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Many aspiring business owners are eager to sell their products in Canada through Amazon.ca. After all, there is an ongoing belief that the ecommerce giant doesn’t collect general or provincial sales taxes there. But many have wondered: why is there no tax on Amazon Canada?

What’s more: do Amazon.ca sellers really not pay taxes for their transactions? As an Amazon seller, it's essential to know when to charge sales tax on items sold through this site and learn if Amazon automatically collects sales tax on behalf of their sellers.

Let’s investigate whether or not Amazon Canada collects sales taxes and answer related Amazon sales tax questions like when does Amazon collect sales tax in Canada, and when does it not? 

Why Is There No Tax on Amazon Canada?

Let’s begin our investigation by giving a hypothetical situation. Suppose a customer from British Columbia previously ordered from you, and you noticed that Amazon didn’t collect sales taxes during the transaction. How could that happen?

Every Amazon product sold in the United States is subject to sales tax based on the buyer's location. So why didn’t Amazon collect tax from this customer? Is there simply no sales tax collection on Amazon Canada?

There is, but sales tax collection in Canada works differently.

Unlike in the United States, Canadian tax laws apply Goods and Services Tax (GST) and Harmonized Sales Tax (HST) at the federal level. In contrast, Provincial Sales Tax (PST) is applied separately by individual provinces.

Because of this complex tax system, there are times when Amazon Canada doesn’t collect sales taxes for the seller; the seller has to do the collection and remittance themselves. 

Certain sellers are also encouraged to create a GST or HST account with the Canada Revenue Agency (CRA) for tax compliance.

As a result, many sellers have been led to believe that sales tax collection and remittance are non-existent on Amazon Canada when this belief is completely false. Debunking this myth will logically lead you to ask: when does Amazon.ca collect tax?

When Does Amazon Collect Sales Tax?

The laws on Amazon sales tax in Canada leave no room for confusion: you need to collect sales tax. Amazon even makes the task easier for sellers by collecting sales taxes independently, especially in these situations.

The Province Is Under Marketplace Facilitator Jurisdiction

Back in the day, you could sell online without the hassle of collecting sales tax from your customers until the Marketplace Facilitator (MPF) law took effect. 

Canadian law bases sales tax charges on the established GST, PST, HST, and Quebec Sales Tax (QST) rates per province.

Suppose you fulfill orders in different provinces across Canada. In that case, Amazon will directly collect sales taxes and remit them to authorities for you as mandated by the MPF.

You Are Registered in the Amazon Tax Collection Service

Amazon is already mandated to collect and remit sales taxes for you through the MPF. Still, Amazon's Tax Collection Service (TCS) can give you control and visibility of your sales tax. 

If you have an Amazon professional account, you can log in on Seller Central to optimize the following:

• The inventory storage/fulfillment center address (i.e., your warehouse or Amazon FBA warehouse address)
• The product tax code
• List of tax-exempt buyers
• Instances when shipping and handling charges apply
• Other local sales tax regulations

This service particularly helps if you also sell in locations not under MPF jurisdiction. In these cases, TCS can collate sales tax data for you when tax remittance season comes. 

You Sell Taxable Goods

Almost all products sold in Canada are taxable, from soft drinks and candies to clothing and footwear. If your products are not tax-exempt and zero-rated goods, you must charge GST, HST, PST, or QST accordingly. 

These categories are already defined on Amazon TCS, but you can further customize them. Know your products well to tag them as taxable or tax-exempt. 

Instances When Amazon Does Not Collect Sales Tax

You must have already figured out whether collecting taxes for your products is under your care or Amazon's. Now, here is some more helpful information on when Amazon does not collect sales taxes

The Province Is Not Under MPF Jurisdiction

To explain our earlier hypothetical example, British Columbia was previously not under MPF jurisdiction, meaning it was the seller’s responsibility to collect and remit sales taxes from orders from the province, not Amazon’s.

However, online marketplaces like Amazon, eBay, and Facebook are now required to collect provincial sales taxes for their sellers—something that started on July 1, 2022. This change happened because of the law passed by the British Columbian government in June 2022.

If the law changes and removes certain provinces from MPF jurisdiction, you may alternatively delegate the task to sales tax support services to make tax collection and remittance easier. 

A Group or Population Is Tax-Exempt

When you have access to the TCS, you can optimize the settings to exempt the following groups and populations:

• Small supplier businesses earning less than $30,000 annually
• Diplomats, government officials, and Indigenous Peoples
• Buyers with a tax exemption certificate and enrolled in the Amazon Tax Exemption Program

You Sell Zero-Rated Products

The law mandates that if you sell goods that fall under the following classifications, they should be zero-rated:

• Milk
• Bread
• Fruits and vegetables
• Livestock and poultry
• Prescription drugs
• Medical and dental devices
• Products for feminine hygiene

Include these details in the TCS to exempt your buyers from paying sales tax. 

Get Help From Unloop

Amazon.ca will collect and remit sales tax if the province is under MPF jurisdiction, the seller is registered with TCS, and their goods are taxable. Meanwhile, Amazon won’t collect and remit taxes if the destination is not under MPF jurisdiction and the seller has zero-rated or tax-exempt products.

After determining sales tax, you need to reconcile all data from TCS with your accounting books to help you with your Amazon seller accounting.

Sounds complicated? Unloop can help you! Our team of experienced bookkeepers will keep your books updated year-round to prepare you for tax season.

We know how important it is for Canadian sellers to stay compliant with tax laws, so skip the hassle of computing your taxes and leave it to us.

If you are interested in getting expert bookkeeping assistance, call us at 877-421-7270. We'd love to discuss our offers with you!

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.

So you have finally achieved your long-time dream of creating and managing a small business. But, unfortunately, dreams like that don't just stop after you’ve earned enough. Your success needs to be protected by making sure your finances are in check. This is why if you want your business to grow, you need to know a few bookkeeping tasks. However, bookkeeping might be an additional task that will weigh you down in the long run. Don't worry; there are professional bookkeeping Vancouver services that can help you manage your finances so you can focus on other responsibilities or enjoy more free time.

This article gives you an idea of the bookkeeping services you or your bookkeeper need to know and manage to keep track of your business.

Balance Sheet, Cash Flow, and Monthly P&L Statements

Monthly financial statements are the key to ensuring that your business is on track. But, as a business owner, you're probably too busy with day-to-day operations to keep an eye out for potential risks or problems. That's why it makes sense for you to get monthly bookkeeping services Vancouver can offer to monitor all aspects of your business.

Detailed business reports are essential to financial planning and cash flow projections. Your monthly statements of profit and loss, balance sheet, and cash flow will provide you with a snapshot of your company's fiscal health so that you can make informed decisions about its future growth potential. For example, you'll be able to compare how much money was brought in versus how much was spent on expenses. In addition, by looking at your monthly statements, you'll be able to see if any changes need to be made concerning your product prices or marketing strategies.

Bookkeeping Automated Software like Hubdoc or Dex

Hubdoc and Dex Bookkeeping and an expense management application that you or your bookkeeper can automatically use for financial data such as receipts, bills, and other information. You need to sync your accounts from different vendors once, and this software will record all the past and incoming invoices. For example, with Hubdoc, if you want to sync your Paypal receipts along with other overall receipts, you need to click the Paypal icon and log in your username and password once. After that, it will automatically sync with your account.

What's great with software like these is that it eliminates the time and effort of data entry and sifting through a mountain of papers. For example, you only have to take a picture of your receipt and upload it using a computer or mobile device or send it to an app-generated email. Additionally, it has a mobile app version so you can check your finances anytime.

Accounting Automated Software like Quickbooks and Xero

You might be confused why you need accounting software when you already have a bookkeeping one. Xero and Quickbooks are software that you or your accountant can use to extract or reconcile data from your bookkeeping app. So when your bank, your transactions, or your expenses are synced with the software, you can use it for creating reports. Most importantly, this automated accounting software includes invoicing and payroll, an added feature that bookkeeping apps don't have.

This includes account reconciliation, where you make sure all transactions in your accounts like credit cards or bank balances match financial records. It also includes creating invoices and making payments. Other features include invoice reminders, email support with experts in the industry, customized reports with graphs and charts to give you a visual representation of your company's financial status, custom price list for customers that will automatically pop up when they view or purchase an item on your website based on their location.

Unlimited Financial Accounts Handling

Vancouver bookkeeping services experts recommend that you get monthly bookkeeping services from a professional who will handle all of your company's financial accounts. This means unlimited account handling for your business, which can help you save time and money because it eliminates the need to hire additional staff or train existing employees on how to do this task.

By outsourcing these responsibilities, you can focus more on growing your business. For example, you'll be able to allocate resources into expanding company operations or starting up a new one without worrying about potential risks and problems because there's someone else keeping an eye out for them.

Let Us Help You With Bookkeeping Tasks

Bookkeeping services Vancouver BC that offer the mentioned features will help you keep track of your business finances, so you will always know how your business is doing. Unloop offers these services monthly and more and even has an option for a more customized service catered to only what you need. In addition, we will happily migrate the data for free if you are already using a different accounting or bookkeeping software.

If you are interested in Unloop services, then book a call or get in touch with us through the number 877-421-7270. We look forward to helping you grow your business!

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.

So you've landed a spot on Amazon to market your small business, which is excellent news! You're ready to embark on a new journey with plenty of opportunities to expand your customer base in the world's largest online retailer. But brace yourself because apart from performing the seller role, you’ll also don the Amazon bookkeeper hat to manage your business well, which is challenging.

In carving your path to success, there are some not-so-fun things you need to work through to accomplish your goals. For example, bookkeeping management; it is one of the most challenging aspects of running an Amazon business.

Amazon accounting can be challenging for any business owner. Smaller-scale ecommerce businesses—though they work on fewer transactions—aren't exempt from the grueling task of bookkeeping and accounting.

Sometimes, not having an accounting system with skilled experts to handle financial transactions adds to an online business's problems. It's difficult for Amazon sellers to take them all at once with the marketplace's complex system.

Let Unloop help you by identifying the challenges you might face when doing Amazon seller bookkeeping. It's important to be aware of these challenges so you can find methods to overcome them.

The Most Common Bookkeeping Challenges for an Ecommerce Business on Amazon

Managing an Amazon business is exciting—the convenience of managing a wide-reaching business from your screen is quite something. Still, small business owners in the marketplace face difficulties understanding bookkeeping and accounting tasks.

The most common roots of these issues are the absence of accounting software and accounting experience or a lack of them. As a result, most brands make the following Amazon accounting and bookkeeping management mistakes:

Calculating a Web of Seller Fees

Amazon has a complex system of seller fees (monthly fees, referral fees, and shipping fees via Fulfillment by Amazon) which makes managing expenses challenging, especially if you lack adequate knowledge and experience on the platform.

These fees have a specific breakdown of charges, complicating the system further. Unfortunately, Amazon doesn't provide single-entry invoices that help you track costs, so you'll have to estimate seller fees yourself.

Updating Inventory for Financial Statements

It impacts three aspects of your financial statements:

• The Cost of Goods Sold (COGS) on your income statement
• Your current assets on the balance sheet
• Your operating activities

 All these parts matter when talking about accuracy; that's why updating inventory and ensuring we get it right is crucial.

Returns, the Accounting Nightmare

Product returns are stressful in the first place—they require constant adjustments to your inventory based on return requests to avoid potentially harming customer loyalty. It's the negative kind of "killing two birds with one stone."

With Amazon, things are more complicated because FBA returns are classified into various categories: sellable, damaged, customer-damaged, defective, and carrier-damaged. It may seem organized initially, but Amazon sometimes makes incorrect inventory placements, making a mess of your books and, eventually, your business bank account.

Where Do the Taxes Go?

Sales tax preparation can be challenging for small ecommerce businesses due to the demand for multi-channel tracking. This results in inaccurate remittance to internal revenue authorities and, consequently, having inaccurate income on the books and in your bank account.

Today's tax regulations are over 10,000, and the variety of these systems is confusing when updating your books. Although Amazon takes the stress of sales tax collection and remittance away from the seller, you still need to track and accurately state multi-channel transactions in the paperwork to meet tax demands.

Make Unloop Your Amazon Bookkeeper

If you're looking for experts offering small business bookkeeping services, Unloop is your perfect business partner!

We understand Amazon's bookkeeping and accounting challenges, so we want to help you manage them the right way. Our team of small business bookkeeping and tax services experts collaborates with reliable accounting firms to ensure the accurate recording and reporting of financial records. 

Through our services, you can focus on growing your small business without worrying about documentation and analysis of financial information. If you find yourself having a hard time learning the processes of Amazon bookkeeping, you can always make things easier with us. All it takes to overcome Amazon's bookkeeping challenges is to make an appointment, so go ahead and book a call today.

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 day is almost over, but the list of department meetings, client calls, and supplier meetups is far from done, but you still push through as visibility on everything that is going on with your business is your top concern. The tasks can be both challenging and assuring. As a business owner, you need to ensure that all parts of your business work well and towards the goals you set.

When it comes to financial goals, you can make your day a bit less overloaded with tasks if you have bookkeepers monitoring the money coming in and out of your business. 

We’ll discuss here the seven basic services you’ll get from bookkeepers and what work arrangement is best for your business. 

Bills monitoring

Running a business is slightly the same as running a household only that your business has—more bills to monitor! Some of the bills you need to record are the following:

• Corporate taxes
• Office rental and utility fees
• Employee salaries
• Loans and debts to pay
• Supplier payments
• Company subscriptions
• Expenses from different departments
• All accounts payable

These are just some of the general bills you need to pay. Of course, the bigger the company, the more bills to account for.

Invoice management

Together with bills monitoring are the creation, recording, and distribution of invoices. Without a bookkeeper, you can pay all your dues, and forget the tracking afterward. 

The bookkeeper will ensure that everything is recorded, so when the accountant needs expenses data, a complete record with proper documentation can be provided. With the help of technology, this task is made easier. There are bookkeeping software that allows the storage of receipts, photos, and invoices.

Income and accounts receivable documentation

The bookkeeper also documents all the income from actual sales, accounts receivable, and from company assets for both cash flow and profitability checking. Since the bookkeeper also monitors the expenses like taxes and debts, it will be easier to generate reports on gross income and income pre and post-taxation. 

Income information is important in growing your business as this is the report investors and future partners would like to see—your business profitability. 

Dealing with bank records

The bookkeeper may or may not be the actual person who talks to the bank, but part of bookkeeping administration services is checking all bank transactions and credit card accounts. 

Bank and credit card details must match all the expenses and income documents recorded by the bookkeeper. If there are items not accounted for even after rechecking, you can enact an investigation as there may be fraudulent money coming in or out of your business.

Streamlining company financial processes

Bookkeepers are not only concerned with their ledgers and software that show all financial transactions of the company. They are also great team players who coordinate with different company departments for all money-related transactions.

To make everybody’s time well-spent in the office, the bookkeeper creates a streamlined process of submitting all the income from sales and assets and expenses from purchases, debts, and subscriptions. Think of the bookkeeper as your money tracking executive assistant. 

Payroll processing

The payroll is one of the many areas of your business where you always want to be accurate as other people are depending on it. Making mistakes can mean demotivation of employees or even loss of trust. Having bookkeeping services for business means there will be a person solely dedicated to doing the following for your employees’ salaries:

• Ensuring accuracy of salary calculations
• Deducts taxes and other mandated benefits accurately
• Adds incentives (if any)
• Employee loan deduction
• Payroll file management

Getting all data prepared for accounting reports

How often do you have your business financial reports? With remote bookkeeping/Calgary-based bookkeepers working with you, you can make the reports as often as you can as all the expenses and income are accurately monitored. 

Your company accountant can generate reports easily when the data needed is readily available from the bookkeeper. Looking at raw transactions would help, but reports are easier to understand with graphs and tables made by an accountant. 

Now, after knowing all the bookkeeping services Calgary-based and remote firms can offer, you might be thinking of signing up for a service. Let us help you know whether you need a part-time, full-time, in-house, or outsourced bookkeeper. 

Calgary Bookkeeping Services: Full-Time/Part-Time, In-House/Outsourced 

Whether you are thinking of hiring a bookkeeper part-time, full-time, or outsourcing to bookkeeping firms (Calgary or remote services), you are on the right track as you know you need to hire one!

Consider the following:

• The size of your business
• Number of employees for the payroll
• Company departments to acquire financial details from
• Number of suppliers to track
• Assets and income sources to document
• The data you want to track

A part-time, outsourced service may work for smaller businesses, while a full-time, in-house bookkeeper would be helpful for bigger companies. Yet, with the advent of technology, full-time, outsourced bookkeeping consulting services also work.

Partner With Our Remote Team

We are Unloop, and we help business owners selling on, but not limited to, Amazon, Shopify, Walmart, and Woocommerce. Let us help you track your finances, so you can make well-thought decisions and scale your business!

You can put off your plate bookkeeping and accounting tasks and spend your extra time monitoring other equally essential business operations with our remote team. Get all your financial assistance anywhere you are in the world!

You can call us at 877-421-7270 to get started. Talk to you soon!

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.

As your business grows, ensuring it runs smoothly will be challenging, especially when managing your financial data. Thankfully, Shopify allows third-party software to enrich your ecommerce experience. Plenty of Shopify accounting software is available to help small businesses like yours. 

Let’s discover how online accounting software can help you make quick work of your Shopify business's books!

What Can Shopify Offer Store Owners Like You?

Complete beginners can use Shopify order management, Shopify's POS (Point of Sale) system, fast and secure Shopify transactions, payment channels, and Shopify accounting integration by becoming one of the platform’s store owners. 

A Shopify seller like you can enjoy the following features that the ecommerce business platform provides.

What Challenges Will Shopify Sellers Encounter? 

Knowing how helpful Shopify is to online sellers may encourage and urge you to set up your own online business. Great! However, every seller will inevitably encounter a few road bumps and challenges in their business venture, especially with accounting. Here are some of them:

• Errors and Lost Documents: People who manually input details from physical documents may commit mistakes. These files can also easily get lost or destroyed. Likewise, Excel sheets where you place these details are prone to file corruption.
• Inventory Tracking and Management: Shopify has a built-in inventory management system. However, you can only make the most of it by integrating it with an accounting tool. 
• Sales Tax Tracking: Shopify allows sellers to set the sales tax and include it in customers' details when they checkout. However, the platform does not collect nor remit these taxes. Those complicated accounting tasks will be yours to handle.
• Missed Payments: Failure to get payment from customers on time or the inability to pay suppliers immediately affects your cash flow. It is even more challenging when doing cash-based accounting, as you won’t get a complete view of your finances.

These problems are common, so your chances of experiencing them are high. Yet, knowing them will lessen the fear and let you prepare ahead of time.

Accounting Do’s and Don’ts for Shopify Sellers

In the face of these challenging Shopify hurdles, first-time sellers may tremble in fear and abandon their ecommerce dreams altogether. Don’t worry; we’ve collated a list of accounting do’s and don’ts to prepare beginner Shopify sellers when encountering such challenges.

How Can Accounting Software Integration Help My Budding Business?

As mentioned, one of the crucial Shopify accounting do’s is to find and use the ideal accounting tool and software for your business. 

The best accounting software for Shopify makes it easy for you to take charge of your books and your small business's finances. Here are some of the features that many accounting software may offer.

Syncs Your Numbers Accurately and Automatically

With bookkeeping and accounting, accuracy is a top priority. Only when all the data in the books is correct can you get an objective view of your finances. With accounting software, apps, and integrations, you automate everything and eliminate manual input—the root cause of costly mistakes.

Automation allows users to view organized data from various payment gateways, the business’s bank account, inventory management tools, tax software, and more in a single place.

Seamless integration between the accounting software and the Shopify platform can also significantly speed up your workflow. With one click of a button, you can sync your records instantly. Some software can even do this automatically without pressing a button.

Helps Manage Your Inventory

As a Shopify seller, inventory management is a task that will occupy your time. You need visibility on how many items you still have, which items to replenish, and which have enough supply. You also need to see the shipping, storage, and fulfillment costs. These will help you determine which delivery method is best for your business.

Helps You Keep Track of Your Store Whenever and Wherever

You can summon the accounting software mobile app with a single tap on the screen. As a result, you can check on the latest numbers of your business no matter where you are. As long as you have a stable internet connection, you will never have to be apart from your business. You can even perform tasks such as creating invoices while on the move.

Gives Financial Reports in One Click

We know how busy an entrepreneur like you can be. The best accounting software comes with a one-click financial report feature. You don't have to ask your finance guy to check the books for you to get a clearer picture of how your business is performing. You can even generate helpful and insightful graphs and charts to help you make better business decisions.

Let’s You Track Expenditures Easily

With so much money going through your business, keeping your books straight can be a handful. However, integration between Shopify and accounting software makes this tedious task a breeze. You can link your credit card and bank account to the accounting software so that it records and categorizes your transactions as soon as you make them.

Keeps You on Top of Taxes

Selling on Shopify requires you to charge sales taxes when applicable. The thing about sales taxes is that they are sensitive to change. When you have apps and software that keep these changes on track, you can charge the correct sales tax every time. 

Accounting software allows you to efficiently compute your income and pay the correct dues during tax season.

What Are Your Shopify Accounting Software Options?

After learning how beneficial Shopify accounting software and apps are, you will naturally head to Google for the best free accounting software available. However, before you go on and download the first one you see, know that finding an exceptional and suitable accounting solution is crucial (even if it might be a financial investment). 

You can only pick the ideal accounting software if you've identified your business needs. Analyze your business status first. What's the current financial situation? What do you need to improve right now, and what are your plans? 

Setting your knowledge and expectations of your business will help determine which features you will look for in software. Here are some of the qualities of accounting software that you will want to consider before investing in one:

• Ease of Use
• Cost-Efficiency
• Multiple Software Features
• Security and Safety
• Device Compatibility
• Pricing

When it comes to your accounting software options, the top contenders are QuickBooks Online and Xero Accounting, with other tools like Sage Business Cloud Accounting, FreshBooks, Wave, Zoho Books, and Netsuite closely following.

We’ve juxtaposed these seven accounting software in the graphic to highlight their differences.

Other Commendable Applications

Software can further help you when you link other applications and integrations. You can enjoy the convenience of having all your data in one place. Be sure to reap these benefits using the following Shopify accounting apps and tools.

For Bookkeeping

• A2X gets all financial data you have from Shopify and other ecommerce sites categorized and organized to ensure accurate accounting, reporting, and taxes.
• Bench is all about bookkeeping—the first stage of accounting. This tool backtracks the financial data of new clients and keeps their books up-to-date. 

For Inventory Management

• Cin7 Omni is an inventory management tool for ecommerce businesses like Shopify, but business owners in the B2B and 3PL&EDI businesses can use it, too.
• ERPAG is a manufacturing software helpful for Shopify sellers who manufacture their own goods. The cloud-based material requirements planning (MRP) system gives you visibility of raw material costs.

For Accounting

• DEAR Systems/Cin7 Core collates all the data in the manufacturing stage, retailing, and selling. You can integrate inventory, sales, and other accounting details into your central accounting system.
• Holded is an accounting tool with invoicing, projects, inventory, CRM, ERP, and integrations. It is designed for ecommerce businesses and many more industries.
• Reckon One is a tool you can rely on for accounting, invoicing, and payroll. Timesheets, employee expenses, bank reconciliations, and projects are also handled.

For Reporting

• Syft Analytics software can help you generate comprehensive reports for your Shopify business. The generated graphs and charts can help you in decision-making.

For ERP

• Priority Software is an enterprise resource planning (ERP) software. It lets you manage all your business activities, like accounting, projects and risk management, procurement, and more!
• Versa Cloud ERP is another tool to help you optimize your business operations, like manufacturing, distribution, purchases, inventory management features, reporting, and accounting.

For Taxes

• Taxomate is a tool that focuses on ecommerce sites like Amazon, Shopify, and eBay. You can rely on it for CoGS, checking inventory value, and multi-currency support.
• TaxJar makes sales tax tracking, calculations, applications, collections, and remittances easy. The tool handles these all.
• Taxify handles your sales and uses taxes, ensuring that you charge the correct taxes to your customers and remit the right tax amount each time.

Final Thoughts

Managing a business is tough, especially for first-time business owners. Fortunately, cloud-based platforms and tools can make your life much easier. 

A combination of ecommerce platforms and ecommerce accounting tools, together with the expertise of professional bookkeepers, will take the burden of managing your business accounting off your shoulders. 

Consider employing the help of a reliable finance solution like Unloop! 

With a secure and intuitive ecommerce platform, easy-to-use accounting software, and our expert bookkeepers on board, you never have to stress about managing your online business.

Book a call today and let us help your business flourish!

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.

Amazon is not just a regular online marketplace; it's a massive platform that facilitates countless transactions on a daily basis. And where there are transactions, there are taxes. Sellers must understand the tax obligations of selling on such a platform. The solution? Amazon seller tax software designed for e-commerce platforms. 

Taxes can pose business challenges due to the varying rates across jurisdictions. One wrong move can result in penalties, fines, and potential legal issues. By harnessing the power of tax software tools, you can automate sales tax filings while staying compliant with the ever-changing tax regulations of Amazon. 

Before we delve into the best tax software for Amazon sellers, let's ensure we're all on the same page about the fundamentals of sales tax in this online marketplace. 

Understanding Sales Tax Basics for Amazon Sellers

Sales tax is a transaction-based tax that varies by state and sometimes by local jurisdictions. As an Amazon seller, you must know whether you are responsible for collecting and remitting sales tax returns based on specific rules and regulations.

In many cases, Amazon takes care of the hassle of calculating, collecting, and remitting sales tax for orders shipped to certain states. Isn't that a relief? No more stressing about manually figuring out tax processes for every transaction in those states.

But what about the other states? Sadly, the landscape changes when it comes to other states where Amazon doesn't assume the role of a facilitator. In these jurisdictions, sellers are responsible for the entire sales tax process. They must fulfill their duty accordingly to avoid any legal issues.

You can refer to this table for more information to find out which countries are covered by Amazon's marketplace legislation.

What Makes FBA the Most Complex Aspect for Sales Tax?

Sales tax is a topic that affects every ecommerce retailer, regardless of their size. But when it comes to Amazon FBA, the realm of sales tax can become more intricate and demanding compared to other retailers.

Amazon FBA offers numerous advantages, such as storage, packaging, and shipping services, allowing you to focus on their products and customer experience. But the convenience of FBA also brings with it a complex web of sales tax obligations that businesses must unravel.

Let’s start with the concept of Nexus. It refers to an Amazon seller's connection or presence in a particular state. With FBA, sellers often store their inventory in Amazon’s fulfillment centers across various states. This physical presence in multiple states can trigger sales tax obligations in those jurisdictions, even if the seller is based in a different state.

Another one is the dynamic nature of inventory movement within Amazon’s FBA network. Inventory may be transferred between fulfillment centers to optimize storage and shipping efficiency. While this benefits sellers in terms of logistics, it adds intricacy to sales tax compliance since the movement can impact the specific jurisdictions where sales occur.

Regulatory changes can also indicate an ongoing challenge for FBA sellers. Sales tax laws and regulations are not static; they often undergo state, country, and local modifications. These changes encompass new tax rates, adjusted thresholds, or revised exemptions. Staying updated and ensuring compliance can be demanding.

Let's not forget about physical products or tangible personal property. Sales tax obligations typically apply to the sale of physical goods, which is true for many products sold through Amazon FBA. Determining the correct sales tax rates and taxability of each item can be a lot, mainly when exemptions or special rules apply to certain things.

Navigating these hurdles requires a proactive approach to streamline sales tax management. The question now is, how will you rise to the challenge and stay on top of your tax responsibilities?

4 Sales Tax Compliance Software for Amazon Sellers

Managing Amazon sales tax compliance can quickly become overwhelming and prone to errors. Fortunately, there are solutions available to simplify the process.

You can now leverage sales tax automation software that integrates with your Amazon account. These nifty solutions take the burden off your shoulders by automatically calculating the appropriate sales tax for each transaction based on the customer's location and applicable tax rules.

As promised, here are four tax software options for Amazon sellers like you:

1. TaxJar

One of the most challenging tasks in sales tax rate computation is the first step—knowing which jurisdiction's sales tax nexus you fall under. National and local tax regulations make sales tax more complicated. But you can skip these worries with Taxjar, as the software stores information from 11,000 states, provinces, and municipalities. 

Amazon also has the Marketplace Tax Collection, so even the tax acquisition and remittance are made for you. Meanwhile, Taxjar lets you export sales data in a CSV file to complete your sales taxes and have it ready for your financial reports.

2. Taxomate

Taxomate has you covered on your sales and income taxes. As your taxes are monitored, so is your inventory. You'll have data on best-selling products and when it is time for stock replenishment. 

Once you purchase from Amazon and other ecommerce sites like Shopify and eBay, the details are automatically sent to Taxomate. Given that you have expanded your customers abroad and use a different currency, the multicurrency function of Taxomate will make tax computation and remittance easier.

3. A2X

Another reliable software that can track your ecommerce business operations is A2X. Unlike other software that focuses on taxes, A2X's coverage is broader. It serves as automated bookkeeping for your business, which removes the need for manual input and the risk of data inaccuracy. 

Amazon FBA and sales tax assistance are made possible because the software monitors FBA inventory locations and the destination of orders. These two details are the basis of sales tax rates. Because of the historical data available on the software, you can also check trends on sales tax and your business as a whole. 

4. HelloTax

Your customers might be from countries that pay VAT, so it pays to know about it and how it is implemented. HelloTax helps you comply with requirements by offering features tailored to VAT calculations, reporting, and compliance. 

Various EU countries and some provinces in Canada can benefit from this tax information reporting software. Most have distinct VAT systems and regulations requiring careful attention.

Unloop: Your Trusted Partner in Sales Tax and Accounting

Navigating taxes, whether for local or international sales, can be a complex undertaking. You must understand how much tax is owed in each country or the recent changes in guidelines. But fear not; we're here to help!

At Unloop, we understand your challenges as an Amazon seller, so we've curated a list of exceptional software solutions to make your tax troubles a breeze. These innovative applications enable you to accurately calculate tax rates based on specific regions where your products are sold, simplifying the compliance process like never before.

But our support doesn’t stop here. We’re here to handle all your financial management needs through our reliable and efficient sales tax preparer services. You can focus on the bigger picture of your business while we handle the nitty-gritty of Amazon tax management.

Let us be your reliable partner in conquering the complexities of Amazon sales tax. Book a call 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.

As a small business owner in Alberta, you may be looking to start selling your products or services to your locality and eventually expand across Canada. However, it's essential to be aware of the local Alberta and Canadian sales taxes to know how they affect your business finances. Whether you have begun your business or are still thinking about what to put up, this article will be helpful for you!

We'll discuss some great business ideas in Alberta, Canada, and give you the sales tax knowledge you need to be a tax-compliant business. Let us also share a few tips to ensure your small business thrives.

Top Brick and Mortar Opportunities in Alberta

Alberta is home to more than 4.7 million people, and the province has various resources. Through market research, you'll know what products the population needs. The supplies easily found in Alberta can give you an idea of what products to sell. Here are some business ideas that may click in the region: 

Assistance to Busy Professionals

Alberta is a highly industrialized province. It is home to many professionals working 8-12 hours daily, so offering services that can assist them are great business opportunities. Here are some services you can explore:

• Pet daycare 
• Baby daycare center
• Home cleaning service
• Laundry service
• Lawn and garden service
• Snow removal service

Serving Beef and Dairy

Anything related to beef and dairy is an excellent business, as Alberta is rich in beef and dairy farms. Many individuals born and raised in the region manage their own fields. If you have recently bought or inherited land in Alberta, here are some ventures to take: 

• Beef and dairy delicacies
• A restaurant
• A catering business
• Supplying to huge names in the food industry

Anything Related to Construction

Next to food, you can utilize Alberta's prominence as a great source of construction materials. Construction businesses will never lose demand—buildings and establishments are continuously built as Canadian provinces industrialize and improve their local economies. As a small business, you can begin producing small supplies and slowly grow to become a supplier to construction businesses. 

Ecommerce Opportunities in Alberta

It is tempting to think that the sky's the limit when selling online, but this may not be true. There are individual considerations when selling on physical stores and eCommerce sites. 

Do market research, study what sells and where they sell best, manage your inventory, and learn how to deliver your sales. 

These tasks include your store launching, optimization, and product advertising and marketing. With millions of sellers on different eCommerce websites, the competition online is only getting more challenging. You need to be ahead or at par with your counterparts. For that to happen, you can do any of the following:

Go for the big eCommerce platforms: Know which platforms to launch your store in. The top eCommerce sites in Canada are: 

• Amazon, 
• Walmart, 
• eBay, 
• Costco, 
• and Home Depot. 

Expanding internationally also becomes easier when you start selling on these sites. 

Know what to sell: You can rely on numbers when deciding. Numbers will tell you which products are in demand. 

Manage your inventory: Once you have decided what to sell, you need to plan when you'll store your products and how you will deliver them. Many eCommerce sites also offer warehousing and fulfillment, like Fulfillment By Amazon.

Alberta Sales Tax and Countrywide Charges

Your tax obligations should go hand-in-hand with your objective and creative business plans. With every sale you make, you need to charge sales taxes. You are also obliged to file your personal income tax and corporate income taxes yearly. What are these? Let's learn about them one by one. 

Alberta Sales Tax Rates

Alberta follows the charging of General Sales Tax (GST), a federal tax charged to almost all products sold in Canada. Alberta's sales tax rate is 5%, so you have to multiply this value by the product's total price to determine how much sales tax you will add to the buyer's total cost. 

Provincial Sales Tax Across Canada

Across Canada's 13 provinces, sales tax current rates differ as some charge Goods and Services Tax (GST), while others charge Provincial Sales Tax (PST), Harmonized Sales Tax (HST), or Quebec Sales Tax (QST).

Alberta, Northwest Territories, Nunavut, and Yukon charge GST only. Saskatchewan, British Columbia, and Manitoba Charge both GST and PST. Quebec has GST and QST(Quebec is the only province with QST), and the other provinces of New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island have HST.

Knowing these different taxes is necessary once you open your business to buyers nationwide and in different provinces. 

Corporate and Personal Income Tax

You also need to know your personal and corporate income tax returns. The two are computed similarly: You must check to which tax bracket your income belongs to know how much you need to pay. Income tax in Canada is paid either monthly, quarterly, or annually. 

Tips for a Successful Small Business

Now, you already have some ideas about what type of business you can launch in Alberta and the taxes you should know. Before we let you go, here are some tips to ensure your small business thrives and succeeds

• Build a company you care about. Getting up and running every day is easier because you are working on something meaningful and close to your heart. 
• Be objective with your business plan. Set realistic and measurable goals, and strategize how to reach each target. 
• Have a solid support team. Delegate the technical tasks to experts to ensure they are done correctly and get frequent reports. 
• Be honest with your strengths and weaknesses. Knowing your business strengths allows you to invest in them more and duplicate them. These weaknesses will enable you to be more competent in strategizing. 
• Know your target audience. The lifeblood of your business is your customers. Always get to know them, what they want, how they respond to your services and offers, and what more you can offer. 
• Keep an eye on your company finances. Know your KPIs and have weekly, monthly, quarterly, and annual reports. The smaller your business, the more often reports should be. Knowing your financial status can help you adjust game plans right away. 
• Always pay GST/PST/HST/QST accordingly. Always comply with the tax requirements to ensure the Canada Revenue Agency will not run after you for unpaid taxes.
• Know when tax exemptions apply. After knowing how to comply with sales taxes, check which transactions and goods, like basic groceries, are classified by the government as tax-exempt. This way, you can recognize the rights of tax-exempted groups and individuals.

Alberta Sales Tax Assistance From Unloop

And that’s it. We hope we have enlightened you with enough information on sales taxes in Alberta and other Canadian provinces. With this knowledge, you can save money by paying the right sales tax amount for your products or services sold across Canada. 

If you need bookkeeping, accounting, and tax computation assistance, Unloop can be your partner. We began as a small eCommerce business, so we know the exact assistance a small business owner needs. 

Give us a call now at 877-421-7270. We'd love to discuss our offers with you!

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.

It’s been well established—bookkeeping is an important aspect of any business. A certified bookkeeper in Ontario will provide valuable services that your company needs to function properly. If you want to ensure that your books are in order, then invest in a bookkeeper or hire a chartered professional accountant for these services. If you want a convenient option, bookkeeping services in Burlington, Ontario are some ways to do it. 

What is the main benefit of hiring certified bookkeepers? It's simple—they help you stay compliant with government regulations! As a business owner, you must already be aware that non-compliance could lead to a CRA audit, which also means more headaches than necessary.

This article tackles how bookkeeping can protect your business during a CRA audit and why you should take the time to find the best possible certified professionals for this job!

Things You Need to Know About Audits

There are a few things you should know about CRA audits. First of all, the CRA can audit any business at any time. They don't need to have any specific reason to conduct an audit—they can simply decide to do one at their own discretion. The CRA is not obliged to notify you ahead of time that they are coming. They may show up at your business unannounced and demand to check your books.

Keep in mind that CRA has the authority to assess penalties and interest on any taxes you owe. This reassessment could amount to thousands or even tens of thousands of dollars, so it is important to make sure your books are in order and that you are compliant with local government regulations. Bookkeeping services in Hamilton, Ontario, must adhere to Hamilton’s laws, while bookkeeping services in Windsor, Ontario, must adhere to Windsor’s—you might get overwhelmed at first, but it’s really just a matter of hiring a trusted team of professionals with the local tax know-how.

The CRA does not have a specific set of criteria when choosing which businesses to audit. Instead, it conducts audits based on a number of reasons. Other factors that could lead to an audit are:

• Not complying with government regulations
• Failing to file tax returns or declarations
• Having discrepancies between your books and your tax returns
• Receiving a large refund or owing a large amount of money
• Owning a business that’s viewed as high risk

They examine whether there's a writing discrepancy between the amount of cash in the business records and the amount certified by an auditor.

An auditor evaluates the books to ensure that all income has been recorded, all deductions have been approved, and all expenses are classified correctly. The auditor also checks your balance sheet to make sure everything adds up accurately.

Below are the other things that an auditor can do:

• Undisclosed foreign accounts
• Tells you if you can expense things during a specified period (such as capital expenditures)
• Determines if there are any future tax implications related to your transactions
• Assesses compliance with government regulations, including laws on import-export duties and bankruptcy payments
• Examines how much bank interest was earned on your deposits during the year
• Verifies how much money is owed to the Canada Revenue Agency (CRA)

The Auditing Process

It was mentioned earlier that CRA could conduct audits at their own discretion. They can conduct the audit without notification. However, the CRA respects taxpayers' time, and the auditor usually gives a mail or phone call that includes the time, date, and location of the audit. Most of the time, audits take place in the taxpayers' residence, business address, or representative's office. Audits may also take place in the CRA office, and that means that you have a chance to be assigned to an auditor located outside of your region.

Before the audit begins, it's automatic that the auditor will present you with supporting credentials for further identification and validation of authority. You need to prepare your books and other financial statements needed for the audit. Finally, the auditor provides a detailed receipt of any borrowed documents and returns them the soonest.

REMINDER: Financial data and any records related to your tax information aren't allowed to be sent via email because of security reasons. The auditor will give you instructions on how you can send documents online using the CRA's secured portals. Hire the best bookkeeping services for a proper compilation of your tax records.

For more information about a tax service, please read Income Tax Services and the Different Types of Income Taxes They Can Help You With, written by one of our CPAs here in Unloop.

Things to be Examined During the Audit

The auditor examines books, information, and documents collectively called records that also include the following:

• Any information available to CRA such as credit history, filed tax return, and property details
• Business records including bank statements, receipts, ledgers, rental records, journals, and contracts
• Personal records like credit card statements, mortgage documents, and bank statements
• Personal or corporate records of the people or entities not being audited, such as a spouse, significant other, family relations, corporations, trust, and partnerships
• Adjustments by your accountant or bookkeeper for accounting and tax purposes

A number of possibilities may happen after the audit. Moreover, it can be closed if the auditor deems the previous assessment valid and correct. However, you may be subjected to reassessment if discrepancies are found, leading to more taxes owed or a refund. You will receive a letter no matter what the outcome is. In case you are for reassessment, you have until 30 days to conform with the proposal.

You can disagree with the proposal for reassessment as long as you can explain your reason and provide supporting documents to establish your position.

Always Be Compliant

A certified bookkeeper in Ontario is worth investing in because it will definitely help you be compliant with government regulations. In addition, having a certified professional on your side can give you confidence during the audit from CRA and save you more time for discrepancy-free documents.Hire the best bookkeeping services today. Contact Unloop NOW!

After years of earning the trust of business owners and retailers, Peachtree Accounting has rebranded and is now known as Sage Accounting. Sage Accounting software also offers Sage 50, Sage 100, and more products for accounting needs.

Interested to know what’s new with Peachtree, or should we say Sage Accounting? Can we still use Peachtree Accounting software? What can businesses get from this rebranding, especially small business owners? Let’s dive deeper into this article and learn the new strengths of Sage Accounting.

A Brief History of Sage Accounting

Before we explore the improvements in Sage Accounting, let’s first learn the history behind this accounting software.

Everything was simple back then. Do you still remember what Windows looked like? The setup of Peachtree required Windows 95, Windows 98, or Windows NT 4. Then, you insert the Peachtree Accounting compact disc and install it. Peachtree was, in fact, a classic software.

After more than twenty years of providing powerful accounting and financial reporting capabilities, Sage released their 2011 version. Two years later, the cloud-based online accounting software Sage 50cloud was officially launched in the US market. 

Now, Sage Accounting offers an excellent roster of accounting products and services for all sizes of businesses, including Sage Intacct and Sage X3.

Sage Accounting Software Review: Different Name But Same Trusted Solution? 

Peachtree was well-received by many—a trusted solution, the perfect accounting software for small businesses. So, we’re pretty sure many of the product’s long-time users doubt the upgrade is any good. Why fix something that’s already perfect, right? 

But, as advertised, Sage Accounting still features the same functionality and interface as Peachtree. So, believe us when we say it still looks like the ever-so-technical dashboard of Peachtree with a few tweaks in the system. 

There are upsides to getting the latest software. Let’s see if the Sage business cloud accounting improvements are worth your money.  

New Features of Sage Accounting Software

We live in the era of technology and e-commerce. As a result, no device, no mere program, does one simple function. Let’s take a look at some of the basic accounting functions and new features of Sage accounting:

Advantages of Sage Accounting Software Today 

Seamless. Convenient. Collaborative. 

These are the words we would use to describe today’s new and improved Sage online accounting software. Let’s take a deeper look into the strengths of this cloud-based accounting software:

Easier Report Generation

Sage may not always have a user-friendly interface. However, filing payroll and income tax reports could never have been easier and simpler with Sage Accounting. Everything you need is right before you, just a click away. 

Sage Accounting’s simplicity is a huge advantage, especially when not all business owners are tech-savvy. Since they’re comfortable with using this tool, it is only a matter of time before they can enjoy the other benefits of Sage Accounting completely. 

Automated Bookkeeping & Auto Entry Feature

The accounting software has an automated bookkeeping system that allows you to focus on other parts of your business. You don’t have to worry about losing the receipts you have on hand through the Sage Accounting plan. With your smartphone, you can take a picture of the receipt and upload it directly to the accounting software.

The Auto Entry feature automatically extracts information from the receipt and categorizes them. These categorized entries are posted accurately on Sage, eliminating the need for manual data input.

Accessibility

With Microsoft Office 365 Integration, Sage Accounting provides you with secure online access and financial tools on any device at any time of day. Of course, you need to have internet access, but who doesn’t have internet access in this day and age? 

Financial reports from the previous year are easily traceable, and every transaction is backed up and saved. You have fewer worries about redoing your work. 

Invite and Share Access to Key Personnel

Employees, customers, and suppliers are all part of your company. Therefore, it makes sense that your financial statements include paychecks, purchase orders, and deposits. 

Sage Accounting allows you to invite your accountant and colleagues and manage their access settings. Such a feature gives way to a more collaborative work environment as it happens in real-time, which is more secure overall.

Built-In Audit Trail

The built-in audit trail lets you track every user’s activity, providing peace of mind that your employees are doing their job and your books are updated on time.

Limitations of Sage Accounting

Now that you know the improvements and advantages of Sage Accounting, it would also be beneficial for your business to consider the potential drawbacks of this software before using it.

Alternatives to Sage Accounting

Not satisfied with Sage Accounting’s makeover? No problem. We want to give you financial decisions optimal for your organization’s unique needs. So, if Sage Accounting is not the one for you, here are the top 3 accounting programs you might want to try:

Wave

Compared to Sage Accounting’s Sage 50cloud program, Wave has limited features centered around invoicing and printing receipts. Wave is suitable for business owners who use traditional accounting tools and want to try out accounting software. The tool’s accounting, invoicing, and receipt scanning features are free.

FreshBooks 

This could be the perfect alternative if your business is doing great in your industry and expansion is around the corner. FreshBooks offers great invoice-to-payment functionality integrated with e-commerce platforms such as Shopify and Stripe.

QuickBooks Online

Do you want flexible and customizable reporting with a minimalist look at an affordable price? QuickBooks Online offers many features, but it is best for small businesses or freelancers. 

Be In the Loop With Unloop 

If you’re starting your business venture, you’re lucky to have read about Peachtree Accounting’s upgrade to Sage Accounting. Being in the know is always key to staying on top of things. If you’re looking for a robust and reliable accounting solution, you now know Sage should be on your list.

If you are still looking for a team to work with, Unloop is here. We provide accounting services at affordable prices. If you want to know more about us, book a call, and we’ll help you make bookkeeping and financial management easier for your business. 

Every business needs a reliable bookkeeping system. This system is meant to help owners make critical decisions that can eventually lead to business growth. Unfortunately, many entrepreneurs don’t know the bookkeeping basics for small businesses, leading to their business’s early demise. 

Proper record-keeping is essential in running a business. But, if you’re not well-versed in finances, navigating the different bookkeeping tasks may be difficult. 

To help you understand, we’ve prepared a guide that every small business owner should know. So take notes!

Essential Bookkeeping Basics for Small Business 

For small business owners, even basic bookkeeping can be overwhelming. But the more you stay on top of managing your business finances, the easier it gets. Below is the list of things you must know to get better at managing your finances.

1. The Difference Between Accounting and Bookkeeping

First things first, you should understand that bookkeeping and accounting are two different things. Many people confuse these two things. And although bookkeeping and accounting are separate tasks, they work together.

Bookkeeping is the backbone of an excellent accounting process. If you do the bookkeeping process properly, you can expect the result from accounting to be accurate and true, which will help scale your business.

Without bookkeeping, businesses won’t be able to make sense of their numbers. To help you further understand bookkeeping, here is a table of how it differs from accounting.

2. Types of Bookkeeping Systems

Small businesses can put two main types of bookkeeping systems in place. Business entities have the option of using one system exclusively or combining both. Here is a more detailed look at each type of bookkeeping system.

Single-Entry Bookkeeping

Most small businesses start with single-entry bookkeeping. With this method, every business transaction or activity only has one entry in the bookkeeping record. Only sales, purchases, receipts, and payments can be maintained using this manner. 

This bookkeeping method can keep your finances organized if your business handles minimal transactions.

Double-Entry Bookkeeping

The double-entry accounting system records business transactions in two entries. It offers checks and balances since it records a credit entry to match every debit entry. Transactions are recorded when money is received or lent—it is not a cash-based system.

Most professional bookkeepers use this method since this is universally adopted and gives the most accurate recording of financial transactions.

3. Using One Accounting Method

Maintaining track of your business finances is simpler if you record everything properly. You can do various things to ensure you are maintaining your records. First, use the same accounting method for all your bookkeeping entries. But before that, here are the two accounting methods.

Cash Accounting Method

This is done by recording financial transactions when you receive or spend money. This is much simpler to do.

Accrual Accounting Method

This is where you record your accounts receivable and accounts payable before you physically receive or pay the cash. This means that you can already record the transactions even if the money does not reach your accounts yet. 

4. Managing Financial Documents

After knowing the types of bookkeeping systems and accounting methods, you should also understand how to manage financial records through ledgers. Your ledgers are the heart of bookkeeping. 

Without them, you won’t have proof of the transactions that happen in your business. Regular updates will give a clear view of your cash flow and help with your accounting. 

Prepare Ledger Accounts

The success of bookkeeping is in organizing and categorizing your accounts. Your business’s finances come from many financial transactions. One can start small by generalizing records for sales or records in inventory tracking as long as it gives you a full and clear view of the money that goes around inside your business. 

As your business grows, here are some of types of accounts that would be included in your ledger: 

• Assets, like accounts receivable, prepaid expenses, and cash 
• Liabilities, like accounts payable, debt, and lines of credit
• Revenue
• Expenses
• Equity 
• Profit and loss

Post and Analyze Ledgers Regularly

Updating your ledgers depends on the volume of your transactions. You can update ledgers daily, weekly, and monthly. Regardless of how often you post on your ledgers, you must be consistent to avoid getting overwhelmed when the accounting period comes. 

After all these updates, consult an accountant to create financial reports for your small business. From here, you can see if your business is growing positively, if you need to enact strategies to improve further, or if you need to change any processes that aren’t working.

5. Investing in Accounting and Bookkeeping Software

Manual data entry is the old way. There are small business accounting software that can do more than bookkeeping for your business. Investing in software streamlines all accounting tasks, not just bookkeeping, for your business to help you manage your finances.

Here are some factors to consider for small business accounting software:

• User-Friendliness: Not all business owners can use advanced features. Look for an easy bookkeeping system so even beginners in your team can use it.

• Payroll Services: Most accounting software nowadays help employers handle their employee’s wages. Some also have a time tracking feature, which can be helpful when your employee’s wages are based on the hour.

• Inventory Management: If you have a product-based business, it is likely you have suppliers. Inventory tracking helps determine which supplies are still in stock and which need refilling. Some software can manage inventories across numerous warehouses.

• Mobile-Friendliness: By being mobile-ready, business owners can easily access financial information anytime and anywhere. Software with a mobile app allows you to manage your finances in real time, in the palm of your hand.

• Report Generation: Out of all the accounting features, generating reports may be the most important. There are accounting software options that can instantaneously generate different reports for businesses. Using financial data from these reports, you can better comprehend your company’s financial performance.

• Cloud-Based: Online accounting software makes it easier for business owners to access their accounting data. They only need a stable internet connection and a device to access the software—no need to download and install programs.

Why Proper Bookkeeping Matters for Small Businesses

Whether operating a small or vast enterprise, bookkeeping is essential to build a successful business. Understanding your cash flow, tracking expenses, monitoring accounts payable, and even tracking your sales tax starts with bookkeeping.

Here are reasons why you should have a bookkeeping system.

1. Traces the Source of Financial Transactions

You keep records of your business expenses, but isn’t it also nice to know the source of your transactions? Instead of looking at raw numbers and wondering where they came from or where they’ve gone, bookkeeping can tell precisely whether the entry is an expense or a sale.

In double-entry accounting reports, you can even record the type of business expenses in your books. There are several business expenses, such as meals, traveling costs, and accommodation. The details will help you plan your finances for more efficient spending.

Additionally, you can be sure that all of your financial transactions are in one place. So, when you need to pull your records for accounting or for references, you know where to look.

2. Aids in Financial Reporting

If you have proper bookkeeping, you have complete and organized data. Accurate financial data is crucial for your financial reports. Bookkeeping can summarize your business’s expenses, income, and ledger categories.

There are three primary financial statements that businesses need to evaluate their performance:

• Balance sheet
• Income statement
• Cash flow statement

Bookkeeping also provides more detailed reports such as expense reports, sales reports, and other statements showing key performance indicators. These reports are then used as communication for the business administrators and stakeholders.

Also, accurate financial reporting can be used to attract business investors. Information on how much profit your business generates and how you handle your expenses can be leveraged to attract inventors to your business.

3. Helps Manage Cash Flow

Income and expense tracking is vital in every business. There is more to running a business than merely making money. You also have expenses to pay that will keep your business running. 

It is critical to understand whether the flow of funds into and out of your company is balanced. If your expenses are through the roof, you’ll need to make more money or cut down on expenses.

Likewise, you can create a budget to improve your business if you have a healthy profit. 

4. For Tax Compliance

In running a business, one thing is for sure—you have to fulfill your tax obligations. The government requires different forms of tax payables from businesses. Bookkeeping records will help businesses calculate the exact amount of taxes they must pay.

Failure to pay your taxes can lead to severe consequences. Bookkeeping is crucial in ensuring you won’t be fined for getting your taxes wrong.

Get Professional Bookkeeping Services at Unloop

Bookkeeping and accounting are two essential parts of running a business, but most business owners only see accounting as essential. Bookkeeping seems like a menial task that’s only around for keeping records of financial transactions. However, bookkeeping is also important as it serves as the basis of accounting and keeps your business balanced.

Looking for professionals who are well-versed in bookkeeping? Unloop can help you with your needs. We offer services on bookkeeping, forecasting, payroll, and taxes. 

Book a call with us now and talk to our experts to see what we can do for your business!