountant is distinct from a bookkeeper. A bookkeeper does not need to pass state-mandated licensing examinations or a professional accounting degree.

Bookkeepers are trained to organize and record your business’s cash flow. They record all the financial transactions so you can track the money that goes in and out of your business. In addition, they can produce financial statements and reports which can say a lot about the health of your industry. 

They can provide you with balance sheets to see if your expenses are parallel with your sales so that you can plan your finances strategically. In addition, bookkeeping costs significantly less than accounting, and there are even automated bookkeeping software that won’t break the bank. 

However, bookkeepers can't do what accountants do. Their main goal is to record all your financial transactions; it is an accountant's duty to interpret and analyze the data. So maybe once a month or every quarter, have your bookkeeper meet a professional accountant for a consultation. 

6. What are the roles of an accountant in a small business? 

Bookkeeping for small businesses is an advantage, but a bookkeeper’s role is limited to your cash flow—no more, no less. So what difference does a certified accountant make? Here are some of the crucial duties a qualified accountant has to perform for your business. 

  • The accountant ensures that all financial documents are accurate and comply with tax laws and possible changes. 
  • Accountants are primarily responsible for managing your business's taxes. They make calculations to ensure you pay the right tax and file it on schedule to avoid penalties.
  • Accountants can assess your financial data. With this, they can give you tips to further your business growth, and they can identify potential issues and give you solutions to help you strategize. 
  • Accountants can do business forecasting, which is useful for planning. They can also do risk assessments, cost reductions, revenue development, and income maximization. 
professional accountant checking statement 

Final Thoughts 

Ask yourselves again, “Do I need an accountant for my small business?” It's not a requirement for every business, but it's a huge advantage. At the beginning, hiring an accountant may seem unnecessary. But as your business grows and a lot of cash comes in and out, an accountant will make sense of all the financial data to make sure your business’s overall financial health is in order. 

If you’re considering getting an accountant, Unloop offers the best services for ecommerce sellers. We have professionals that can help you navigate different aspects of your business. Our services include payroll management, income tax, sales tax, accounting, and bookkeeping. 

Book a call with us now and consult with our experts. Let us help you carve your way to success.

Business Inquiry: Do I Need an Accountant for My Small Business?
Watch Now

Starting a business is a risk. However, it is exciting and it might be tempting to swim ahead into new waters in an attempt to achieve success. Unfortunately, small business owners will have a million things to do. The process of creating a product to sell is only one facet of a business. There's finances, marketing, and advertising, and business owners only have themselves to rely on most of the time. 

You often need a second set of hands to help you run a business. Moreover, if there are areas of the business that you're not familiar with, getting an expert may be a wise move for your success. But many business owners are reluctant to hire professionals because of the cost. o you really need one? 

Here are some important questions to ask yourself to help you decide if you need a professional accountant. 

1. Can I handle my own accounting for a small business?

If you're a certified accountant, managing your business finances will be easy. But let's say you're a beginner in the ecommerce industry. Can you do the accounting by yourself? Assess how much you know about accounting and how sure you are that you can handle your finances efficiently and error-free. 

When you encounter double-entry bookkeeping, income statements, cash flows, accounts payable and receivable, and fixed expenses, can you differentiate and identify their purposes? Business finance covers many things, so make sure you can handle whatever applies to your business if you opt not to hire a professional. 

2. Can I dedicate time out of my day for accounting? 

If accounting for small businesses fits in your skill set, the next thing you need to ask yourself is if you can dedicate time to manage your finances. As a business owner, you have to oversee the different parts of your business, and business owners often get heavily involved in different processes of their business

Tasks like talking and striking deals with your suppliers, picking up goods from warehouses, fulfilling deliveries, meetings with potential partners, managing your business webpage, and answering messages about your products are just a few of the jobs you must complete daily—especially if you work alone.

After all these tasks, can you still see yourself managing your finances? Finances require accuracy and complete concentration. After a tiring day, are you still up to the task?

accountant assessing data 

3. What do I know about taxes? 

Handling finances also means managing your taxes. Even seasoned people in the business dread managing taxes. There are many taxes levied when you start a business, and different taxes require different declarations and forms. How well-versed are you when it comes to business taxation? 

Do you know how to file income taxes? How about sales tax? Do you know the sales tax rate and laws? Do you know how sales tax collection works? You should also be familiar with filing due dates, depending if you file taxes annually or quarterly. 

Furthermore, there are also tax exemptions. Do you know the laws that make your products eligible for exemption? Tax exemption can lessen the taxes you pay to the collection agency. You can allocate these funds to further develop your business through investments. 

4. Can I afford to hire professional accountants? 

Professional accountants do have a standard rate. It may vary depending on whether you hire from accounting firms or look for a private accountant. Of course, the more experience the accountant has, the higher they will charge. 

Budget is one of the factors why many business owners opt to forgo hiring professionals. On average, an accountant's hourly rate is $117. Other services like small business bookkeeping cost an average of $200. Research shows that business owners spend anywhere from $1,000 to $20,000 on accounting annually. 

This price point may be daunting for individuals fresh on the market. One thing you can do is hire accountants in a part-time position. This way, you'll still get the help you need without breaking your budget. You can create a schedule when you need your accountant, instead of having them on-call five days a week. 

5. Do I need other services instead? 

It's easier to handle finances at the beginning of your business. But maybe you need help in other things like organizing and keeping your records clean. An accountant is distinct from a bookkeeper. A bookkeeper does not need to pass state-mandated licensing examinations or a professional accounting degree.

Bookkeepers are trained to organize and record your business’s cash flow. They record all the financial transactions so you can track the money that goes in and out of your business. In addition, they can produce financial statements and reports which can say a lot about the health of your industry. 

They can provide you with balance sheets to see if your expenses are parallel with your sales so that you can plan your finances strategically. In addition, bookkeeping costs significantly less than accounting, and there are even automated bookkeeping software that won’t break the bank. 

However, bookkeepers can't do what accountants do. Their main goal is to record all your financial transactions; it is an accountant's duty to interpret and analyze the data. So maybe once a month or every quarter, have your bookkeeper meet a professional accountant for a consultation. 

6. What are the roles of an accountant in a small business? 

Bookkeeping for small businesses is an advantage, but a bookkeeper’s role is limited to your cash flow—no more, no less. So what difference does a certified accountant make? Here are some of the crucial duties a qualified accountant has to perform for your business. 

  • The accountant ensures that all financial documents are accurate and comply with tax laws and possible changes. 
  • Accountants are primarily responsible for managing your business's taxes. They make calculations to ensure you pay the right tax and file it on schedule to avoid penalties.
  • Accountants can assess your financial data. With this, they can give you tips to further your business growth, and they can identify potential issues and give you solutions to help you strategize. 
  • Accountants can do business forecasting, which is useful for planning. They can also do risk assessments, cost reductions, revenue development, and income maximization. 
professional accountant checking statement 

Final Thoughts 

Ask yourselves again, “Do I need an accountant for my small business?” It's not a requirement for every business, but it's a huge advantage. At the beginning, hiring an accountant may seem unnecessary. But as your business grows and a lot of cash comes in and out, an accountant will make sense of all the financial data to make sure your business’s overall financial health is in order. 

If you’re considering getting an accountant, Unloop offers the best services for ecommerce sellers. We have professionals that can help you navigate different aspects of your business. Our services include payroll management, income tax, sales tax, accounting, and bookkeeping. 

Book a call with us now and consult with our experts. Let us help you carve your way to success.

Read more

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

You finally have a store on Amazon and have started selling. Congratulations! You're in for a treat. Not only is selling on Amazon a great way to make some serious cash, but it's also a great way to learn about sales tax. That's right, sales tax. While it may not be the most exciting subject, understanding sales tax is essential for any Amazon seller. After all, you are responsible for collecting and remitting sales tax on your Amazon sales if you're a third-party merchant. But don't worry, understanding sales tax is not as difficult as it may seem.

There are plenty of pros to understanding sales tax. For one, you will avoid potential penalties and interest charges in the event you mistakenly fail to collect or remit sales tax. Additionally, you will be able to accurately calculate your taxes owed, which will help you stay organized and efficient come tax time. Understanding sales tax may not be the most exciting part of selling on Amazon, but it is important. So take some time to learn about it and enjoy the benefits of being a knowledgeable seller. It could save you a lot of time (and costs) in the long run!

Does Amazon Charge Sales Tax?

Amazon collects sales tax on "Fulfilled by Amazon" products sold by merchants to customers in states where the seller has a nexus (presence or location, such as a warehouse). Therefore, they collect and remit tax on behalf of their Amazon FBA sellers in almost every state. Note that Amazon only takes into account where the inventory is currently located.

However, a third-party Amazon seller must set up their own tax accounting system to keep up with the regulations and filing dates.

In short, if Amazon fulfills your products, you don't need to worry about sales taxes, but that comes with its cons, such as an increase in returns due to Amazon's return policy.

Marketplace Tax Collection on Amazon

Now it gets tricky! Amazon is not responsible for the sales tax obligations of third-party merchants. But new legislation passed called the Marketplace Facilitator transfers the sales tax collection and remittance obligations of state sales tax from third-party sellers to Amazon.

Amazon is now responsible for collecting, calculating, remitting, and refunding state sales tax for where the products are going, which contrasts with a sales tax nexus. Here's a list of states where this legislation is in effect:

AlabamaAlaskaArizonaArkansas
CaliforniaColoradoConnecticutDistrict of Columbia
FloridaGeorgiaHawaiiIllinois
IndianaIowaKansasKentucky
LouisianaMaineMarylandMassachusetts
MichiganMinnesotaMississippiNebraska
NevadaNew JerseyNew MexicoNew York
North CarolinaNorth DakotaOhioOklahoma
PennsylvaniaPuerto RicoRhode IslandSouth Carolina
South DakotaTennesseeTexasUtah
VermontVirginiaWashingtonWest Virginia
WisconsinWyoming

What is a Sales Tax Nexus?

The sales tax nexus is where a business operates, not the location of the buyer or where the product is going. For example, if a seller maintains physical locations in several states, such as offices or in-store retail shops, the seller must know each state's tax regulations.

Amazon also offers its own Sales Tax Calculator to help sellers determine the appropriate sales tax rate to charge their customers. Not only does Amazon collect sales tax based on location, but they also take into account the type of product or service you're selling.

The Different Types of Sales Taxes That May Apply to Your Business on Amazon.com

There are a few things to keep in mind when dealing with Amazon sales tax. First, you need to be aware of the different types of sales tax that may apply to your business, such as state and local taxes or county taxes. You will also need to understand how each product code is taxed in these places.

State and Local Taxes

The first thing to understand is that each jurisdiction has its own sales tax laws. Therefore, you will need to research the specific sales tax laws for the state or states you are doing business in. Also, some localities within a state may have their own sales tax laws. For instance, the city of Seattle has a local sales tax of 3.75% combined with Washington’s state sales tax of 6.50%, for a total sales tax of 10.25%.

County Taxes

One thing to bear in mind when dealing with Amazon sales tax is that some jurisdictions charge their taxes in addition to state and local taxes. These fees, which can range from 0.5% to 2%, are generally added on top of state and local sales taxes. Furthermore, certain counties may have different rules regarding sales tax collection.

Another factor to consider is how different products are taxed. For example, you may be selling goods, digital content, or services, such as streaming movies or consulting services.

Sales Tax on Goods

There are several things to consider regarding sales tax on goods sold on Amazon. First, you need to know the rates that apply to different products in your state or locality.

In addition, it’s important to know that some items may be exempt from sales tax collection altogether. These include items like food and certain types of clothing. However, these exemptions can vary, so you must do your research to ensure that you are correctly charging sales tax on all of your products with the right product tax code. 

You can find this information on Seller Central.

amazon sales tax - people shopping online

How to Maximize Your Profits and Minimize Potential Issues With the Tax Authorities When Selling on Amazon

One of your main goals should be to maximize your profits while minimizing potential issues with the tax collection authorities. There are several key steps that you can take to achieve these goals, such as carefully reviewing the tax laws for your state or locality and familiarizing yourself with the different types of taxes that may apply to your products or services. 

Additionally, it is important to keep accurate records of all of your sales and purchases to ensure that you are correctly calculating and remitting any taxes that may be due.

Unloop Your Worries!

As you can see, there are varieties of Amazon sales tax that may apply to your business. You need to be aware of these taxes and how they impact your bottom line to stay tax compliant and avoid hefty charges. Suppose you need help sorting through this complex information or want advice on the best way to manage your sales tax obligations. In this case, Unloop offers excellent bookkeeping services for small businesses. So unloop, take a breather, and give us a call at 877-421-7270 if you want to learn how to grow your business with comprehensive accounting.

The Basics of Amazon Sales Tax for Merchants: What You Need to Know
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Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

You finally have a store on Amazon and have started selling. Congratulations! You're in for a treat. Not only is selling on Amazon a great way to make some serious cash, but it's also a great way to learn about sales tax. That's right, sales tax. While it may not be the most exciting subject, understanding sales tax is essential for any Amazon seller. After all, you are responsible for collecting and remitting sales tax on your Amazon sales if you're a third-party merchant. But don't worry, understanding sales tax is not as difficult as it may seem.

There are plenty of pros to understanding sales tax. For one, you will avoid potential penalties and interest charges in the event you mistakenly fail to collect or remit sales tax. Additionally, you will be able to accurately calculate your taxes owed, which will help you stay organized and efficient come tax time. Understanding sales tax may not be the most exciting part of selling on Amazon, but it is important. So take some time to learn about it and enjoy the benefits of being a knowledgeable seller. It could save you a lot of time (and costs) in the long run!

Does Amazon Charge Sales Tax?

Amazon collects sales tax on "Fulfilled by Amazon" products sold by merchants to customers in states where the seller has a nexus (presence or location, such as a warehouse). Therefore, they collect and remit tax on behalf of their Amazon FBA sellers in almost every state. Note that Amazon only takes into account where the inventory is currently located.

However, a third-party Amazon seller must set up their own tax accounting system to keep up with the regulations and filing dates.

In short, if Amazon fulfills your products, you don't need to worry about sales taxes, but that comes with its cons, such as an increase in returns due to Amazon's return policy.

Marketplace Tax Collection on Amazon

Now it gets tricky! Amazon is not responsible for the sales tax obligations of third-party merchants. But new legislation passed called the Marketplace Facilitator transfers the sales tax collection and remittance obligations of state sales tax from third-party sellers to Amazon.

Amazon is now responsible for collecting, calculating, remitting, and refunding state sales tax for where the products are going, which contrasts with a sales tax nexus. Here's a list of states where this legislation is in effect:

AlabamaAlaskaArizonaArkansas
CaliforniaColoradoConnecticutDistrict of Columbia
FloridaGeorgiaHawaiiIllinois
IndianaIowaKansasKentucky
LouisianaMaineMarylandMassachusetts
MichiganMinnesotaMississippiNebraska
NevadaNew JerseyNew MexicoNew York
North CarolinaNorth DakotaOhioOklahoma
PennsylvaniaPuerto RicoRhode IslandSouth Carolina
South DakotaTennesseeTexasUtah
VermontVirginiaWashingtonWest Virginia
WisconsinWyoming

What is a Sales Tax Nexus?

The sales tax nexus is where a business operates, not the location of the buyer or where the product is going. For example, if a seller maintains physical locations in several states, such as offices or in-store retail shops, the seller must know each state's tax regulations.

Amazon also offers its own Sales Tax Calculator to help sellers determine the appropriate sales tax rate to charge their customers. Not only does Amazon collect sales tax based on location, but they also take into account the type of product or service you're selling.

The Different Types of Sales Taxes That May Apply to Your Business on Amazon.com

There are a few things to keep in mind when dealing with Amazon sales tax. First, you need to be aware of the different types of sales tax that may apply to your business, such as state and local taxes or county taxes. You will also need to understand how each product code is taxed in these places.

State and Local Taxes

The first thing to understand is that each jurisdiction has its own sales tax laws. Therefore, you will need to research the specific sales tax laws for the state or states you are doing business in. Also, some localities within a state may have their own sales tax laws. For instance, the city of Seattle has a local sales tax of 3.75% combined with Washington’s state sales tax of 6.50%, for a total sales tax of 10.25%.

County Taxes

One thing to bear in mind when dealing with Amazon sales tax is that some jurisdictions charge their taxes in addition to state and local taxes. These fees, which can range from 0.5% to 2%, are generally added on top of state and local sales taxes. Furthermore, certain counties may have different rules regarding sales tax collection.

Another factor to consider is how different products are taxed. For example, you may be selling goods, digital content, or services, such as streaming movies or consulting services.

Sales Tax on Goods

There are several things to consider regarding sales tax on goods sold on Amazon. First, you need to know the rates that apply to different products in your state or locality.

In addition, it’s important to know that some items may be exempt from sales tax collection altogether. These include items like food and certain types of clothing. However, these exemptions can vary, so you must do your research to ensure that you are correctly charging sales tax on all of your products with the right product tax code. 

You can find this information on Seller Central.

amazon sales tax - people shopping online

How to Maximize Your Profits and Minimize Potential Issues With the Tax Authorities When Selling on Amazon

One of your main goals should be to maximize your profits while minimizing potential issues with the tax collection authorities. There are several key steps that you can take to achieve these goals, such as carefully reviewing the tax laws for your state or locality and familiarizing yourself with the different types of taxes that may apply to your products or services. 

Additionally, it is important to keep accurate records of all of your sales and purchases to ensure that you are correctly calculating and remitting any taxes that may be due.

Unloop Your Worries!

As you can see, there are varieties of Amazon sales tax that may apply to your business. You need to be aware of these taxes and how they impact your bottom line to stay tax compliant and avoid hefty charges. Suppose you need help sorting through this complex information or want advice on the best way to manage your sales tax obligations. In this case, Unloop offers excellent bookkeeping services for small businesses. So unloop, take a breather, and give us a call at 877-421-7270 if you want to learn how to grow your business with comprehensive accounting.

Read more

Disclaimer: Please note that this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

Running an online business is hard. A lot of that has to do with the fact that many ecommerce business owners are trying to do everything themselves—things like bookkeeping, marketing, customer service, and more. But do you know that over 60% of online small businesses fail in the first few years? 

Ecommerce startups and small business owners have probably heard about accounting tools that would greatly improve how they handle their finances. One of the better and more popular accounting software is QuickBooks by Intuit. 

Online businesses use this financial software mainly because it's easy to use and well-supported. QuickBooks software has plenty of features that will benefit you in every part of your business, and this article will show you how you can effectively drive your ecommerce business to the top.

Top Cases of QuickBooks for Small Businesses 

QuickBooks' advanced features make your investment in the software worth every single penny. But here are the most popular use cases when using QuickBooks for small businesses.

Tracking Your Bills and Expenses 

QuickBooks has a way of monitoring your cash flows automatically by adding your transactions and connecting your credit cards and bank accounts. 

Do you have plenty of paper overflowing your work desk? You don't have to type in every receipt of your business expenses. Instead, it has built-in scanning features to sort and organize cash outflows. 

If you have dozens of upcoming payments, QuickBooks not only keeps a record but also reminds you of your unpaid bills. 

Printing Your Financial Statements 

In accounting, there are five main financial statements needed to be presented to oversee the performance of your business. Therefore, it is best if you make these statements in this order:

  • Income Statement (also known as Profit and Loss Report): Shows how much you gain or lose in a certain period, such as within the month, the quarter, or year.
  • Balance Sheet: Gives you an overview of your business's financial health within a month, a quarter, or a year. This statement uses the most vital formula in accounting, Assets = Liabilities + Equity. 

Tip: Before preparing a balance sheet, new business owners should wait for a year or a full-accounting cycle since there's still not much to report about in the first few months. To have an in-depth comparison of your historical, current, and projected date, you need to have at least a year’s worth of data. 

  • Statement of Owner's Equity: Shows the changes made in equity or capital at the beginning of the business. A typical SOE is a one-page statement, so it's the shortest among all five financial statements. 

As an owner, have you made additional contributions of, let's say $10,000 to kick off your business? Or perhaps, you withdrew $5,000 because of an emergency. 

Hence, the Statement of Changes in Owner's Equity is another term for this statement because owner transactions from the capital are tracked. 

  • Cash Flow Statement: Summarizes the flow of cash circulating in your small business. Is there more money going in or coming out? For instance, a cash inflow (increase in cash) is sales, while a cash outflow (decrease in cash) is employee salaries. Since this statement monitors cash flow, it provides cash-based information and not accrual-based information. 
  • Note to Financial Statements: Has more words than numbers as it discloses the important information about certain transactions and accounting policies your business follows. Take this as a commentary statement or footnote that will help you prepare the other financial statements. 

You're thinking that you're only starting a business. But, big or small, a business owner must know its financial health to make sound and informed decisions. 

As of this article, QuickBooks can create three out of the five financial statements: the income statement, balance sheet, and statement of cash flows. 

To prepare the first two mentioned statements, head to QuickBooks, go to Reports, then Business Overview. Then select Profit and Loss Balance Sheets. Clicking on the Recommended tab will let you view the statement faster. But if you want details about your statements, click on the All Reports tab. Lastly, click Run to open the chosen financial statement. 

Preparing your cash flow statement will depend on your accounting method. Do you record at the time of the sale (accrual accounting) or when your customer pays (cash basis accounting)? You can customize your cash flow statements through the Report Settings in the Reports tab. 

Asides from these important statements, QuickBooks can also summarize the following statements:

  • General Ledger Report 
  • Banking Reports 
  • Customer, Job, and Sales Reports 
  • Inventory Report
  • Vendor Report 
  • List Report
  • Payroll and Employee Report
  • Budgeting and Forecasting Report 
  • Accounting and Tax Report 

Simplifying Your Tax Calculations 

Calculating your tax returns is a huge challenge for many business owners, both newbies, and veterans alike. QuickBooks can compile your tax return based on your net income, the difference between your total income and total expenses. Then, it will automatically provide the data you need for doing your tax returns. 

QuickBooks can provide more accurate sales taxes if you provide the necessary details, such as your country's type of taxes, product or service's tax category, and shipping location. 

Accepting Online Payments From Your Customers 

One of QuickBooks' online features is that customers can pay you online. It has integrated third-party payment apps such as Paypal, but it also has a built-in tool called QuickBooks Payments, which you can use to send an electronic invoice to your customers. 

A businesswoman using QuickBooks on her mobile

Best Versions of QuickBooks for Small Businesses in Ecommerce

Since its initial launch, QuickBooks has scaled up and dispersed into different versions to fit every type of business out there, especially ecommerce businesses. Here are the best ones. 

QuickBooks Online 

QuickBooks Online (QBO) operates on the Cloud, which works for nomadic entrepreneurs or people who don't want extra hardware setup or software installation costs. Instead, you can access your books by using the QuickBooks mobile app downloadable in the app store. 

QBO has four subscription plans readily available: 

  • Simple Start
  • Essentials
  • Plus
  • Advanced

All of them offer services for online retailers and business owners to manage their books hassle-free. You can integrate your website with QuickBooks since most ecommerce platforms such as Shopify allow integration and access to QBO.

The biggest advantage you can get from QBO is checking your business no matter where you go or where you are. In addition, you don't have to worry about its security issues as it provides a unique ID to access your business. 

QuickBooks Pro 

If you spend more time on an office desk, you will enjoy QuickBook Pro's features. This QuickBooks version is one of the three accounting software for desktops or PCs. 

Despite its limited accessibility and backup, it has in-depth payroll management and more features than QuickBooks Online. Moreover, if you aren't confident about QBO's safety features, QuickBooks Pro is potentially more secure for your ecommerce business. 

QuickBooks Premier 

QuickBooks Premier is the second QuickBooks desktop that offers more functions than QuickBooks Pro. These are just some of the functions it offers:

  • Forecasting for your online budgeting and sales
  • Features for specific industries such as online professional services, retail, etc. 
  • Reversing journal entry options

QuickBooks Premier is a great tool for growing online businesses because it has tailored-fit reports for the type of industry your online business is in. You can predict your profitability by tracking your largest sources of income.

QuickBooks for Self-Employed 

Third-party service providers such as freelancers or real estate agents can now use QuickBooks. This QuickBooks version is also cloud-based and available on your mobile phone.

What sets it apart from QBO or QuickBooks Desktop is it offers to track your business expenses and personal finance and create tax automation. However, you can't upgrade it to any other versions. So if you have goals of expanding your remote workforce or ecommerce business, this won't work for you in the long run. 

QuickBooks for Mac 

QuickBooks Pro, Premier, and Enterprise are developed for Windows users. On the other hand, QuickBooks Mac is designed for online business owners who use Apple computers. 

It has similar features to the QBO and Desktop versions but is ideally suited for QuickBooks small business users on Macs. 

A business owner learning and discussing the financials of his business with an accountant using QuickBooks

The Secret Recipe: Quickbooks + an Unloop Accountant 

QuickBooks has made accounting much simpler to deal with amidst the grind of running a small business. This accounting software may be user-friendly and versatile, but effectively connecting your small business to QuickBooks starts with a proper setup. Thus, one of the biggest drawbacks to investing in QuickBooks is that you'll have to learn how to use this advanced accounting tool. 

So if you have just installed QuickBooks recently and don't know how to maximize it, you might just end up with an expensive piece of junk software.

The success of your business all comes from utilizing your tools optimally. Unloop will help you boom with our accounting experts, such as financial consultants or accountants who are well-aware and skilled in integrating QuickBooks to any size of ecommerce business. 
To enhance your ecommerce, get QuickBooks and call Unloop today!

Quickbooks for Small Businesses: An Owners' Recipe to Success
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Disclaimer: Please note that this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

Running an online business is hard. A lot of that has to do with the fact that many ecommerce business owners are trying to do everything themselves—things like bookkeeping, marketing, customer service, and more. But do you know that over 60% of online small businesses fail in the first few years? 

Ecommerce startups and small business owners have probably heard about accounting tools that would greatly improve how they handle their finances. One of the better and more popular accounting software is QuickBooks by Intuit. 

Online businesses use this financial software mainly because it's easy to use and well-supported. QuickBooks software has plenty of features that will benefit you in every part of your business, and this article will show you how you can effectively drive your ecommerce business to the top.

Top Cases of QuickBooks for Small Businesses 

QuickBooks' advanced features make your investment in the software worth every single penny. But here are the most popular use cases when using QuickBooks for small businesses.

Tracking Your Bills and Expenses 

QuickBooks has a way of monitoring your cash flows automatically by adding your transactions and connecting your credit cards and bank accounts. 

Do you have plenty of paper overflowing your work desk? You don't have to type in every receipt of your business expenses. Instead, it has built-in scanning features to sort and organize cash outflows. 

If you have dozens of upcoming payments, QuickBooks not only keeps a record but also reminds you of your unpaid bills. 

Printing Your Financial Statements 

In accounting, there are five main financial statements needed to be presented to oversee the performance of your business. Therefore, it is best if you make these statements in this order:

  • Income Statement (also known as Profit and Loss Report): Shows how much you gain or lose in a certain period, such as within the month, the quarter, or year.
  • Balance Sheet: Gives you an overview of your business's financial health within a month, a quarter, or a year. This statement uses the most vital formula in accounting, Assets = Liabilities + Equity. 

Tip: Before preparing a balance sheet, new business owners should wait for a year or a full-accounting cycle since there's still not much to report about in the first few months. To have an in-depth comparison of your historical, current, and projected date, you need to have at least a year’s worth of data. 

  • Statement of Owner's Equity: Shows the changes made in equity or capital at the beginning of the business. A typical SOE is a one-page statement, so it's the shortest among all five financial statements. 

As an owner, have you made additional contributions of, let's say $10,000 to kick off your business? Or perhaps, you withdrew $5,000 because of an emergency. 

Hence, the Statement of Changes in Owner's Equity is another term for this statement because owner transactions from the capital are tracked. 

  • Cash Flow Statement: Summarizes the flow of cash circulating in your small business. Is there more money going in or coming out? For instance, a cash inflow (increase in cash) is sales, while a cash outflow (decrease in cash) is employee salaries. Since this statement monitors cash flow, it provides cash-based information and not accrual-based information. 
  • Note to Financial Statements: Has more words than numbers as it discloses the important information about certain transactions and accounting policies your business follows. Take this as a commentary statement or footnote that will help you prepare the other financial statements. 

You're thinking that you're only starting a business. But, big or small, a business owner must know its financial health to make sound and informed decisions. 

As of this article, QuickBooks can create three out of the five financial statements: the income statement, balance sheet, and statement of cash flows. 

To prepare the first two mentioned statements, head to QuickBooks, go to Reports, then Business Overview. Then select Profit and Loss Balance Sheets. Clicking on the Recommended tab will let you view the statement faster. But if you want details about your statements, click on the All Reports tab. Lastly, click Run to open the chosen financial statement. 

Preparing your cash flow statement will depend on your accounting method. Do you record at the time of the sale (accrual accounting) or when your customer pays (cash basis accounting)? You can customize your cash flow statements through the Report Settings in the Reports tab. 

Asides from these important statements, QuickBooks can also summarize the following statements:

  • General Ledger Report 
  • Banking Reports 
  • Customer, Job, and Sales Reports 
  • Inventory Report
  • Vendor Report 
  • List Report
  • Payroll and Employee Report
  • Budgeting and Forecasting Report 
  • Accounting and Tax Report 

Simplifying Your Tax Calculations 

Calculating your tax returns is a huge challenge for many business owners, both newbies, and veterans alike. QuickBooks can compile your tax return based on your net income, the difference between your total income and total expenses. Then, it will automatically provide the data you need for doing your tax returns. 

QuickBooks can provide more accurate sales taxes if you provide the necessary details, such as your country's type of taxes, product or service's tax category, and shipping location. 

Accepting Online Payments From Your Customers 

One of QuickBooks' online features is that customers can pay you online. It has integrated third-party payment apps such as Paypal, but it also has a built-in tool called QuickBooks Payments, which you can use to send an electronic invoice to your customers. 

A businesswoman using QuickBooks on her mobile

Best Versions of QuickBooks for Small Businesses in Ecommerce

Since its initial launch, QuickBooks has scaled up and dispersed into different versions to fit every type of business out there, especially ecommerce businesses. Here are the best ones. 

QuickBooks Online 

QuickBooks Online (QBO) operates on the Cloud, which works for nomadic entrepreneurs or people who don't want extra hardware setup or software installation costs. Instead, you can access your books by using the QuickBooks mobile app downloadable in the app store. 

QBO has four subscription plans readily available: 

  • Simple Start
  • Essentials
  • Plus
  • Advanced

All of them offer services for online retailers and business owners to manage their books hassle-free. You can integrate your website with QuickBooks since most ecommerce platforms such as Shopify allow integration and access to QBO.

The biggest advantage you can get from QBO is checking your business no matter where you go or where you are. In addition, you don't have to worry about its security issues as it provides a unique ID to access your business. 

QuickBooks Pro 

If you spend more time on an office desk, you will enjoy QuickBook Pro's features. This QuickBooks version is one of the three accounting software for desktops or PCs. 

Despite its limited accessibility and backup, it has in-depth payroll management and more features than QuickBooks Online. Moreover, if you aren't confident about QBO's safety features, QuickBooks Pro is potentially more secure for your ecommerce business. 

QuickBooks Premier 

QuickBooks Premier is the second QuickBooks desktop that offers more functions than QuickBooks Pro. These are just some of the functions it offers:

  • Forecasting for your online budgeting and sales
  • Features for specific industries such as online professional services, retail, etc. 
  • Reversing journal entry options

QuickBooks Premier is a great tool for growing online businesses because it has tailored-fit reports for the type of industry your online business is in. You can predict your profitability by tracking your largest sources of income.

QuickBooks for Self-Employed 

Third-party service providers such as freelancers or real estate agents can now use QuickBooks. This QuickBooks version is also cloud-based and available on your mobile phone.

What sets it apart from QBO or QuickBooks Desktop is it offers to track your business expenses and personal finance and create tax automation. However, you can't upgrade it to any other versions. So if you have goals of expanding your remote workforce or ecommerce business, this won't work for you in the long run. 

QuickBooks for Mac 

QuickBooks Pro, Premier, and Enterprise are developed for Windows users. On the other hand, QuickBooks Mac is designed for online business owners who use Apple computers. 

It has similar features to the QBO and Desktop versions but is ideally suited for QuickBooks small business users on Macs. 

A business owner learning and discussing the financials of his business with an accountant using QuickBooks

The Secret Recipe: Quickbooks + an Unloop Accountant 

QuickBooks has made accounting much simpler to deal with amidst the grind of running a small business. This accounting software may be user-friendly and versatile, but effectively connecting your small business to QuickBooks starts with a proper setup. Thus, one of the biggest drawbacks to investing in QuickBooks is that you'll have to learn how to use this advanced accounting tool. 

So if you have just installed QuickBooks recently and don't know how to maximize it, you might just end up with an expensive piece of junk software.

The success of your business all comes from utilizing your tools optimally. Unloop will help you boom with our accounting experts, such as financial consultants or accountants who are well-aware and skilled in integrating QuickBooks to any size of ecommerce business. 
To enhance your ecommerce, get QuickBooks and call Unloop today!

Read more

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

The revenue from e-commerce retail sales in Canada has seen an upward trend since 2017. According to Statista, from $21.975 billion in 2017, it rose to $32.442 billion in 2021. The data company forecasts this upward trend to continue until 2025, with predicted revenue of $40.352 billion. 

Behind these numbers are millions of eCommerce sellers like you who have ventured into the industry and opened businesses to fellow Canadians and clients worldwide. If you have just begun selling online, you have plenty of tasks on your plate, but one thing you should prioritize is taxation. 

Let us help you make your workload lighter by providing you with knowledge about Canada's online sales tax for businesses.

The Different Taxes Paid in Canada

To avoid getting lost, familiarize yourself with the different terms for Canadian taxes. You need to remember four: Goods and Services Tax (GST), Provincial Sales Tax (PST), Harmonized Sales Tax (HST), and Quebec Sales Tax (QST). 

Let’s check their definitions one by one. 

GST

GST is Canada’s federal tax applied to almost all products sold in physical stores and online. Only those tagged as zero-rate are exempted from this taxation. 

Prepare to charge this sales tax if your buyers are from Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Saskatchewan, Quebec, and Yukon. All these provinces have GST either independently or together with PST or QST. 

GST sales tax is at 5%, and the rate will still increase when PST or QST is added. 

PST

As the name suggests, this is the additional tax imposed by provinces like British Columbia, Manitoba, and Saskatchewan. The tax rate varies per province.

  • British Columbia: 7%
  • Manitoba: 7%
  • Saskatchewan: 6%

So when computing the sales tax, adding the 5% GST to the given PST rates results in the following final rates:

  • British Columbia: 12%
  • Manitoba: 12%
  • Saskatchewan: 11%

An example transaction goes like this: let’s say you sold a pair of rubber shoes at $29.99 to a customer living in British Columbia. For this sale, you have to charge a 12% sales tax. 

$29.99 × 0.12 = $3.60

Collect the $3.60 sales tax, and remit it during tax season. 

HST

To skip the hassle of computing federal and provincial taxes separately, lawmakers have passed the harmonization of the two through HST. Five provinces, namely, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island, follow this taxation system, and the rates vary per province.

  • New Brunswick, Newfoundland and Labrador, and Ontario at 13%
  • Nova Scotia at 15%
  • Prince Edward Island at 14%

When you make sales from these provinces, you do not need to look for the GST and PST rates; simply apply the HST rate. 

QST

In Quebec, the sales tax consists of the GST and QST, with the QST at 9.975% and GST still at 5%. However, you do not have to remit QST if you satisfy any of the following conditions: 

  • You sell real estate property.
  • You are a small supplier.
  • You are not a resident of Quebec.
  • You do not have a physical store in the province.

For instance, a nonresident supplier operates in Ontario and does not have a physical store in Quebec. However, they supply to Quebec businesses. In this case, the only tax they should charge the customers is the 5% GST. On the other hand, for individual orders delivered to Quebec residents, sellers need to charge both GST and QST. 

ecommerce sales tax solutions

Canada Ecommerce Sales Tax: Important Reminders

Did the different sales tax classifications confuse you? Here are some reminders to help you know how much to pass onto your client or whether to charge them at all. Also, get to know the department where you need to submit the sales tax you collected.

Check the customer's province to know what sales tax rate applies.

The first step is to determine the buyer’s address. Remember that the basis of sales tax is not where the package came from but where it is going. For instance, an order coming from Ontario will be delivered to a customer in Manitoba. The sales tax rate to follow is Manitoba’s 12% sales tax rate. 

Familiarize yourself with tax specifics for provinces using GST + PST.

The standard procedure in British Columbia, Manitoba, and Saskatchewan is that orders sent to residents of these provinces should be taxed accordingly. However, specific rules on who should pay taxes and who are exempted differ. If you deliver in these locations, it is best to get into the specifics of the local tax regulations.

Know if the goods you sell are tax-exempt.

While almost all goods have sales tax and some individuals have to pay additional tax for their purchases, some products are zero-rated. These are the goods you can buy without paying any sales tax.

  • Essential grocery items like milk and bread
  • Agricultural products like fruits and vegetables
  • Prescription medicine and medical equipment
  • Farm livestock
  • Fishery produce

These specific groups are also not required to pay sales taxes.

  • Goods providers with less than $30,000 annual revenue
  • Indigenous people
  • Diplomats
  • Foreigners using Canada-bought products abroad

If you sell these goods or to these groups, remember not to apply sales tax. 

Understand the importance of a tax exemption certificate. 

For individual orders, it is clear that sales tax is based on the location of the buyer. But what if you are a raw materials manufacturer and sell not to end users but to product developers? Should you also charge sales tax to your customers? 

The levels of resales are a common scenario in the production of goods. A resale certificate will save the business buying your raw materials from paying sales tax as they are not the end user of the final product. 

Online sellers are not exempt from paying taxes.

In Canada, Internet sales tax regulations state that online sellers are required to charge sales tax on their orders. With that, there is no confusion about whether you should be collecting taxes from your buyers or not. Regardless if you’re selling in a mall, a stand-alone boutique, or online, sales tax applies if you made a taxable sale to a Canadian customer. 

However, as mentioned earlier, it’s best to know the specific ecommerce sales tax rules per province to understand and abide by them correctly. 

Know where and how to pay your taxes.

In Canada, you should be familiar with these two offices to pay your taxes: Revenu Quebec for the province of Quebec and the Canadian Revenue Agency (CRA) for the rest of the country. 

These two offices implement tax laws and handle all tax-related transactions, from income tax, value-added tax, and excise tax to sales tax. After collecting the sales tax, you need to remit all the sales tax you collected to these agencies. 

Image alt: ecommerce sales tax rules

Steps in Managing Your Sales Tax

Everyone says taxation is a complicated task, but it is relatively easy when done right. Here are the steps to guide you. 

Step #1: Determine where your customer’s location is.

Included in your order slips’ delivery details is the specific location where you need to send the package. Use this information to determine the applicable sales tax rate.

Step #2: Compute and collect sales tax.

Apply the sales tax rate according to the package’s destination, and collect the tax charged. Make sure not to spend these taxes for your business as you need to remit them to the government.

Step #3: Remit sales tax to the CRA.

Set the frequency of sales tax remittance with the CRA. You can send the collected sales tax on a monthly, quarterly, or annual basis either physically or online. 

How to Make Sales Tax Collection Easier

You can do your sales tax on your own if you are still beginning your business, but can you imagine the increase in the workload when your sales boom? Ecommerce sales tax solutions make your business processes more efficient and lessen your work. Here are some of them!

Automate everything.

Rely on sales tax software like QuickBooks, Xero, A2X, and Hubdoc. They collate sales transaction details and compute sales tax per order. They also store all transactions in the system, so you can run reports to check how much sales tax you’ve collected and other key performance indicators that will help you in decision-making. 

Hire a bookkeeper.

Doing the bookkeeping yourself is still manageable at the beginning of your business. Still, you need to delegate this complex task to a trained bookkeeper to ensure the proper tracking and categorization of all transactions. 

You can also be sure of data accuracy because one team member focuses on this task only. Meanwhile, you can focus on business operations, product quality checks, and customer service with more free time.

Get accounting assistance.

Taxation is an essential task that can determine your business's success or failure, especially if you do not know how it works. Thus, it is best to have someone well-versed in tax laws and regulations—an ecommerce sales tax accountant. 

Your accountant will check your sales tax compliance and create reports from the information gathered by the bookkeeper. Let them take care of tax management and payment on your business too. 

ecommerce sales tax accountant

Work with Unloop

As a business owner, you are now one of the millions of Canadian ecommerce sellers contributing to the growth of the industry in the country and worldwide. Thus, you should know that the Canadian government requires all physical and digital businesses to charge sales tax on their products. 

Depending on the province or territory you send the orders to, different tax rates may apply. To avoid fines for not complying with these regulations, it’s essential to know precisely what types of taxes apply where and how to remit them on time.

We at Unloop offer bookkeeping business solutions. Our team of experienced bookkeepers will help you track and prepare your sales tax information before tax season. Delegate the task to us so that you can focus on scaling your business. 

Give us a call now at 877-421-7270. We’d love to hear from you!

The Ins and Outs of Canadian Ecommerce Sales Tax: Must-Know Details for Beginners
Watch Now

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

The revenue from e-commerce retail sales in Canada has seen an upward trend since 2017. According to Statista, from $21.975 billion in 2017, it rose to $32.442 billion in 2021. The data company forecasts this upward trend to continue until 2025, with predicted revenue of $40.352 billion. 

Behind these numbers are millions of eCommerce sellers like you who have ventured into the industry and opened businesses to fellow Canadians and clients worldwide. If you have just begun selling online, you have plenty of tasks on your plate, but one thing you should prioritize is taxation. 

Let us help you make your workload lighter by providing you with knowledge about Canada's online sales tax for businesses.

The Different Taxes Paid in Canada

To avoid getting lost, familiarize yourself with the different terms for Canadian taxes. You need to remember four: Goods and Services Tax (GST), Provincial Sales Tax (PST), Harmonized Sales Tax (HST), and Quebec Sales Tax (QST). 

Let’s check their definitions one by one. 

GST

GST is Canada’s federal tax applied to almost all products sold in physical stores and online. Only those tagged as zero-rate are exempted from this taxation. 

Prepare to charge this sales tax if your buyers are from Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Saskatchewan, Quebec, and Yukon. All these provinces have GST either independently or together with PST or QST. 

GST sales tax is at 5%, and the rate will still increase when PST or QST is added. 

PST

As the name suggests, this is the additional tax imposed by provinces like British Columbia, Manitoba, and Saskatchewan. The tax rate varies per province.

  • British Columbia: 7%
  • Manitoba: 7%
  • Saskatchewan: 6%

So when computing the sales tax, adding the 5% GST to the given PST rates results in the following final rates:

  • British Columbia: 12%
  • Manitoba: 12%
  • Saskatchewan: 11%

An example transaction goes like this: let’s say you sold a pair of rubber shoes at $29.99 to a customer living in British Columbia. For this sale, you have to charge a 12% sales tax. 

$29.99 × 0.12 = $3.60

Collect the $3.60 sales tax, and remit it during tax season. 

HST

To skip the hassle of computing federal and provincial taxes separately, lawmakers have passed the harmonization of the two through HST. Five provinces, namely, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island, follow this taxation system, and the rates vary per province.

  • New Brunswick, Newfoundland and Labrador, and Ontario at 13%
  • Nova Scotia at 15%
  • Prince Edward Island at 14%

When you make sales from these provinces, you do not need to look for the GST and PST rates; simply apply the HST rate. 

QST

In Quebec, the sales tax consists of the GST and QST, with the QST at 9.975% and GST still at 5%. However, you do not have to remit QST if you satisfy any of the following conditions: 

  • You sell real estate property.
  • You are a small supplier.
  • You are not a resident of Quebec.
  • You do not have a physical store in the province.

For instance, a nonresident supplier operates in Ontario and does not have a physical store in Quebec. However, they supply to Quebec businesses. In this case, the only tax they should charge the customers is the 5% GST. On the other hand, for individual orders delivered to Quebec residents, sellers need to charge both GST and QST. 

ecommerce sales tax solutions

Canada Ecommerce Sales Tax: Important Reminders

Did the different sales tax classifications confuse you? Here are some reminders to help you know how much to pass onto your client or whether to charge them at all. Also, get to know the department where you need to submit the sales tax you collected.

Check the customer's province to know what sales tax rate applies.

The first step is to determine the buyer’s address. Remember that the basis of sales tax is not where the package came from but where it is going. For instance, an order coming from Ontario will be delivered to a customer in Manitoba. The sales tax rate to follow is Manitoba’s 12% sales tax rate. 

Familiarize yourself with tax specifics for provinces using GST + PST.

The standard procedure in British Columbia, Manitoba, and Saskatchewan is that orders sent to residents of these provinces should be taxed accordingly. However, specific rules on who should pay taxes and who are exempted differ. If you deliver in these locations, it is best to get into the specifics of the local tax regulations.

Know if the goods you sell are tax-exempt.

While almost all goods have sales tax and some individuals have to pay additional tax for their purchases, some products are zero-rated. These are the goods you can buy without paying any sales tax.

  • Essential grocery items like milk and bread
  • Agricultural products like fruits and vegetables
  • Prescription medicine and medical equipment
  • Farm livestock
  • Fishery produce

These specific groups are also not required to pay sales taxes.

  • Goods providers with less than $30,000 annual revenue
  • Indigenous people
  • Diplomats
  • Foreigners using Canada-bought products abroad

If you sell these goods or to these groups, remember not to apply sales tax. 

Understand the importance of a tax exemption certificate. 

For individual orders, it is clear that sales tax is based on the location of the buyer. But what if you are a raw materials manufacturer and sell not to end users but to product developers? Should you also charge sales tax to your customers? 

The levels of resales are a common scenario in the production of goods. A resale certificate will save the business buying your raw materials from paying sales tax as they are not the end user of the final product. 

Online sellers are not exempt from paying taxes.

In Canada, Internet sales tax regulations state that online sellers are required to charge sales tax on their orders. With that, there is no confusion about whether you should be collecting taxes from your buyers or not. Regardless if you’re selling in a mall, a stand-alone boutique, or online, sales tax applies if you made a taxable sale to a Canadian customer. 

However, as mentioned earlier, it’s best to know the specific ecommerce sales tax rules per province to understand and abide by them correctly. 

Know where and how to pay your taxes.

In Canada, you should be familiar with these two offices to pay your taxes: Revenu Quebec for the province of Quebec and the Canadian Revenue Agency (CRA) for the rest of the country. 

These two offices implement tax laws and handle all tax-related transactions, from income tax, value-added tax, and excise tax to sales tax. After collecting the sales tax, you need to remit all the sales tax you collected to these agencies. 

Image alt: ecommerce sales tax rules

Steps in Managing Your Sales Tax

Everyone says taxation is a complicated task, but it is relatively easy when done right. Here are the steps to guide you. 

Step #1: Determine where your customer’s location is.

Included in your order slips’ delivery details is the specific location where you need to send the package. Use this information to determine the applicable sales tax rate.

Step #2: Compute and collect sales tax.

Apply the sales tax rate according to the package’s destination, and collect the tax charged. Make sure not to spend these taxes for your business as you need to remit them to the government.

Step #3: Remit sales tax to the CRA.

Set the frequency of sales tax remittance with the CRA. You can send the collected sales tax on a monthly, quarterly, or annual basis either physically or online. 

How to Make Sales Tax Collection Easier

You can do your sales tax on your own if you are still beginning your business, but can you imagine the increase in the workload when your sales boom? Ecommerce sales tax solutions make your business processes more efficient and lessen your work. Here are some of them!

Automate everything.

Rely on sales tax software like QuickBooks, Xero, A2X, and Hubdoc. They collate sales transaction details and compute sales tax per order. They also store all transactions in the system, so you can run reports to check how much sales tax you’ve collected and other key performance indicators that will help you in decision-making. 

Hire a bookkeeper.

Doing the bookkeeping yourself is still manageable at the beginning of your business. Still, you need to delegate this complex task to a trained bookkeeper to ensure the proper tracking and categorization of all transactions. 

You can also be sure of data accuracy because one team member focuses on this task only. Meanwhile, you can focus on business operations, product quality checks, and customer service with more free time.

Get accounting assistance.

Taxation is an essential task that can determine your business's success or failure, especially if you do not know how it works. Thus, it is best to have someone well-versed in tax laws and regulations—an ecommerce sales tax accountant. 

Your accountant will check your sales tax compliance and create reports from the information gathered by the bookkeeper. Let them take care of tax management and payment on your business too. 

ecommerce sales tax accountant

Work with Unloop

As a business owner, you are now one of the millions of Canadian ecommerce sellers contributing to the growth of the industry in the country and worldwide. Thus, you should know that the Canadian government requires all physical and digital businesses to charge sales tax on their products. 

Depending on the province or territory you send the orders to, different tax rates may apply. To avoid fines for not complying with these regulations, it’s essential to know precisely what types of taxes apply where and how to remit them on time.

We at Unloop offer bookkeeping business solutions. Our team of experienced bookkeepers will help you track and prepare your sales tax information before tax season. Delegate the task to us so that you can focus on scaling your business. 

Give us a call now at 877-421-7270. We’d love to hear from you!

Read more

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

You decided to join Shopify and wonder what makes an e-commerce business successful in a massive marketplace. You've heard incredible success stories here and there, but you also know that it doesn't just happen to anyone. 

Most sellers who fail to do so or are inexperienced would only focus on implementing effective strategies. Of course, that's not wrong and is a much-needed aspect of a business. However, there's another overlooked aspect: financial management. 

You can have the best e-commerce strategy, but things will not work without a good cash flow. It's the core point of it all. Therefore, as you begin your journey as a Shopify seller, you must first build a well-rounded bookkeeping and accounting system. Then, you can focus on other important aspects, such as digital marketing strategies. 

If you're still lost in all of this Shopify accounting fuss, take a seat and allow us to guide you with the dos and don'ts of e-commerce accounting in detail. Understand how transactions work on the platform, find good accounting software, look for mistakes to avoid, and take note of accounting tips that work.

Refresher: Why Bookkeeping and Accounting are Important in Ecommerce

In case you're not convinced enough as to why bookkeeping and accounting are as important (or more) than your e-commerce strategy, we've enumerated the reasons why. Before that, here's a quick refresher on the difference between bookkeeping and accounting.

versus black red

Bookkeeping vs. Accounting

Bookkeeping and accounting can be confusing because their tasks are associated with each other. In addition, some sources would even use them interchangeably. As a result, most people would think they have a similar meaning. 

However, it's important to know that there's a significant difference between the two. It's a crucial point in your decision-making when managing your Shopify accounting

Bookkeeping records and manages financial data. Examples include account reconciliation, organizing transactions, maintaining balance sheets, income statements, and cash flow statements. 

Meanwhile, accounting focuses on analyzing collected data to ensure the good financial health of a business. Examples include tax compliance planning, Shopify accounting reports and auditing, and forecasting future costs.

Why Do They Matter to an E-commerce Business?

Now that we're clear with the difference, let's hear the reasons why they matter greatly to your online business.

  • Healthy financial management helps you know where you stand and what areas you still need to work on.
  • You can keep track of all important transactions associated with your business cash flow, such as inventory, expenses, revenue, liabilities, sales tax, assets, and equity.
  • Bookkeeping has the key factors you need to build a reliable business model. 
  • You can avoid delayed or incorrect payments that can hurt your bank account. 

Without the ability to track these accurately, your business could end up in immeasurable heaps of trouble. Of course, no company wants to fail, but those who do often lack focus and management skills in the financial aspect. 

Moreover, e-commerce accounting is different from offline management, which makes it a lot more complicated. 

  • E-commerce doesn't follow fixed "open hours." The transactions keep coming at any time of the day. 
  • Customers come from different parts of the globe, complicating calculations and bank transactions such as taxes and currencies. 
  • A small inventory or system error can cause a negative domino effect on your financial records.
  • Platforms like Shopify don't provide everything you need to know about your transactions, such as different shipping costs or returns. 

It's for these reasons that you need to meticulously work on the bookkeeping and accounting aspects of your e-commerce business. 

Accounting Do's for Shopify Sellers

Now that you understand the essence of financial management in e-commerce, let's move on to the core part of this article: how to do Shopify e-commerce accounting. Start by finding the right tools to kickstart your accounting duties.

#1: Find the Right Accounting Software and Shopify Tools

The wide range of accounting software and tools on Shopify might be overwhelming. Avoid making the wrong choices and save time and money with this guide. 

Why Do Shopify Sellers Need Accounting Software?

Growing an e-commerce business means working on massive data. Since you're extending your reach to various regions, states, and countries, you will take in more and more transactions. Accounting software offers cloud-based and automated technology, making financial management easier and less error-prone. 

Accounting software allows the seller to:

  • Keep updated and accurate records.
  • Access important information anytime and on any device (with an internet connection).
  • Avoid the exhausting manual input and calculation.
  • Control the access levels of your team members.
  • Integrate various apps or tools to maximize the optimization of your books.
businesswoman analyzing online accounting data

What Is The Best Accounting Software for Shopify?

Experts and most e-commerce sellers usually recommend QuickBooks, Sage, and NetSuite for Shopify. Here's what you need to know about these programs.

QuickBooks

QuickBooks is a popular choice for Shopify sellers because it's easy to learn and has advanced features for accounting. You get a user-friendly dashboard for quick references and in-depth accounting reports. In addition, there are customizable options for invoice templates and reports. What's more is that you can integrate multiple apps within and outside of their product range. 

Sage

Sage incorporates time-saving and industry-specific features. It is a top provider in the UK, but sellers from across the globe can use it. The platform includes an automatic transaction matching system and uses AI to remember your data selections. In addition, it provides in-depth financial reports and has a nice interface too. 

NetSuite

NetSuite is relatively more expensive than the two. It's an enterprise resource planning system that allows you to automate financial transactions such as orders, billing, and inventory management. Forms, records, and workflows are customizable with industry-specific options. NetSuite is a good choice for large businesses with a complex accounting system. 

What Are Other Shopify Apps You Can Use For Accounting?

Your accounting software must be the primary tool for all your bookkeeping and accounting tasks. However, you may also add other Shopify tools to maximize seamless accounting for your business. Check out these free and simple tools.

  • Profit Margin Calculator - Use this tool if you're having trouble with selling prices and ensure to save money and increase profitability.
  • Cost-Per-Mile (CPM) Calculator - Use this tool to help you with advertising campaign costs. It calculates cost-per-mile/thousand impressions of one thousand views of your ad.
  • Discount Calculator - This tool is handy if you're planning to use a discount code for a special offer or sale and want to find out how much money you'll save. 

How to Choose Among Accounting Tools and Apps?

You can only pick the right accounting software if you've identified your business needs. Before you look into these tools, analyze your business status first. What's the current financial situation? What do you need right now to improve, and what are your plans? Will you introduce new products? Will you switch to omnichannel marketing? 

Setting your knowledge and expectations of your business will help determine which features you're going to look for in software. In addition, think of the bigger picture and seek long-term solutions. 

#2: Stay Updated With Your Books

Keep your books up-to-date to make way for accurate business decisions. You must always have correct financial information to avoid discrepancies in the long run. Do this on a weekly to monthly basis. 

Moreover, include basic financial transactions and reports, such as profit and loss statements, cash flows, inventory forecast, and balance sheets. All these details will help you make a better evaluation, forecasting of costs, and budgeting decisions. 

#3: Implement Security Measures

A report states that organizations lose 5% of revenue every year due to fraud. The main reasons are that businesses aren't careful enough when hiring someone or don't have effective security systems to prevent incidents like this. Moreover, it takes a lot of time and effort to recover the stolen finances, and most companies fail to do so. 

Ensure to keep a close eye on vital financial information. Fortunately, accounting software gives you control over who can access a certain file, such as bank accounts or bank statement reconciliations. Therefore, you can prevent or minimize the risk of fraud with the right tools and meticulous hiring processes.

#4: Learn Your Sales Taxes and Comply

Since the South Dakota v. Wayfair, Inc. decision in 2018, online retailers were required to pay sales taxes in the states they're associated with. The current system is very extensive and confusing, especially if you're not yet familiar with it. Each country, state, and even local areas have different sales tax rates that you have to be aware of.

Tax compliance is a significant part of a seller's obligations, so you must not overlook it. Learn about your associated locations' tax rates and rules in advance and seek effective solutions to comply with them. You can always ask the help of an accounting team to help you with your e-commerce sales taxes.

Alt tag: businesswoman shocked at online data image

Accounting Don'ts for Shopify Sellers

To maximize your preventive measures on accounting for Shopify sales, you must also know what mistakes to avoid. People learn from mistakes, but you don't have to make it yourself to understand. 

Common Accounting Mistakes on Shopify

Some things never change. Unfortunately, many Shopify sellers still make these mistakes despite warnings and clarifications. Naturally, you wouldn't want to be a part of that, so learn from these errors before making them yourself.

#1 Little to No Accounting System

First off, many sellers do not have an accounting system in the first place. They think that the Shopify dashboard and the little data from their account balance will do all the work. Unfortunately, that can only cost you huge financial losses in the long run. 

You can't properly evaluate and organize your finances without an accounting system. You have to track and record all transactions, assets, liabilities, and other expenses. Missing one of these can result in incorrect compliance and creation of your statements. If you're serious about growing your business, do yourself a favor and build a good foundation from the start. 

#2 Understating Shopify Deposits

Inexperienced sellers would record all deposits entirely to the Sales category. This creates some issues because tracking them needs some classification. Aside from sales, deposits also include discounts, returns, account fees, shipping income, and sales taxes. You have to code each batch to the correct categories for proper tracking purposes. 

Additionally, some sellers record sales in the wrong timeline. For example, one batch might belong to the previous month, but you included them in the current month instead. It becomes difficult to manage, and you're going to screw up your monthly sales data. 

#3: Mixing Personal and Business Financial Activities

You should learn how to put a clear line between personal and business matters. In the financial aspect, this is very crucial. Unfortunately, most start-ups or companies with few employees make this mistake often, leading to inaccurate business data and improper compliance. 

Some examples are using the wrong bank account for a certain transaction or the same Shopify account for personal and business books. These only put you at risk of financial trouble, so avoid merging the two matters as much as possible. Learn to keep the right records to the correct places. 

#4: Individual Recording of Shopify Sales

If you are switching to automated software, don't expect it to handle all transactions effortlessly. While there is truth in what the tools are capable of from that statement, one thing you should know is that it doesn't work on excessive volumes. Just like you, the software can get overwhelmed, too.

If you're running up to thousands of transactions regularly, it can be difficult and time-consuming to reconcile them. This is why instead of one-by-one, you should post your Shopify sales data in summary form and incorporate a cloud system to house it. 

Start Shopify Bookkeeping and Accounting Right With Unloop!

Bookkeeping and accounting might not be the main reasons why you wanted to join Shopify at first. Instead, you're thrilled to implement digital marketing strategies and expand your customer base to a global scale. However, you must also understand that bookkeeping and accounting are the foundations of a profitable business.

Regardless of whether you like Shopify bookkeeping and accounting or not, you have to do your books properly. Think of it as a long-term preventive measure. Don't make e-commerce harder than it already is. Do everything you can to make the work easier and 100% accurate. 

If you feel this will take up too much of your time, you can work with the Unloop Team to manage your books. Our services include bookkeeping, sales tax, and income tax (together with our partner accounting firms) for Shopify, Amazon, and multichannel sellers. Moreover, we use the best accounting tools like QuickBooks Online, TaxJar, and A2X. Gear up for a seamless accounting on Shopify today.

Where to Start With Shopify Accounting: An Inclusive Guide to the Dos and Don'ts
Watch Now

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

You decided to join Shopify and wonder what makes an e-commerce business successful in a massive marketplace. You've heard incredible success stories here and there, but you also know that it doesn't just happen to anyone. 

Most sellers who fail to do so or are inexperienced would only focus on implementing effective strategies. Of course, that's not wrong and is a much-needed aspect of a business. However, there's another overlooked aspect: financial management. 

You can have the best e-commerce strategy, but things will not work without a good cash flow. It's the core point of it all. Therefore, as you begin your journey as a Shopify seller, you must first build a well-rounded bookkeeping and accounting system. Then, you can focus on other important aspects, such as digital marketing strategies. 

If you're still lost in all of this Shopify accounting fuss, take a seat and allow us to guide you with the dos and don'ts of e-commerce accounting in detail. Understand how transactions work on the platform, find good accounting software, look for mistakes to avoid, and take note of accounting tips that work.

Refresher: Why Bookkeeping and Accounting are Important in Ecommerce

In case you're not convinced enough as to why bookkeeping and accounting are as important (or more) than your e-commerce strategy, we've enumerated the reasons why. Before that, here's a quick refresher on the difference between bookkeeping and accounting.

versus black red

Bookkeeping vs. Accounting

Bookkeeping and accounting can be confusing because their tasks are associated with each other. In addition, some sources would even use them interchangeably. As a result, most people would think they have a similar meaning. 

However, it's important to know that there's a significant difference between the two. It's a crucial point in your decision-making when managing your Shopify accounting

Bookkeeping records and manages financial data. Examples include account reconciliation, organizing transactions, maintaining balance sheets, income statements, and cash flow statements. 

Meanwhile, accounting focuses on analyzing collected data to ensure the good financial health of a business. Examples include tax compliance planning, Shopify accounting reports and auditing, and forecasting future costs.

Why Do They Matter to an E-commerce Business?

Now that we're clear with the difference, let's hear the reasons why they matter greatly to your online business.

  • Healthy financial management helps you know where you stand and what areas you still need to work on.
  • You can keep track of all important transactions associated with your business cash flow, such as inventory, expenses, revenue, liabilities, sales tax, assets, and equity.
  • Bookkeeping has the key factors you need to build a reliable business model. 
  • You can avoid delayed or incorrect payments that can hurt your bank account. 

Without the ability to track these accurately, your business could end up in immeasurable heaps of trouble. Of course, no company wants to fail, but those who do often lack focus and management skills in the financial aspect. 

Moreover, e-commerce accounting is different from offline management, which makes it a lot more complicated. 

  • E-commerce doesn't follow fixed "open hours." The transactions keep coming at any time of the day. 
  • Customers come from different parts of the globe, complicating calculations and bank transactions such as taxes and currencies. 
  • A small inventory or system error can cause a negative domino effect on your financial records.
  • Platforms like Shopify don't provide everything you need to know about your transactions, such as different shipping costs or returns. 

It's for these reasons that you need to meticulously work on the bookkeeping and accounting aspects of your e-commerce business. 

Accounting Do's for Shopify Sellers

Now that you understand the essence of financial management in e-commerce, let's move on to the core part of this article: how to do Shopify e-commerce accounting. Start by finding the right tools to kickstart your accounting duties.

#1: Find the Right Accounting Software and Shopify Tools

The wide range of accounting software and tools on Shopify might be overwhelming. Avoid making the wrong choices and save time and money with this guide. 

Why Do Shopify Sellers Need Accounting Software?

Growing an e-commerce business means working on massive data. Since you're extending your reach to various regions, states, and countries, you will take in more and more transactions. Accounting software offers cloud-based and automated technology, making financial management easier and less error-prone. 

Accounting software allows the seller to:

  • Keep updated and accurate records.
  • Access important information anytime and on any device (with an internet connection).
  • Avoid the exhausting manual input and calculation.
  • Control the access levels of your team members.
  • Integrate various apps or tools to maximize the optimization of your books.
businesswoman analyzing online accounting data

What Is The Best Accounting Software for Shopify?

Experts and most e-commerce sellers usually recommend QuickBooks, Sage, and NetSuite for Shopify. Here's what you need to know about these programs.

QuickBooks

QuickBooks is a popular choice for Shopify sellers because it's easy to learn and has advanced features for accounting. You get a user-friendly dashboard for quick references and in-depth accounting reports. In addition, there are customizable options for invoice templates and reports. What's more is that you can integrate multiple apps within and outside of their product range. 

Sage

Sage incorporates time-saving and industry-specific features. It is a top provider in the UK, but sellers from across the globe can use it. The platform includes an automatic transaction matching system and uses AI to remember your data selections. In addition, it provides in-depth financial reports and has a nice interface too. 

NetSuite

NetSuite is relatively more expensive than the two. It's an enterprise resource planning system that allows you to automate financial transactions such as orders, billing, and inventory management. Forms, records, and workflows are customizable with industry-specific options. NetSuite is a good choice for large businesses with a complex accounting system. 

What Are Other Shopify Apps You Can Use For Accounting?

Your accounting software must be the primary tool for all your bookkeeping and accounting tasks. However, you may also add other Shopify tools to maximize seamless accounting for your business. Check out these free and simple tools.

  • Profit Margin Calculator - Use this tool if you're having trouble with selling prices and ensure to save money and increase profitability.
  • Cost-Per-Mile (CPM) Calculator - Use this tool to help you with advertising campaign costs. It calculates cost-per-mile/thousand impressions of one thousand views of your ad.
  • Discount Calculator - This tool is handy if you're planning to use a discount code for a special offer or sale and want to find out how much money you'll save. 

How to Choose Among Accounting Tools and Apps?

You can only pick the right accounting software if you've identified your business needs. Before you look into these tools, analyze your business status first. What's the current financial situation? What do you need right now to improve, and what are your plans? Will you introduce new products? Will you switch to omnichannel marketing? 

Setting your knowledge and expectations of your business will help determine which features you're going to look for in software. In addition, think of the bigger picture and seek long-term solutions. 

#2: Stay Updated With Your Books

Keep your books up-to-date to make way for accurate business decisions. You must always have correct financial information to avoid discrepancies in the long run. Do this on a weekly to monthly basis. 

Moreover, include basic financial transactions and reports, such as profit and loss statements, cash flows, inventory forecast, and balance sheets. All these details will help you make a better evaluation, forecasting of costs, and budgeting decisions. 

#3: Implement Security Measures

A report states that organizations lose 5% of revenue every year due to fraud. The main reasons are that businesses aren't careful enough when hiring someone or don't have effective security systems to prevent incidents like this. Moreover, it takes a lot of time and effort to recover the stolen finances, and most companies fail to do so. 

Ensure to keep a close eye on vital financial information. Fortunately, accounting software gives you control over who can access a certain file, such as bank accounts or bank statement reconciliations. Therefore, you can prevent or minimize the risk of fraud with the right tools and meticulous hiring processes.

#4: Learn Your Sales Taxes and Comply

Since the South Dakota v. Wayfair, Inc. decision in 2018, online retailers were required to pay sales taxes in the states they're associated with. The current system is very extensive and confusing, especially if you're not yet familiar with it. Each country, state, and even local areas have different sales tax rates that you have to be aware of.

Tax compliance is a significant part of a seller's obligations, so you must not overlook it. Learn about your associated locations' tax rates and rules in advance and seek effective solutions to comply with them. You can always ask the help of an accounting team to help you with your e-commerce sales taxes.

Alt tag: businesswoman shocked at online data image

Accounting Don'ts for Shopify Sellers

To maximize your preventive measures on accounting for Shopify sales, you must also know what mistakes to avoid. People learn from mistakes, but you don't have to make it yourself to understand. 

Common Accounting Mistakes on Shopify

Some things never change. Unfortunately, many Shopify sellers still make these mistakes despite warnings and clarifications. Naturally, you wouldn't want to be a part of that, so learn from these errors before making them yourself.

#1 Little to No Accounting System

First off, many sellers do not have an accounting system in the first place. They think that the Shopify dashboard and the little data from their account balance will do all the work. Unfortunately, that can only cost you huge financial losses in the long run. 

You can't properly evaluate and organize your finances without an accounting system. You have to track and record all transactions, assets, liabilities, and other expenses. Missing one of these can result in incorrect compliance and creation of your statements. If you're serious about growing your business, do yourself a favor and build a good foundation from the start. 

#2 Understating Shopify Deposits

Inexperienced sellers would record all deposits entirely to the Sales category. This creates some issues because tracking them needs some classification. Aside from sales, deposits also include discounts, returns, account fees, shipping income, and sales taxes. You have to code each batch to the correct categories for proper tracking purposes. 

Additionally, some sellers record sales in the wrong timeline. For example, one batch might belong to the previous month, but you included them in the current month instead. It becomes difficult to manage, and you're going to screw up your monthly sales data. 

#3: Mixing Personal and Business Financial Activities

You should learn how to put a clear line between personal and business matters. In the financial aspect, this is very crucial. Unfortunately, most start-ups or companies with few employees make this mistake often, leading to inaccurate business data and improper compliance. 

Some examples are using the wrong bank account for a certain transaction or the same Shopify account for personal and business books. These only put you at risk of financial trouble, so avoid merging the two matters as much as possible. Learn to keep the right records to the correct places. 

#4: Individual Recording of Shopify Sales

If you are switching to automated software, don't expect it to handle all transactions effortlessly. While there is truth in what the tools are capable of from that statement, one thing you should know is that it doesn't work on excessive volumes. Just like you, the software can get overwhelmed, too.

If you're running up to thousands of transactions regularly, it can be difficult and time-consuming to reconcile them. This is why instead of one-by-one, you should post your Shopify sales data in summary form and incorporate a cloud system to house it. 

Start Shopify Bookkeeping and Accounting Right With Unloop!

Bookkeeping and accounting might not be the main reasons why you wanted to join Shopify at first. Instead, you're thrilled to implement digital marketing strategies and expand your customer base to a global scale. However, you must also understand that bookkeeping and accounting are the foundations of a profitable business.

Regardless of whether you like Shopify bookkeeping and accounting or not, you have to do your books properly. Think of it as a long-term preventive measure. Don't make e-commerce harder than it already is. Do everything you can to make the work easier and 100% accurate. 

If you feel this will take up too much of your time, you can work with the Unloop Team to manage your books. Our services include bookkeeping, sales tax, and income tax (together with our partner accounting firms) for Shopify, Amazon, and multichannel sellers. Moreover, we use the best accounting tools like QuickBooks Online, TaxJar, and A2X. Gear up for a seamless accounting on Shopify today.

Read more

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

Canada collects one of the highest tax rates, and its tax system can be confusing for new business owners. How much do you know about how income tax in Canada works? Do you know how to compute your income tax manually? If you do not understand how the tax system works, you will never know your rights or the requirements for income tax returns.

That is why you have to educate yourself and become a responsible citizen and business owner. It is essential to equip yourself with information about the tax system, its brackets, and how to file and compute your income tax.

Cheer up because this article is what you need! Keep scrolling and be informed about the things you need to know about the Canadian tax system.

The Canadian Tax System

After World War I in 1918, Canada needed funds to rebuild the nation, pay debts, and secure pensions for war veterans. Thus, it replaced the temporary Income Tax War Act of 1917 with the Income Tax Act in 1948, mandating all Canadian citizens to pay taxes. 

Today, Canada has a marginal or progressive tax system that increases your tax rate as your income grows. Canadians need to pay two forms of taxes. One is the federal tax, and the other is the provincial tax. Each of them has different tax rates. 

The Canada Revenue Agency (CRA) collects taxes and sets Canada’s income tax brackets. As of 2021, the federal income tax brackets are as follows:

  • 15% on the first $49,020
  • 20.5% on over $49,020 to $98,040
  • 26% on over $98,040 to $151,978
  • 29% on over $151,978 to $216,511
  • 33% over $216,512

Meanwhile, the provincial tax rates may vary between the different Canadian provinces. For example, Ontario has the following provincial tax rates:

  • 5.05% on $45,142
  • 9.15% on over $45,142 to $90,287
  • 11.16% on over $90,287 to $150,000
  • 12.16% on over $150,000 to $220,000
  • 13.16% over $220,000

If you want to learn more about Canada's income tax rate for each province, you may visit the government website to explore each province’s income tax rates.

Steps on Computing Your Income Tax

Computing tax

A common misconception is that if you are earning $80,000, you need to pay a federal tax with a 20.5% rate, thus leaving you with a $16,400 tax. However, the tax brackets are designed to lower your total tax.

Here are the correct steps to follow in computing your income tax.

  1. Determine your net income first. To do this, subtract all the legal deductions like Registered Retirement Savings Plan, pension adjustments, and pension contributions from your gross income.
  2. Let us assume that your net income is $80,000. Thus, the first taxable amount based on the federal income tax brackets is $49,020. Multiply it by 15%, and you get $7,353.
  3. $80,000 is still eligible for the second federal income tax bracket. Since we already taxed the first amount, you must deduct it from your net income: $80,000 − $49,020 = $30,980. Now, multiply the remaining amount of $30,980 by 20.5%, and you have $6,350.90.
  4. Add $7,353 and $6,350.90. You have a total federal tax of $13,703.90.
  5. Now, let us assume that you live and work in Ontario. The first taxable amount is $45,142, and you need to multiply it by 5.05%, which is equivalent to $2,279.67.
  6. You are still eligible for the second bracket, and $80,000 − $45,142 = $34,858. Multiply the remaining amount of $34,858 by 9.15%, you have $3,189.51.
  7. Add $2,279.67 and $3,189.51; you have a total provincial tax of $5,469.18.
  8. Your overall income tax is $19,173.08, and you have a take-home pay of $60,826.92.

Income Tax Return in Canada

Income tax filing involves filling an income tax return form to determine if you owe the government federal or provincial income taxes.

No one can fill out your income tax return for you, so even if you have an accountant, you must still fill out everything correctly from your side. That said, accountants can help you determine your income tax return. 

The main reason why most people don't do their own income tax returns is that they can't find the information they need to fill out the tax forms correctly. You can do your income tax return yourself if you can get your hands on the following:

  • T-slips. These slips tell you how much money came into your account, such as your earnings from an employer or paid interest on a bank account.
  • Receipts. They can be anything that supports the information you declare on your tax form.

You are still the one who needs to file your income tax return, and you can do it several ways. You can send your files by mail or online with the help of NETFILE, EFILE, or Auto-fill My Return. Non-residents can only file tax returns by mail.

Income tax returns in Canada are filed every 30th of April. The deadline for settling outstanding income tax is also on the same day. However, CRA collects taxes monthly, and they appear in your payslip.

Here are the steps you need to do in order to file your income tax returns.

  1. Secure a tax return form by downloading it on the CRA website, or call the CRA hotline 1-855-330-3305 to request a copy.
  2. In order to access tax credits and benefits, complete and submit ON479, ON-BEN, and ON428 forms with your tax return.
  3. Fill out the forms by providing the correct information on each field. Make sure that you also provide accurate details about your income and other financial information.
  4. Send your documents by mail or email.

If you need help with your tax preparation, you can always rely on and consult with an accountant or tax preparation services who have the expertise when it comes to all your tax concerns.

These agencies can help you compute your tax and apply the deductions so that you can be eligible for tax returns. They can also help you file your tax returns properly. Remember: you have to hire someone you can trust and will offer you confidentiality. Allowing other experts to work on your tax means that you will provide sensitive information about yourself.

Aside from accountants and tax preparation firms, many free applications are available on the Internet to help you do both basic and complex tax computations. Just provide the accurate numbers required by these apps, and you can know how much taxes to pay without spending a single cent. 

You can still validate the result you get from free online tax calculators by showing it to accountants. If it is accurate, you can use that online app for the next tax collection.

Final Thoughts

Income tax brackets indeed help to lower your tax, especially if you’re not yet earning a lot of money. In case you can't find all your receipts and get a lower tax accumulation (even if it's just by a few percentage points), then hiring an accountant can be beneficial.

Do you have an online business, but you are afraid to file your tax? If you need professionals, you can contact us at Unloop and let our team help you with your taxes. We partner with certified accountants for online businesses.

Give us a call at 877-421-7270 as soon as you can to learn more about our tax and accounting services.

Income Tax in Canada: A Guide on the System, Brackets, and Filing
Watch Now

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

Canada collects one of the highest tax rates, and its tax system can be confusing for new business owners. How much do you know about how income tax in Canada works? Do you know how to compute your income tax manually? If you do not understand how the tax system works, you will never know your rights or the requirements for income tax returns.

That is why you have to educate yourself and become a responsible citizen and business owner. It is essential to equip yourself with information about the tax system, its brackets, and how to file and compute your income tax.

Cheer up because this article is what you need! Keep scrolling and be informed about the things you need to know about the Canadian tax system.

The Canadian Tax System

After World War I in 1918, Canada needed funds to rebuild the nation, pay debts, and secure pensions for war veterans. Thus, it replaced the temporary Income Tax War Act of 1917 with the Income Tax Act in 1948, mandating all Canadian citizens to pay taxes. 

Today, Canada has a marginal or progressive tax system that increases your tax rate as your income grows. Canadians need to pay two forms of taxes. One is the federal tax, and the other is the provincial tax. Each of them has different tax rates. 

The Canada Revenue Agency (CRA) collects taxes and sets Canada’s income tax brackets. As of 2021, the federal income tax brackets are as follows:

  • 15% on the first $49,020
  • 20.5% on over $49,020 to $98,040
  • 26% on over $98,040 to $151,978
  • 29% on over $151,978 to $216,511
  • 33% over $216,512

Meanwhile, the provincial tax rates may vary between the different Canadian provinces. For example, Ontario has the following provincial tax rates:

  • 5.05% on $45,142
  • 9.15% on over $45,142 to $90,287
  • 11.16% on over $90,287 to $150,000
  • 12.16% on over $150,000 to $220,000
  • 13.16% over $220,000

If you want to learn more about Canada's income tax rate for each province, you may visit the government website to explore each province’s income tax rates.

Steps on Computing Your Income Tax

Computing tax

A common misconception is that if you are earning $80,000, you need to pay a federal tax with a 20.5% rate, thus leaving you with a $16,400 tax. However, the tax brackets are designed to lower your total tax.

Here are the correct steps to follow in computing your income tax.

  1. Determine your net income first. To do this, subtract all the legal deductions like Registered Retirement Savings Plan, pension adjustments, and pension contributions from your gross income.
  2. Let us assume that your net income is $80,000. Thus, the first taxable amount based on the federal income tax brackets is $49,020. Multiply it by 15%, and you get $7,353.
  3. $80,000 is still eligible for the second federal income tax bracket. Since we already taxed the first amount, you must deduct it from your net income: $80,000 − $49,020 = $30,980. Now, multiply the remaining amount of $30,980 by 20.5%, and you have $6,350.90.
  4. Add $7,353 and $6,350.90. You have a total federal tax of $13,703.90.
  5. Now, let us assume that you live and work in Ontario. The first taxable amount is $45,142, and you need to multiply it by 5.05%, which is equivalent to $2,279.67.
  6. You are still eligible for the second bracket, and $80,000 − $45,142 = $34,858. Multiply the remaining amount of $34,858 by 9.15%, you have $3,189.51.
  7. Add $2,279.67 and $3,189.51; you have a total provincial tax of $5,469.18.
  8. Your overall income tax is $19,173.08, and you have a take-home pay of $60,826.92.

Income Tax Return in Canada

Income tax filing involves filling an income tax return form to determine if you owe the government federal or provincial income taxes.

No one can fill out your income tax return for you, so even if you have an accountant, you must still fill out everything correctly from your side. That said, accountants can help you determine your income tax return. 

The main reason why most people don't do their own income tax returns is that they can't find the information they need to fill out the tax forms correctly. You can do your income tax return yourself if you can get your hands on the following:

  • T-slips. These slips tell you how much money came into your account, such as your earnings from an employer or paid interest on a bank account.
  • Receipts. They can be anything that supports the information you declare on your tax form.

You are still the one who needs to file your income tax return, and you can do it several ways. You can send your files by mail or online with the help of NETFILE, EFILE, or Auto-fill My Return. Non-residents can only file tax returns by mail.

Income tax returns in Canada are filed every 30th of April. The deadline for settling outstanding income tax is also on the same day. However, CRA collects taxes monthly, and they appear in your payslip.

Here are the steps you need to do in order to file your income tax returns.

  1. Secure a tax return form by downloading it on the CRA website, or call the CRA hotline 1-855-330-3305 to request a copy.
  2. In order to access tax credits and benefits, complete and submit ON479, ON-BEN, and ON428 forms with your tax return.
  3. Fill out the forms by providing the correct information on each field. Make sure that you also provide accurate details about your income and other financial information.
  4. Send your documents by mail or email.

If you need help with your tax preparation, you can always rely on and consult with an accountant or tax preparation services who have the expertise when it comes to all your tax concerns.

These agencies can help you compute your tax and apply the deductions so that you can be eligible for tax returns. They can also help you file your tax returns properly. Remember: you have to hire someone you can trust and will offer you confidentiality. Allowing other experts to work on your tax means that you will provide sensitive information about yourself.

Aside from accountants and tax preparation firms, many free applications are available on the Internet to help you do both basic and complex tax computations. Just provide the accurate numbers required by these apps, and you can know how much taxes to pay without spending a single cent. 

You can still validate the result you get from free online tax calculators by showing it to accountants. If it is accurate, you can use that online app for the next tax collection.

Final Thoughts

Income tax brackets indeed help to lower your tax, especially if you’re not yet earning a lot of money. In case you can't find all your receipts and get a lower tax accumulation (even if it's just by a few percentage points), then hiring an accountant can be beneficial.

Do you have an online business, but you are afraid to file your tax? If you need professionals, you can contact us at Unloop and let our team help you with your taxes. We partner with certified accountants for online businesses.

Give us a call at 877-421-7270 as soon as you can to learn more about our tax and accounting services.

Read more

Whenever you are out in the market searching for the best product, you must undergo a couple of steps to ensure that you’re making the right purchase. First thing, find out what people are saying about the product—look at the customer reviews on the product page, and expand your research even further by googling its pros and cons, watching how-to videos, and even following the brand on different social media platforms. 

If you’re doing the same thing to search for the best accounting tool for your business, you are on the right page—a Xero VS Quickbooks Online article. We hope that after reading this, you can weigh the different advantages and disadvantages and decide, once and for all, which software is best for your business. 

What Quickbooks Offers

Let’s begin checking the main services you will get when you sign up for Quickbooks accounting software. 

Bookkeeping

First among the services you will enjoy with Quickbooks is bookkeeping. When you sign up, you will be partnered with an expert bookkeeper who will help you backtrack all your income and expenses for the year. You just need to provide the right documents, and your business finances will be updated and ready for tax season. 

Through these bookkeeping services, you can also ensure that all the transactions and the money coming in and out of your business are all tracked and categorized accordingly. Receipts and invoices will be kept in one place, and you'll have data readily available for reporting and data analysis. 

Accounting

Next is an accounting service, where you make sense of all the data you collected, put them into graphs, and prepare them for reporting. With Quickbooks, you can customize and get the following reports and more:

  • Balance Sheet
  • Profit and Loss Statement
  • Income Statement
  • Account Receivable Aging
  • General Ledger
  • Cash Flow Statement
  • Revenue by Customer
  • Statement of Retained Earnings

Because you have all the data stored in one software, you can run these reports instantly and as often as possible. As a result, you can make decisions and adjust game plans right away and based on data. 

Payroll Management

You can integrate to Quickbooks the time tracking software you are using so that you can easily generate your employees’ payroll. The highlight for the payroll services is that it also includes tax and sales tax calculation, filing, and payment by Quickbooks. Computation accuracy is assured, and Quickbooks even vows to pay $25,000 if there are any mistakes in tax computation. These steps are all possible because of software automation. 

By the end of every cutoff, your company accountant would need to check the details. You just need to click the approve button for the payment to be sent to your employees. 

Payments And Bank Reconciliation

The advantage of bank account connection is the convenience of tracking the money coming in and out of your account. The software will also automatically categorize these transactions. You can easily raise a red flag for unaccounted transactions. 

Payments are made easier as the invoice you send to your customers already has “Pay Now” buttons, which makes the payment process convenient, cashless, and digital. You can also create and schedule recurring invoices, send them to your clients, and receive payments automatically. 

Inventory Management

Quickbooks is designed for freelancers and small businesses, but it adjusts as you grow your business. If you’re in the planning stages of building a business in the eCommerce world, you can integrate your inventory to Quickbooks from different platforms:

  • WooCommerce
  • BigCommerce
  • Wix Stores
  • Shift4Shop
  • Shopify
  • Volusion
  • PrestaShop
  • Weebly
  • Amazon
  • Squarespace
  • Magento

You can utilize multiple tools for your eCommerce business, but it would help if you integrate all these into a single software. In addition, doing so will organize your data and money and ensure convenience. 

About Xero Software

Moving on, let’s talk about the services being offered by Xero, the equally recognized software for accounting.

Accounting

You can rely on Xero accounting to generate reports based on all the data you’ve stored in the system. The reports are all customizable, from the dragging and dropping of columns, formula creation to determining which area of your business you want to keep track of.

Whether you have weekly, monthly, quarterly, or yearly reviews, you can generate reports instantly with up-to-date information. All these reports are stored in the system as historical data, which you will find useful for case studies for your present decision-making. In addition, you can import and convert reports to PDF or spreadsheets documents. 

Pay Bills And Claim Expenses

Some bills and expenses are generated consistently, while some are paid only a few times or one time only. No matter what type of transactions you have, Xero has solutions for you. 

  • Recurring payments can be scheduled and automatically be paid.
  • Receipts from claim expenses and reimbursements are kept in the system, and the costs are tracked.
  • Invoices can be scheduled and created easily.
  • Xero has a contact list integration you will find helpful in sending invoices.

All the money going out of your account will be tracked by the system and tagged as expenses.

Send And Receive Payments

Utilize the bank connections capability of Xero to receive and give out payments easily. You can also integrate the following payment methods:

  • Stripe
  • Transferwise
  • ApplePay
  • GoCardless
  • Different banks

The invoice you send will have a “Pay now” button, so your clients can send payment instantly. If you have regular customers, you can also schedule acquisition of payments via bank-to-bank transactions or direct debits to ensure all fees will not pass due dates. The charges you get will be tracked and categorized as income, while the payments you make will fall under expenses. Reporting will be made easier with data tracked right away. 

Time And Project Tracking

Whether you have a business with in-house employees or remote workers, the project and time tracking features of Xero can be extremely helpful. You’ll see project progress and the work rendered by your employees. When payroll generation comes, it will be easy to create invoices and compute salaries based on the time rendered. You can also check the cost for each project and use all the data collected to foresee future spendings with the same project. 

Since Xero allows integrations, you can use Trello project management software for projects and collaborations and integrate it with Xero.

Xero Analytics

Xero offers two data analytics versions Xero Analytics and Xero Analytics Plus. This accounting feature allows you to track your cash flow and check the financial status of your business because the data tracked are given sense through reports. If you upgrade to Analytics Plus, your decision-making will be made easier with AI simulations for specific financial decisions. Run your plans A-Z in the Xero Analytics plus first to see whether your venture will be profitable and to check what adjustments you need to make to work on your plans' weak spots proactively. 

about xero software

Xero VS Quickbooks: Which Accounting Software Is Better?

After seeing the two accounting software services, it’s now time to know when it is best to use Xero accounting software vs. Quickbooks and vice versa. 

Why use Quickbooks accounting software?

Social Trust

As of 2019, Quickbooks announced that they already have 4.5 million customers. Meanwhile, Xero only had 1.82 million subscribers in 2019, according to their website. These numbers show that Quickbooks is the more widely used and trusted accounting app. 

Better Scalability

Quickbooks is designed for freelancers and small businesses, but its reporting and data tracking capabilities adjust as your business grows. If you look into the four plans offered by Quickbooks, you will see the increase of data being tracked—enough to cover the increased needs of your bigger business. 

Mileage Tracking 

You don't need to worry about tracking the miles you take for business-related trips, as the Quickbooks mileage app will do it for you. The best thing is that you can enjoy this service even with the software’s basic plan. Doing so will give you peace of mind when tax season and IRS audit comes. 

Customer Support

Although both software has customer service available, Quickbooks has it better because of phone and online support availability. If you want 24/7 customer service, the Quickbooks Advanced Plan also offers this. Whereas Xero provides 24/7 online support, but none for mobile. 

Unlimited Invoices

Proportionate to the growth of your business is the increase in the number of invoices you need to create. You can count on Quickbooks' unlimited invoice creation for this in any plan type you sign up for. It is unlike Xero’s limited invoice offers of 20 invoices for its Early Plan. 

Availability of Claim Expenses

Claim expenses begin the moment you start your business, so you need to track them as soon as possible. It's a great thing Quickbooks offers claim expenses from the basic plan to the more advanced offers. Xero also provides claim expenses, but only under its Established plan.  

You can customize reporting as you grow your business.

As your business continues to grow,  so should your Quickbooks plan. There are four plans you can choose from, and as the plan advances, so do its reporting and data tracking capabilities. For Xero, only a few services are added as the plan progresses. 

Tracking categories

In accounting, it is important to categorize all the data in the software, and with Quickbooks, you can create up to 40 categories. Your assets, liabilities, and equity can be broken down further into more classes to help you generate the reports you need. 

Why use Xero accounting software?

Unlimited Users

The advantage of using cloud accounting software like Xero and Quickbooks is the ability to control who can access business financial data. If you need software that does not limit the number of users, Xero is the one for you with its Established plan allowing unlimited users for the software. 

Number of accounts

In the same way, Xero also allows more accounts than Quickbooks. If you manage many businesses, you can track all the accounts with a single software. You can make up to 699 accounts using Xero. In comparison, Quickbooks can only create up to 250 accounts. 

Capable of more integrations than Quickbooks

Xero has more than 1,000 applications you can integrate into its system to keep all your financial data in one software. This is higher compared to Quickbooks, with only 650 integrations. Some of the applications you can integrate with Xero are Trello, Gusto Payroll, and other payment software. 

Fixed asset management

Do you own properties or assets like land, buildings, factories, furniture, or equipment? Quickbooks or Xero can account for even these details in your business. However, Xero makes it more accessible to users under all accounting plans. 

So, Which One Is Better? 

After giving you the details of what Xero and Quickbooks software offer and what features the two software are better at doing than the other, which one do you think suits your business best?

The answer depends on your current business needs and how you foresee your business growing.

Business needs: Consider the size of your business. Are you a freelancer, a startup, or a small business? Xero is software intended for bigger firms. As you can see, the software allows an unlimited number of users and creates more accounts. However, if you are a freelancer or a small business, Quickbooks offers much more efficient data tracking and reporting. 

Growth of your business: Quickbooks' reporting and tracking capability are better when it comes to assisting a growing business. It offers even more features as you scale your plan from Simple Start to Advanced. Xero, too, makes its features accessible gradually from Early to Established plans, but the differences are not that much as compared to the increased services by Quickbooks. 

Knowing which one is better depends on you and your business goals. 

Get Assistance From Unloop!

Here at Unloop, we particularly use Quickbooks because it is the most widely used software by accountants. It perfectly caters to our clients, who are mostly freelancers and are still starting with their business. 

If you need assistance on your business accounting and are looking into using Quickbooks, we’d be glad to help. Skip the hassle of learning the ropes on your own with our team of financial experts. If you’d like to learn more about our accounting services, please feel free to call us at 877-421-7270. We’d be most happy to assist you. 

Xero VS Quickbooks: Answering The Debated Question, Which One’s Better?
Watch Now

Whenever you are out in the market searching for the best product, you must undergo a couple of steps to ensure that you’re making the right purchase. First thing, find out what people are saying about the product—look at the customer reviews on the product page, and expand your research even further by googling its pros and cons, watching how-to videos, and even following the brand on different social media platforms. 

If you’re doing the same thing to search for the best accounting tool for your business, you are on the right page—a Xero VS Quickbooks Online article. We hope that after reading this, you can weigh the different advantages and disadvantages and decide, once and for all, which software is best for your business. 

What Quickbooks Offers

Let’s begin checking the main services you will get when you sign up for Quickbooks accounting software. 

Bookkeeping

First among the services you will enjoy with Quickbooks is bookkeeping. When you sign up, you will be partnered with an expert bookkeeper who will help you backtrack all your income and expenses for the year. You just need to provide the right documents, and your business finances will be updated and ready for tax season. 

Through these bookkeeping services, you can also ensure that all the transactions and the money coming in and out of your business are all tracked and categorized accordingly. Receipts and invoices will be kept in one place, and you'll have data readily available for reporting and data analysis. 

Accounting

Next is an accounting service, where you make sense of all the data you collected, put them into graphs, and prepare them for reporting. With Quickbooks, you can customize and get the following reports and more:

  • Balance Sheet
  • Profit and Loss Statement
  • Income Statement
  • Account Receivable Aging
  • General Ledger
  • Cash Flow Statement
  • Revenue by Customer
  • Statement of Retained Earnings

Because you have all the data stored in one software, you can run these reports instantly and as often as possible. As a result, you can make decisions and adjust game plans right away and based on data. 

Payroll Management

You can integrate to Quickbooks the time tracking software you are using so that you can easily generate your employees’ payroll. The highlight for the payroll services is that it also includes tax and sales tax calculation, filing, and payment by Quickbooks. Computation accuracy is assured, and Quickbooks even vows to pay $25,000 if there are any mistakes in tax computation. These steps are all possible because of software automation. 

By the end of every cutoff, your company accountant would need to check the details. You just need to click the approve button for the payment to be sent to your employees. 

Payments And Bank Reconciliation

The advantage of bank account connection is the convenience of tracking the money coming in and out of your account. The software will also automatically categorize these transactions. You can easily raise a red flag for unaccounted transactions. 

Payments are made easier as the invoice you send to your customers already has “Pay Now” buttons, which makes the payment process convenient, cashless, and digital. You can also create and schedule recurring invoices, send them to your clients, and receive payments automatically. 

Inventory Management

Quickbooks is designed for freelancers and small businesses, but it adjusts as you grow your business. If you’re in the planning stages of building a business in the eCommerce world, you can integrate your inventory to Quickbooks from different platforms:

  • WooCommerce
  • BigCommerce
  • Wix Stores
  • Shift4Shop
  • Shopify
  • Volusion
  • PrestaShop
  • Weebly
  • Amazon
  • Squarespace
  • Magento

You can utilize multiple tools for your eCommerce business, but it would help if you integrate all these into a single software. In addition, doing so will organize your data and money and ensure convenience. 

About Xero Software

Moving on, let’s talk about the services being offered by Xero, the equally recognized software for accounting.

Accounting

You can rely on Xero accounting to generate reports based on all the data you’ve stored in the system. The reports are all customizable, from the dragging and dropping of columns, formula creation to determining which area of your business you want to keep track of.

Whether you have weekly, monthly, quarterly, or yearly reviews, you can generate reports instantly with up-to-date information. All these reports are stored in the system as historical data, which you will find useful for case studies for your present decision-making. In addition, you can import and convert reports to PDF or spreadsheets documents. 

Pay Bills And Claim Expenses

Some bills and expenses are generated consistently, while some are paid only a few times or one time only. No matter what type of transactions you have, Xero has solutions for you. 

  • Recurring payments can be scheduled and automatically be paid.
  • Receipts from claim expenses and reimbursements are kept in the system, and the costs are tracked.
  • Invoices can be scheduled and created easily.
  • Xero has a contact list integration you will find helpful in sending invoices.

All the money going out of your account will be tracked by the system and tagged as expenses.

Send And Receive Payments

Utilize the bank connections capability of Xero to receive and give out payments easily. You can also integrate the following payment methods:

  • Stripe
  • Transferwise
  • ApplePay
  • GoCardless
  • Different banks

The invoice you send will have a “Pay now” button, so your clients can send payment instantly. If you have regular customers, you can also schedule acquisition of payments via bank-to-bank transactions or direct debits to ensure all fees will not pass due dates. The charges you get will be tracked and categorized as income, while the payments you make will fall under expenses. Reporting will be made easier with data tracked right away. 

Time And Project Tracking

Whether you have a business with in-house employees or remote workers, the project and time tracking features of Xero can be extremely helpful. You’ll see project progress and the work rendered by your employees. When payroll generation comes, it will be easy to create invoices and compute salaries based on the time rendered. You can also check the cost for each project and use all the data collected to foresee future spendings with the same project. 

Since Xero allows integrations, you can use Trello project management software for projects and collaborations and integrate it with Xero.

Xero Analytics

Xero offers two data analytics versions Xero Analytics and Xero Analytics Plus. This accounting feature allows you to track your cash flow and check the financial status of your business because the data tracked are given sense through reports. If you upgrade to Analytics Plus, your decision-making will be made easier with AI simulations for specific financial decisions. Run your plans A-Z in the Xero Analytics plus first to see whether your venture will be profitable and to check what adjustments you need to make to work on your plans' weak spots proactively. 

about xero software

Xero VS Quickbooks: Which Accounting Software Is Better?

After seeing the two accounting software services, it’s now time to know when it is best to use Xero accounting software vs. Quickbooks and vice versa. 

Why use Quickbooks accounting software?

Social Trust

As of 2019, Quickbooks announced that they already have 4.5 million customers. Meanwhile, Xero only had 1.82 million subscribers in 2019, according to their website. These numbers show that Quickbooks is the more widely used and trusted accounting app. 

Better Scalability

Quickbooks is designed for freelancers and small businesses, but its reporting and data tracking capabilities adjust as your business grows. If you look into the four plans offered by Quickbooks, you will see the increase of data being tracked—enough to cover the increased needs of your bigger business. 

Mileage Tracking 

You don't need to worry about tracking the miles you take for business-related trips, as the Quickbooks mileage app will do it for you. The best thing is that you can enjoy this service even with the software’s basic plan. Doing so will give you peace of mind when tax season and IRS audit comes. 

Customer Support

Although both software has customer service available, Quickbooks has it better because of phone and online support availability. If you want 24/7 customer service, the Quickbooks Advanced Plan also offers this. Whereas Xero provides 24/7 online support, but none for mobile. 

Unlimited Invoices

Proportionate to the growth of your business is the increase in the number of invoices you need to create. You can count on Quickbooks' unlimited invoice creation for this in any plan type you sign up for. It is unlike Xero’s limited invoice offers of 20 invoices for its Early Plan. 

Availability of Claim Expenses

Claim expenses begin the moment you start your business, so you need to track them as soon as possible. It's a great thing Quickbooks offers claim expenses from the basic plan to the more advanced offers. Xero also provides claim expenses, but only under its Established plan.  

You can customize reporting as you grow your business.

As your business continues to grow,  so should your Quickbooks plan. There are four plans you can choose from, and as the plan advances, so do its reporting and data tracking capabilities. For Xero, only a few services are added as the plan progresses. 

Tracking categories

In accounting, it is important to categorize all the data in the software, and with Quickbooks, you can create up to 40 categories. Your assets, liabilities, and equity can be broken down further into more classes to help you generate the reports you need. 

Why use Xero accounting software?

Unlimited Users

The advantage of using cloud accounting software like Xero and Quickbooks is the ability to control who can access business financial data. If you need software that does not limit the number of users, Xero is the one for you with its Established plan allowing unlimited users for the software. 

Number of accounts

In the same way, Xero also allows more accounts than Quickbooks. If you manage many businesses, you can track all the accounts with a single software. You can make up to 699 accounts using Xero. In comparison, Quickbooks can only create up to 250 accounts. 

Capable of more integrations than Quickbooks

Xero has more than 1,000 applications you can integrate into its system to keep all your financial data in one software. This is higher compared to Quickbooks, with only 650 integrations. Some of the applications you can integrate with Xero are Trello, Gusto Payroll, and other payment software. 

Fixed asset management

Do you own properties or assets like land, buildings, factories, furniture, or equipment? Quickbooks or Xero can account for even these details in your business. However, Xero makes it more accessible to users under all accounting plans. 

So, Which One Is Better? 

After giving you the details of what Xero and Quickbooks software offer and what features the two software are better at doing than the other, which one do you think suits your business best?

The answer depends on your current business needs and how you foresee your business growing.

Business needs: Consider the size of your business. Are you a freelancer, a startup, or a small business? Xero is software intended for bigger firms. As you can see, the software allows an unlimited number of users and creates more accounts. However, if you are a freelancer or a small business, Quickbooks offers much more efficient data tracking and reporting. 

Growth of your business: Quickbooks' reporting and tracking capability are better when it comes to assisting a growing business. It offers even more features as you scale your plan from Simple Start to Advanced. Xero, too, makes its features accessible gradually from Early to Established plans, but the differences are not that much as compared to the increased services by Quickbooks. 

Knowing which one is better depends on you and your business goals. 

Get Assistance From Unloop!

Here at Unloop, we particularly use Quickbooks because it is the most widely used software by accountants. It perfectly caters to our clients, who are mostly freelancers and are still starting with their business. 

If you need assistance on your business accounting and are looking into using Quickbooks, we’d be glad to help. Skip the hassle of learning the ropes on your own with our team of financial experts. If you’d like to learn more about our accounting services, please feel free to call us at 877-421-7270. We’d be most happy to assist you. 

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About unloop
Unloop is the first and only accounting firm exclusively servicing ecommerce and inventory businesses in the US and Canada. With the power of people and technology, our team dives deep into COGS and inventory accounting.. You are paired with a dedicated bookkeeping team that prepares accurate financial statements, financial forecasts, and can also pay bills or run payroll for you. Come tax time, everything is organized and ready to go, so you don't need to worry. Book a call with an ecommerce accountant today to learn more.
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