Sales tax is an obligation with the heaviest burden. In terms of calculation and collection, this tax is always on any business owner's radar. In every sale they make, they have to determine the right sales tax amount and remit it, too.
So it's only reasonable for business owners to find a more efficient way to file a sales tax return. In this department, two names compete: Quickbooks vs. TaxJar. But should they be rivals in the sales tax game, or is collaboration better? Let Unloop help you answer this question.
TaxJar: Sales Tax Specialist
For a lot of ecommerce businesses, sales tax is one of the most tedious to account for and remit. In addition, small business owners can get tangled on how much taxes to collect. That's because sales taxes vary based on region, products sold, and tax codes.
TaxJar sees this burden and resolves it with its sales tax collection technology. Here's what TaxJar can do that makes it a Sales Tax Specialist.
Automated Sales Tax Compliance
Built into the TaxJar system are different sales tax information from 11,000 jurisdictions to ensure that wherever your sales come, your business collects sales tax according to that jurisdiction's sales tax code or policy.
Nexus Exposure Tracking
TaxJar tracks your sales revenue and its location to determine your tax exposure. When sales volume (and therefore sales tax collection) reaches a certain level, TaxJar will notify you about your exposure in the particular nexus. This will help you in sales tax filing wherever your business should pay.
When you're notified of your nexus exposure, TaxJar also assists in the sales tax registration. In addition, it has resources on how you can register your business in the nexus. Alternatively, you can also tap TaxJar for registration assistance.
Correct Tax on Checkout
TaxJar has an API that integrates with your ecommerce store. This feature allows your ecommerce business to do accurate sales tax calculations upon the customer's checkout. This ensures your business is collecting the right sales tax that will reflect on the checkout page.
TaxJar can automate sales tax filing for your ecommerce business. As soon as you enroll in a nexus state, it can use the data collected by their system while it's integrated into your ecommerce account.
With this integration, it’ll be able to calculate the correct sales tax based on the products you’ve sold, making sales tax returns a breeze. Additionally, it’ll let you check (and approve) the sales tax amount before it pushes through.
What's great about TaxJar is its multichannel feature. Their application Integrates into a lot of marketplace platforms such as Amazon, Shopify, WooCommerce, Walmart, and Square. No need to worry about getting another application for another ecommerce business on another marketplace.
Can QuickBooks Compete with TaxJar?
Yes, it can. But it’s not close, at least in terms of sales tax. QuickBooks has been around for a long time and knows what businesses need, but its positioning is in accounting, not taxes.
In terms of competing with TaxJar for sales tax filing, here's the feature the accounting software offers.
The QuickBooks Automated Sales Tax Feature
The accounting software can make calculations on sales tax rates and takes into consideration the following:
- Your customer's tax exemption status
- The state where your business is registered
- The type of product you sell
The rest (including the sales tax return) will be your responsibility.
QuickBooks: Accounting Specialist
The accounting software has broader coverage in terms of ecommerce businesses. It offers an accounting solution, which means a little bit of everything, including sales tax. Here's what this amazing software can do.
Small business owners instantly get digital accounting and bookkeeping systems. This enables them to transition from hard copy books and spreadsheets into software that can integrate online.
Within the software, the user can generate an invoice and receive them. QuickBooks's invoice management will give sellers an accurate picture of their short-term debt and credits, which will help them manage their cash flow better.
QuickBooks lets users record and track bills and their payments. Additionally, sellers can integrate third-party apps that can automate their bill payments for them at a click of a button.
Financial Statement Reporting
Part of bookkeeping is financial statement generation. But if it's done manually, it can take time for a bookkeeper to do. QuickBooks can do it in real-time. By taking stock of all transactions in the system, it can instantly create income statements and balance sheets.
Banking Data Sync
One of the struggles of any small business owner is bank reconciliation. It isn't easy to locate each transaction on both the bank account and the records to ensure it's balanced.
QuickBooks makes bank reconciliation a breeze by syncing your bank data to the software. That means every expense and income will match what's on the accounting software and what's on your bank account balance.
Quickbooks and Taxjar: A Powerful Combination
If you're going to ask us what's better for your business, we'll say both. TaxJar and QuickBooks can compete, but they can also collaborate to give your business the best.
Here's what's going to happen when you do a TaxJar-QuickBooks integration.
A Robust Sales Tax Collection and Payment System
TaxJar can integrate into your ecommerce account and take care of your sales tax. On the other side will be QuickBooks syncing the sales tax data based on TaxJar's behavior so you can accurately record what you pay.
A Well-Rounded Accounting System
In addition to comprehensive sales tax collection, you get the power of QuickBooks's accounting software. It's well-rounded in that it can function as your entire accounting system, whether you're operating in a single sales channel or multiple ones.
QuickBooks also has other tax features, which you may need. For example, it has tax forms for filing income tax and income tax automation features for your employee payroll taxes.
An Ecommerce Business That’s Ready to Scale
Having both TaxJar and QuickBooks working together makes your ecommerce business scalable. You'll have automated sales tax remittance plus an accounting system. Both can be automated and overseen by you or a professional to ensure they work as you scale your business.
Your Accounting and Tax on Autopilot
At Unloop, our team of professional accountants uses QuickBooks as our main accounting software. We also know how to make TaxJar work alongside QuickBooks. Plus, our accounting pros have honed their skills in the ecommerce field. We’re both accountants and ecommerce specialists.
Let professionals handle QuickBooks and TaxJar to save time and make the most of both software. Unloop can make it seem like it's on autopilot. Call us at 877-421-7270 for a consultation, or check out our ecommerce services now.