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Bookkeeping and payroll services are two of the most important financial aspects in a business. Bookkeeping tracks all transactions, data, and important documents regarding your business. Meanwhile, payroll ensures you fulfill your responsibility to your employees by paying them on time and giving them their benefits. 

Yet, many small business owners don't know what to expect from a bookkeeping and payroll service. Many are confused about who to partner with for these vital services. This blog post will discuss what you can expect from a good bookkeeping and payroll service and how to choose the right partner worth what good bookkeeping and payroll services cost. Let’s begin!

Bookkeeping Service Inclusions

Bookkeeping is the task of tracking the money that is coming in and out of your business. The data is categorized and organized in books to be used by the accountant for financial reporting. As you grow your business, the income and expenses to track pile up. A great bookkeeping service will give your business these benefits. 

Software Setup

As a starter, a bookkeeping and accounting agency uses reliable bookkeeping and accounting software like QuickBooks, Xero, or Sage50 Cloud. An agency acknowledges the conveniences that technology brings: accuracy, automation, integration, and data security. Hence, the first thing they’ll do is set up an accounting software account for your business.

Backtracking Books

After that, the work begins. You do not have to worry about the transactions you weren’t able to track before signing up for the service, as the agency should be able to backtrack all those transactions. As a result, when tax season comes, you’ll have complete data to declare and the correct dues to pay.

Regular Book Updates

Your partner agency also keeps your books up-to-date. The software will help automate data collection from various income and expense channels. Transactions from your bank accounts and various payment channels will be jotted down on the books. As the business owner, all you have to do is double-check the details in case there are any errors. 

Visibility of Financial Statements 

Bookkeeping and accounting are there to ensure that whenever you need to check the financial status of your business, you’ll get the latest numbers. Some of the statements you can receive with the help of an agency are the following:

• Balance sheets
• Income statements
• Cash flow statements
• Shareholder equity changes statements
• Comprehensive income statements
• Non-financial statements

Bank Reconciliation

A business bank account left unchecked is more prone to fraud and other financial malpractices. But the bank reconciliation service offered by bookkeeping and accounting agencies will record all the money deposited in or withdrawn from your bank account in the books. Simply investigate if you see any anomalies.

Client Support

Agencies go the extra mile to add a human touch to their service. This comes from 24/7 customer service in multiple channels. If you have questions regarding the software or any book details, you can set up a meeting or get reports. They are always just a message away.

Payroll Service Inclusions

Payroll is as essential as bookkeeping. When you process your payroll smoothly, you’ll keep your workforce happy and driven to help your business succeed. Hence, investing in a payroll service is worth it. Either get it separately, or sign up for a payroll service together with bookkeeping. This is what you can get with a dedicated service. 

Information and Document Collection

Even in payroll, data and documentation are everything. So, the first task of the payroll expert you are partnered with is to collect all essential employee information like names, addresses, civil statuses, and tax statuses. They may ask your employees to accomplish tax forms for withholding tax and any bank information where you will send their salary.

Gross and Net Pay Calculation

Through the help of bookkeeping and accounting software, the payroll expert will calculate your employees’ gross and net pay. Gross salary is the amount workers receive before deductions, while the net pay deducts taxes and benefits. You should include all these details in employees’ payslips for transparency. They should also be included in the books for your reference.

Payroll Processing

You’ll rely on software to process payroll if partnered with an agency. This method is better than manual payment as it is less prone to mistakes and can be integrated into your bookkeeping and accounting software for faster computation and tracking. After the computation, you can send the salary straight to your employees’ accounts.

Tax Deductions, Collection, and Remittance

Every worker is responsible for paying taxes, and one thing you can do for them is handling income tax, deductions, collection, and remittance. An agency is equipped with tax software with the latest tax information, so you are sure that your computations are accurate. It can again be integrated into your accounting system for tracking. 

Bookkeeping and Payroll Services by Unloop

When it comes to bookkeeping and payroll services, you want to ensure that you’re partnering with a company that understands the ins and outs of both. Doing so can keep your books in order, and process your employees’ pay accurately and on time. 

We've outlined what you can expect from each service, but the question remains: who should you partner with?

If you are looking for an agency that offers bookkeeping and payroll services, look no further than Unloop. Our bookkeeping services include book updates, financial statement preparation, and tax management. We’ll do your payroll and taxes for you! We are just a call away if you are interested in accounting, tax preparation, bookkeeping, and payroll services. 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.

Sales tax is an obligation with the heaviest burden. In every sale business owners make, they have to determine and remit the right sales tax amount. It's only reasonable for them to find efficient ways to file a sales tax return. In this department, two names compete: TaxJar vs. QuickBooks. 

But should they be rivals in the sales tax game, or is collaboration better? Let Unloop help you answer this question. 

Laying Out The Facts: TaxJar vs. QuickBooks

Before we can compare, it’s best to introduce our challengers and list their exceptional features. What can TaxJar and QuickBooks do, and what edge do they have against each other?

Photo by rawpixel.com on Freepik 

TaxJar: The Sales Tax Specialist

For many ecommerce businesses, especially small business owners, sales tax is one of the most tedious and confusing tasks to account for and remit. 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. It offers additional support to its users by providing online webinars, documentation videos, and informational blogs. 

It’s worth noting that while the tool is available for a web-based desktop, platforms like iPhone or Android mobile aren’t supported.

Let’s further discuss TaxJar’s capabilities that make it a sales tax specialist.

Automated Sales Tax Compliance

Built into the TaxJar system are different sales tax information from 11,000 jurisdictions. It ensures that wherever your sales may come, your business collects sales tax according to that jurisdiction's sales tax code or policy.

Nexus Exposure Tracking

TaxJar tracks sales revenue and location to calculate tax exposure. When tax collection reaches a certain nexus threshold, TaxJar will notify you, helping you with accurate sales tax filing.

Registration Assistance

TaxJar assists in sales tax registration when notified of your nexus exposure. It offers resources on how you can register your business in the nexus. Alternatively, you can also tap TaxJar for registration assistance.

Correct Checkout Tax

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, ensuring your business collects the right sales tax that will reflect on the checkout page.

Tax Autofiling

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, TaxJar can calculate the correct sales tax based on the products you've sold, making tax returns a breeze. Additionally, it lets you check (and approve) the sales tax amount before it pushes through.

Multichannel Compatible

What's so great about TaxJar is its multichannel feature. Their application integrates into many marketplace platforms such as Amazon, Shopify, WooCommerce, Walmart, Square, eBay, Etsy, etc. You won't have to worry about getting another application for another ecommerce business on another marketplace.

Source: Photo by Pixabay from Pexels.com 

QuickBooks: The Accounting Specialist

On the other hand, QuickBooks offers an accounting solution, which means a little bit of everything (including sales tax) and has broader coverage for ecommerce businesses. QuickBooks supports platforms such as Mac desktop, iPhone mobile, Linux desktop or mobile, and more.

Here's what this amazing software can do.

Bookkeeping

Small business owners instantly get digital accounting and bookkeeping systems, enabling them to transition from hard copy books and spreadsheets into software that can integrate online.

Invoice Management

Within the software, the user can generate an invoice and receive them. QuickBooks's invoice management gives sellers an accurate picture of their short-term debt and credits, which will help them manage their cash flow better.

Bill Management

QuickBooks lets users record and track bills and their payments. Additionally, sellers can integrate third-party apps that can automate their bill payments at the click of a button.

Financial Statement Reporting

Part of bookkeeping is financial statement generation. When done manually, it can take time to complete. With QuickBooks, a bookkeeper can generate them in real time. It can instantly create income statements and balance sheets by taking stock of all system transactions.

Banking Data Sync

One of the struggles of any small business owner is bank reconciliation. Balancing transactions can be challenging, as locating each bank account entry and records isn't easy.

QuickBooks makes bank reconciliation a breeze by syncing your bank data to the software. That means every expense and income aligns with both the accounting software and your bank account balance.

Can QuickBooks Compete with TaxJar?

Yes, but not quite, at least in terms of sales tax. 

QuickBooks has been around for a long time and has built a strong reputation for meeting the accounting needs of businesses of all sizes. While it offers tax forms for filing income tax and income tax automation features for your employee payroll taxes,  its primary focus is accounting, not taxes. 

Let's discuss the sales tax filing feature the accounting software offers.

The QuickBooks Automated Sales Tax Feature

QuickBooks can make calculations on sales tax rates, including the following information:

• 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 fall within your scope.

To set up this feature, follow the steps in the tutorial below.

Quickbooks and Taxjar: A Powerful Combination

So, what's the final verdict? In the showdown QuickBooks vs. TaxJar, who is the worthy victor? If you ask us what's better for your business, we'll say both. TaxJar and QuickBooks can compete, but their collaboration offers your business the best of both worlds.

Here's what will happen when you do a TaxJar-QuickBooks Online integration.

Canva link

Your Accounting and Tax on Autopilot

At Unloop, we use QuickBooks as our main accounting software. We also specialize in seamlessly integrating TaxJar with this tool to help leverage our expertise in ecommerce accounting. 

Our professionals ensure efficient management of both software, saving you time for other business matters and maximizing software benefits. Trust Unloop to make your accounting feel like it's on autopilot.

Call us at 877-421-7270 for a consultation, or check out our ecommerce services.

Tax is a word people don't like to hear—especially Shopify sellers. It's enough to make anyone feel nervous. But you can't avoid it if you don't want to pay penalties or possibly face jail time.

Fortunately, Shopify has robust sales tax collection software that collects sales tax on your behalf, but these software don't file or remit your sales taxes. So it's up to you to organize and take care of the nitty-gritty bit of filing your taxes, not to mention issuing tax refunds.

Sales tax compliance can be a daunting aspect of your Shopify business, but there are software apps that can help you with automation. Here are five software apps you can use to automate Shopify sales tax compliance in 2023.

TaxJar

TaxJar is a leading provider of sales tax automation services for eCommerce businesses. They help online sellers collect, file, and pay their sales taxes. TaxJar makes sales tax filing and payment easy, so shop owners can concentrate on what they should be doing: selling online.

Price: Starts at $19/month

Free Trial: 30 days

Pros

• Pulls your sales data from Shopify and turns it into easy-to-read reports.
• Single-click auto file allows automatic submission of returns to the states where you have an economic nexus.
• Automated state and local sales tax reports.
• Sorts reports by date range to make filing tax returns with ease.
• Compatible with top marketplaces like Amazon, Etsy, Walmart, and eBay.
• Generates sales tax reports compared to what you should have collected.
• Intuitive dashboard with an easy-to-use interface.
• 30-day free trial.

Cons

• AutoFiling is usually billed on a pay-per-filing basis if you're not on the premium plan.
• AutoFiling and reporting are only available for US transactions.
• The tax return feature is only in the United States.
• Customer support is not easily accessible.
• Pricing plans are not transparent.

Zonos Duty & Tax

Zonos Duty & Tax is an eCommerce software developed by a team of professionals with extensive experience in the field. It can help you rest at ease with tax and duty compliance in the United Kingdom, Europe, and other international borders.

Customers won't be blindsided when they receive their items. There will be no unexpected taxes, duties, or other hidden costs. This should minimize issues with returned goods and costly returns.

Price: Starts at $20/month + 1.9% transaction fee for international orders.

Free Trial: None

Pros

• Automates calculations and displays the landed cost of items, including duty, tax, VAT, and more.
• Removes the element of surprise from taxes and duties charged on foreign transactions.
• Allows buyers to pre-pay tax and duty for quicker customs clearance.
• Free plugin for different languages that welcome international shoppers in their language.
• Provides absolute control over shipping rates.
• Custom services are available for a fee.

Cons

• You need to enable Shopify Carrier Service API to calculate the landed cost (Advanced Shopify plan or higher.)

Quaderno

Quaderno is a Shopify app that helps store owners with tax obligations and international compliance. It can help store owners who want to comply with international laws while also providing them with peace of mind that their enterprises' major tax, invoicing, and accounting concerns are taken care of.

It also helps owners keep track of their sales tax liability. The tool automatically calculates the sales tax rate for each state and jurisdiction and provides a streamlined way to file and pay taxes. Quaderno offers several other features, such as invoicing and reporting, that can help businesses save time and money. Quaderno is essential for any business that needs to manage its sales tax liability.

Price: Starts at $49/month

Free Trial: 7 days

Pros

• Generates complete tax reports in a single click.
• Files accurate and tax obligations quickly.
• Gives customers access to invoices at any time.
• Supports multiple languages and currencies.
• Integrates with other payment platforms like Stripe and Paypal.
• Real-time revenue tracking in a digestible format.
• An intuitive dashboard for managing your data.
• Customizable to your brand.

Cons

• No bad reviews on Shopify, so the good reviews are sketchy.

Tax Exempt Manager

LatoriApps' Tax Exempt Manager is a tax management software designed for store owners who want to stay compliant with the complex EU tax laws. Compliance with VAT rules for business-to-business transactions in Europe is tough. However, it's made a lot easier thanks to this software, which captures and verifies each customer's VAT ID automatically.

Price: $9.99/month

Free Trial: 14 days

Pros

• Assist you in complying with EU VAT exemptions for B2B.
• Collects and verifies your customer's VAT ID automatically.
• Provides a quick rundown of all purchases that have been made after checks for positive VAT IDs.
• The program is easy to install and set up.

Cons

• Customer service is unreliable.
• Residual code remains even after deleting it.

QuickBooks Online

Intuit's QuickBooks Online is a small business accounting software that gives users the ability to handle their accounting data in a single app. In addition, the software is accessible from any internet-connected device, making it a convenient option for business owners who are always on the go.

Price: Starts at $8.50/month

Free Trial: 30 days

Pros

• Beginner-friendly interface.
• Integrates well with eCommerce platforms.
• Flexible with third-party apps
• Provides accurate accounting reports.
• Affordable and has a long free trial.
• Accessible from any device.
• Intuitive dashboard and interface.
• Customer information and relevant data are easy to access.
• Allows you to fix accounting mistakes quickly.

Cons

• System often crashes.
• Lackluster customer support.
• A limited number of users allowed per account.
• Backup data is not always generated.
• Lacks an invoicing feature.
• Have limitations on robust inventory management.

Conclusion

If you're looking for a comprehensive sales tax solution or need help staying on top of your tax compliance, TaxJar or QuickBooks should do the trick. But as an eCommerce shop owner, you have a lot of things to worry about. From keeping up with inventory to managing shipping and customer service—there's a lot to stay on top of.

Of course, there's also the financial side of things. Keeping track of your sales, expenses, and profits can be daunting, especially if you're not accounting-savvy. That's where we come in. Unloop has a team of eCommerce accountants who are well-equipped and trained to handle accounting services in the US and Canada. Book a call with an expert today to learn 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.

Are you ready to enter the ecommerce world? It's a huge step considering that most shoppers today rely heavily on technology. Meanwhile, for sellers, it's an opportunity to expand the customer base internationally. But, we must address a common challenge among online sellers: ecommerce sales tax. 

With ecommerce, distance won't hinder a business from selling to another state or country. That's an incredible advantage of technology, but it’s also not without challenges. As a first-time ecommerce seller, you might ask yourself: "Do remote businesses need to pay sales tax?" Yes, they do.

Tax collection and remittance are now part of the requirements in ecommerce. Everyone in the industry knows the struggle, and no one expects you to digest everything in a day or two. But we’re here to help.

This article breaks down the fundamentals of sales tax in the USA. Know the basics and read some valuable tips on managing tax compliance. 

Here are some of the points we will be covering:

• How Ecommerce Sales Tax Started
• How Remote Sellers Are Affected by Sales Tax Policies
• The Basics of Sales Tax in Ecommerce
• 5 Steps to Tax Compliance
• Hiring a Bookkeeping and Accounting Team
• Technology and Sales Tax Management
• Sales Tax For Ecommerce Sellers: Tax Solutions With Unloop

How Ecommerce Sales Tax Started

If your business has a physical storefront, office, or warehouse in a certain state, you must pay and remit sales tax. That was the golden rule until the South Dakota v. Wayfair, Inc. happened in 2018, which states that online businesses must collect sales tax regardless of physical presence. 

In addition, states can redefine the "sales tax nexus" from a broader perspective so that ecommerce retailers become a part of the scope. Economic nexus or tax nexus happens when a seller has to collect tax in certain states where they exceed the revenue threshold.

How Remote Sellers Are Affected by Sales Tax Policies

The development of ecommerce sales tax laws makes the system immensely complicated—one of the most challenging aspects of ecommerce tax in compliance with constantly changing state policies. 

Ecommerce sales tax differs by state, and businesses must learn and comply with all that. It's not easy, and it gets more complicated internationally. Each country has a different tax law, which you must also consider. 

Because of the ever-changing tax policies, businesses are pushed to reassess their processing systems and implement operational changes as necessary. If not, sellers can be at risk of financial trouble. 

The Basics of Sales Tax in Ecommerce

Now that you understand how crucial sales tax is in your ecommerce venture, it's time to learn the basic terms and processes:

Ecommerce Sales Tax

Sales tax is a minor percentage of an online retailer's sales. It is a consumer or consumption tax, meaning consumers pay sales tax only on taxable goods. In the US, 45 states have implemented this tax. 

Moreover, there are combined sales taxes because counties, cities, and other local areas have "special taxing districts." Special taxing districts, also known as limited-purpose districts, provide special benefits to the residents of a certain local area.

The state where you sell and the destination point are the main factors in charging sales tax. You'll charge customers the sales tax required and remit it to the particular state.

Taxable Products

A rule of thumb in product taxability is that any tangible item is automatically taxable. Still, some states have exceptions, such as products with or without a reduced sales tax rate. Your customers will have to pay for these, so ensure they only pay as necessary.

Rates and Sales Tax Calculation

Here's a quick guide on how to calculate sales tax for Ecommerce.

1. First, have these details ready: (1) the state-mandated product rate, (2) the cost of the item, and (3) other important local sales tax rates, if any.
2. Multiply the item cost by the state tax rate. Ensure to convert percentages into decimals. 
3. If there are additional local tax rates, multiply the cost of the item by these different rates. Then, add the amounts you get from this and the sales tax rate multiplication.

In a formula structure: 

Tax Nexus

Tax nexus is the connection between your business, a state, or any other taxing authority. Naturally, you get a tax nexus in your home state, but some conditions may also prompt other sales tax nexus in some states, such as high revenue. Once you confirm a sales tax nexus, you can begin registering with the state's tax department, collect and remit sales tax, and file a tax return.

5 Steps to Tax Compliance

We hope the discussions above have helped you understand the online sales tax system better. It may be overwhelming and stressful, but that's much better than getting into a heap of financial trouble later on. Now that you have the basic knowledge let's move on to tax compliance. 

Tax compliance can be extremely confusing, and the smallest mistake can snowball into a huge financial mess. To prevent the confusion and stress of your ecommerce taxes, we've provided a step-by-step procedure to serve as your to-do list. 

Step 1: Perform a Thorough Q&A Session 

Before proceeding to action, ask yourself some important questions first. Your answers will determine which states you have an economic nexus in. We also recommend you consult with each state you're involved with to confirm these details.

Step 2: Register With the Tax Authority for a Sales Tax Permit

Next, register with the tax authority for a sales permit. This is the document that allows you to collect taxes legally. Contact your state's tax authority to obtain a sales tax permit. Then, you'll be asked to provide the following (not limited to) information:

• Employer Identification Number or Federal Employer Identification Number
• Contact information (business and personal)
• Social security number 
• Your business entity
• North American Industry Classification System Code

Depending on the state, these permits may be free or can cost up to $100. The renewal of a sales permit depends on the tax authority you're associated with. For example, some sales tax permits need renewal every one or two years. Meanwhile, others don't require renewal as long as your business still operates. 

Some states consider seller's permits as "resale certificates." Generally, resale certificates are signed documents that allow you to buy tax-free goods to resell. 

Like sales tax regulations, policies for resale certificates also differ by state. For example, one state considers your sales tax permit the resale certificate. Meanwhile, another requires you to have an independent reseller's permit number. 

Step 3: Know the Rates, How Tax Collection Works, and How Automation Helps.

Ensure your shopping carts, online checkouts, and other marketplace processing systems function properly. There are different bases for tax rates, so your platforms must charge the correct amounts.

Optimize Origin-Based, Destination-Based, and Mixed Sourcing

Each state makes its own tax rules, hence, the different sales tax sourcing bases. Sales tax sourcing is the basis of charging sales tax, namely, origin-based, destination-based, and mixed sourcing. 

Origin-based states follow the tax rate where the business or seller is located. Here are the states that collect origin-based sales tax rates:

Sources:

US Range of Local Sales Tax Rates

US States Sales Tax Rates

Sales Tax Rate Basis

Meanwhile, destination-based states follow the tax rate of the shipping address. Here are the states that collect destination-based sales tax rates:

Sources:

US Range of Local Sales Tax Rates

US States Sales Tax Rates

Sales Tax Rate Basis

California is the lone state with a mixed-sourcing sales tax rate basis. District sales taxes are based on the shipping location, while city, county, and state taxes are based on the business or seller’s location.

Sources:

US Range of Local Sales Tax Rates

US States Sales Tax Rates

Sales Tax Rate Basis

Ecommerce Platforms’ Different Tax Collection Systems

Generally, marketplaces significantly differ from each other, and so do their tax collection systems. For example, if you sell on Amazon, you will find a detailed tax collection engine different from another ecommerce site.

Automation Is Key to Efficient Sales Tax Management

Manual accounting puts your business finances at great risk. You might not find any issues at first, but that's because you can still handle the numbers. However, digits and state sales tax laws can change as time passes. Hence, managing data manually will be difficult and error-prone.

Automated cloud-based accounting software is the go-to for ecommerce tax compliance. It helps you meet all deadlines and tax rate differences in real-time. Doing so can prevent discrepancies and financial trouble with the states and customers.

Step 4: File and Remit Ecommerce Sales Tax

Take note of the filing frequency the state provided when you were obtaining a seller's permit. It tells you how often and on which due dates your ecommerce sales tax filing will take place. Depending on your tax authority, you will usually file and remit taxes monthly, quarterly, or annually. 

Unfortunately, states aren't satisfied with just an overall amount of collected taxes. Instead, they would ask for the tax you collected per state, county, city, and other local areas with special taxes. 

Before you get floored upon tax remittance day, ensure you're fully equipped with this information. As previously mentioned, automated technology can help you filter out these details.

Let's say you have a tax permit in a certain county but didn't collect anything within a specific period. Still, you must file a sales tax return since it's mandatory. To do so, file "zero reports" or "zero returns" for compliance. 

Step 5: Keep Track of Tax Compliance Updates

The current sales tax policies for ecommerce won't stay the same forever. It's still developing, so expect changes in requirements and processes in the future. To avoid trouble with outdated sales tax activities, stay on top of changes concerning tax compliance.

Seek updates from the states where you're permitted to collect sales tax. You may regularly visit their website, social media or subscribe to newsletters, if any. If you have an accounting team or tax advisor, consult them about it. Additionally, always monitor your sales and stay alert when they exceed a certain threshold limit.

Hiring a Bookkeeping and Accounting Team

If you're still unsure whether you're collecting and filing your taxes correctly, you can ask the help of accounting or bookkeeping experts. Don't wait for your tax authority to assess your tax compliance, and avoid charging your customers the wrong amount in their purchases.

Hence, it is best to work with a trusted team of accountants to help you with the how-tos and management of sales taxes.

When tax management starts to take a toll on you, it's time to get help from experts. You might feel reluctant to pay an entire team and have them take charge of your company's financial work. We understand that, so we've enumerated the important things you need to know when hiring bookkeepers or accountants. 

Setting the Right Expectations

You must first understand their roles when hiring a bookkeeping or accounting team. Doing this lets you know exactly what you're paying for and avoid miscommunication during the collaboration. For example, bookkeeping and accounting tasks differ—bookkeepers conduct administrative tasks while accountants interpret and analyze financial data. 

Find out the specific tasks they will conduct. For example, in tax compliance, ask if they will help you prepare, manage, or submit sales taxes. Knowing this lets you picture the job distribution: which tasks fall under my care? Which tasks can I turn over to the team? 

Freelance vs. Firm

You get to choose between freelance or firm for tax management services. Each has different pros and cons, and you need to understand them to make a final hiring decision. For example, you have less control over freelancers, but they usually charge lower rates than firms.

Bookkeeping or accounting firms, on the other hand, have a fixed schedule and offer more personnel. While cost can be an issue, you’ll always have someone around to meet your accounting needs.

Area and Level of Expertise

Consider asking for the area of expertise of the bookkeepers or accountants you're hiring. No matter how good they can be, progress can become slow-paced and risky if they don't understand how your industry works. 

If they have working experience concerning your niche, things will be easier to manage and improve. In addition, look for their certifications, such as the American Institute of Professional Bookkeepers (AIPB) and Certified Public Accountant (CPA) licenses. 

Way of Communication

Whether or not you know much about financial management, how your accountant communicates with you is important. Without proper communication, your business is at risk of financial trouble. Hire someone or a company that complements the way you communicate.

If you need guidance on sales taxes, they must communicate complex matters in a way you can easily understand. Generally, they should not force you to act in any way without even listening to your opinions first. They might have good intentions for your company, but they should still respect your pace and adapt as necessary.

Technological Knowledge

Technology matters significantly in ecommerce tax management. Your ecommerce platforms should display accurate tax rates and process orders seamlessly. Thus, the accountants you'll hire should know the latest and most effective technologies in managing your finances.

Moreover, they should provide you with a demonstration of these tools. Ask them why they'd choose a particular ecommerce sales tax software for a certain transaction. Then, evaluate if their choices are valid, not overpriced, and are the latest, most efficient programs you can use.

Technology and Sales Tax Management

Since South Dakota v. Wayfair in 2018, businesses need to turn heads in not just one or two states but almost all of them. As a result, merchants spend up to 300 hours on tax management—isn't it natural to switch to automation now?

Some companies don't include tax management in their list of priorities, which can do more harm than good in the long run. As a seller, you should know that managing sales tax is a huge concern when not properly taken care of. In addition, you must be aware of the potential long-term consequences of incorrect tax compliance. 

To avoid that, you must switch to automated management. What are the benefits that await you in sales tax automation?

• Reduce half of the time you spend managing taxes 
• Prevent inaccurate tax payments more often (e.g., overpaying or underpaying)
• Submit reports and avoid potential penalties more often
• Make every working hour and effort more worthwhile

QuickBooks, A2X, Taxjar, Turbotax, and Hubdocs, are just a few of the most preferred tax management and compliance software today. When hiring bookkeepers or accountants, ensure they are familiar with such tools.

Sales Tax For Ecommerce Sellers: Tax Solutions With Unloop

With Unloop's ecommerce sales tax services, you can ensure seamless tax management and compliance for your business. We partner with accounting firms and Taxjar, a tax compliance company, to ensure accurate internet sales taxes on time. 

We accommodate you in every step you must take for sales tax compliance. Our action plans are as follows: 

• We identify where you have a sales tax economic nexus.
• We determine if you can abide by the tax laws of your state(s).
• We help register your business for tax permits.
• We set up your ecommerce platforms for automated tax rate adjustments.
• We help manage your tax filings. While we don't file tax returns (we're not a CPA firm), we work with CPAs who can file them for you instead.
• We monitor sales rates and tax compliance to help you stay on top. 

Whether you're a US seller on Amazon or Shopify, we have all the bookkeeping solutions ready. If you're serious about growing your business in the online marketplace, take this step with great courage and let us help you from start to finish!

Ecommerce is rapidly developing, and so are the states adapting to the Wayfair rule. In the constantly changing chain of tax systems, you must keep pace with the changes to achieve proper tax compliance. 

Once you understand how things work, implement solutions that help you make the work manageable. Hire the right people, use effective tools, and stay on top of your growing ecommerce sales. Book a call with us 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.

With countless accounting software options in the market, choosing the right one that suits your business needs can be daunting. Xero has long been a popular choice for many entrepreneurs. But if it’s not the right fit for your business, it’s time to find a Xero alternative. 

In this blog post, let’s dive in and discover why QuickBooks has emerged as the best alternative to Xero in 2023. We’ll also explore other accounting solution options for your business. 

Xero: An Overview

Xero is a popular cloud-based accounting software that simplifies how you manage your business finances. It suits small- and medium-sized businesses. Xero accounting software makes it easy for businesses to pay bills, accept payments, track projects, and more. 

Here are the benefits and drawbacks of using the Xero accounting solution:

Benefits

• Unlimited users on all plans: Xero offers unlimited users even on its lowest-tier plan. 
• Project and time tracking: Xero’s Established Plan allows users to track their time on tasks and invoice them into a project. 
• Documentation management: Xero provides seamless integration with Hubdoc, which extracts and uploads data from bank statements and financial documents based on user-defined rules. 
• Financial reporting: Aside from billing and invoicing capabilities, Xero also provides accounting and financial reporting tools. 

Drawbacks

While Xero offers a range of useful features, it has certain limitations that make some businesses switch to other accounting software: 

• Limited invoices: Xero’s lowest-tier plan has a limit of 20 invoices and five bills per month. 
• One organization per account: Each subscription is limited to one organization. So, if you have multiple businesses requiring accounting services, you’ll have to purchase separate subscriptions for each one. 
• Limited multiple currency feature: Xero’s multi-currency accounting capabilities are only available on its highest-tier plan. 
• Limited customer support.: Xero doesn’t have a phone number where you can directly call them if you have concerns with using the software. 
• Involves a learning curve: If you’re new to using accounting software, learning how to use Xero might take a while. 

QuickBooks Accounting Software at a Glance

Now that you’ve read the general overview of Xero accounting software, let’s get to know its best alternative, QuickBooks. 

The software’s useful functions, like the readiness for auditing and data security (via cloud accounting), all happened because of the demands of professional accountants. 

Today, QuickBooks accounting software is one of the most trusted accounting tools. If you are thinking about Xero accounting software, both are equally as popular, but QuickBooks is more patronized in the US. 

There are also slight differences between the two, so if you’ve tried a Xero subscription and need an alternative—QuickBooks is the best choice.

Advantages of QuickBooks Over Xero

Here are the advantages of QuickBooks over Xero accounting software: 

Offers a More Intuitive Interface

QuickBooks has a reputation for providing a user-friendly interface that can benefit you when managing your accounting tasks. Its intuitive design makes navigating and performing actions such as creating invoices or processing transactions easier.

Another reason for QuickBooks’s intuitive interface is its focus on catering to small business owners without an accounting background, while Xero was specifically designed with accountants and bookkeepers in mind, making it more suited for their needs.

Suits Small Businesses

Xero is also a good accounting solution for startups as they offer competitive pricing for their plans starting at $13 per month. However, Xero compensates for its lower pricing with limited features. 

If you’re a small business and keep your costs low, you might spend more as you upgrade to a higher plan with advanced features. On the other hand, QuickBooks might cost a bit higher than Xero’s tiered plans but offers stronger features on its plans. 

For example, in QuickBooks Online, users can claim expenses and match them to photos of receipts across all plans. Meanwhile, Xero requires using “Xero Expenses,” an additional feature available in the Established plan, to enjoy the same capability.

Aside from invoicing, QuickBooks also offers other financial management capabilities such as bank reconciliation, income and expense tracking, and more. 

Scales Better

QuickBooks can scale better than Xero as you grow your business. Its offers with every plan increase, and the differences are apparent. In software like Xero, the costs you need to pay increase with minimal differences in plan offers.

Some key differences and additions you will notice with each plan are the following:

• Increase in the allowed number of users
• Inventory management
• Time tracking capability
• Profitability check
• Advancing of reporting and analytics capacity
• Adding your accounting team
• Automation of workflow
• Data restoration

With every dollar you add as you upgrade your plan, your growing business's accounting needs will be well-assisted. 

Unlimited Invoices

Unlike Xero, you are not limited in the number of invoices you can issue using QuickBooks. This flexibility helps you stay on top of your billing, regardless of the volume of transactions your business handles. 

This feature also enables you to adapt to fluctuations in demand without worrying about hitting an invoicing limit. 

Better Customer Support

QuickBooks is known for its excellent customer support, including offering users live phone and chat support. Quickbooks also offers 24/7 customer support for its Advanced plan users. On the other hand, Xero doesn’t offer telephone support but will call you if you provide your contact number. 

Live phone and chat support makes a significant difference for business owners, especially when they need software assistance. 

Other Xero Alternatives

Should you switch to QuickBooks? Switching to an accounting solution requires you to be updated with the accounting software market. If you haven’t decided yet, here are more accounting software alternatives to Xero: 

Zoho Books

Zoho Books has basic accounting features like invoicing, expense tracking, estimates, online payments, automated workflows, and advanced reporting. This software is better than Xero as it comes with a free plan, unlike Xero, which only offers a 30-day trial. 

Here are more reasons Zoho Books stands out as a better alternative to Xero:

• Excels in payment gateway options by supporting PayPal, Stripe, Square, WePay, and more
• Offers robust inventory management features (which aren’t Xero’s core functions)
• Clients can collaborate directly on invoices and estimates through Zoho’s client portal
• Nonprofit organizations get a 15% discount

Wave

Wave Accounting is a free accounting software designed for small businesses. With its easy-to-use interface, Wave simplifies tracking income and expenses, generating reports, and managing receipts. 

Like Xero, Wave also has a mobile app dedicated to invoicing, allowing you to manage your finances while on the go. This free accounting software also offers unlimited invoicing compared to Xero’s lowest-tiered plan, which offers only 20 invoices per month. 

However, Wave lacks advanced accounting features such as inventory management, third-party integrations, and more. 

FreshBooks

FreshBooks is another popular alternative to Xero. It suits freelancers and independent contractors but also fits small businesses’ needs. 

FreshBooks offers comprehensive accounting features such as invoicing, client and project management, billable time tracking, and more. It also provides accounting tools like balance sheets, accounts receivable and payable, among others. 

However, FreshBooks doesn’t offer access to unlimited users. You have to pay extra costs if you’re adding more team members. It also has fewer customization options compared to other accounting software. 

Get Assistance in Using QuickBooks Here at Unloop!

If you are a Xero user and well-versed in how to use Xero for small business accounting, you must have seen the software’s strengths and areas for improvement. But if you are still searching for an alternative, you can try QuickBooks. 

This software is worth a free trial or an initial investment because of all the features you can enjoy. What’s perfect about QuickBooks is that its offers increase drastically as you grow your business. 

If you want to learn more about the software or need assistance in your business accounting, Unloop can help you. QuickBooks is the leading accounting software we use, and we have a team of expert bookkeepers to assist you with the accounting software. Book a call with us, and let’s discuss your bookkeeping and accounting needs today!

These days, conveniently running a business is just within every business owner’s fingertips. A business owner can connect with bookkeeping and accounting firms online for financial management. And these agencies can offer complete solutions from keeping books up-to-date, business planning and forecasting, payroll, income taxes, sales taxes and more! But despite having this assistance, it still pays when business owners like you know bookkeeping and financial accounting—even just the basics.

In this blog post, we’ll help you understand what income statements, balance sheets, and cash flow statements are. It is important that you still know what these reports are for and the jargon that comes with them, even if you’re getting assistance from a bookkeeping and accounting firm.

Understanding an Income Statement

An income statement, also called profit and loss statement, is just one of the many reports you’ll get to know your business performance. An income statement shows whether your business is profitable or not. Profitability is when your business has a higher income than all business costs. If you check your income statement, you’ll see a long list of details, which all contribute to knowing your business’s profit. The details are as follows:

Operating Revenues: A company’s earnings from selling goods and services.

Cost of Goods Sold/Cost of Sales: For manufacturers, this is the money used in creating products. For retailers and wholesalers, this is the cost incurred to acquire the products they sell from suppliers.

Gross Profit: You can calculate your gross profit by deducting COGS/COS from the price of your products or services. 

Operating Expenses: These expenses include the money you use to pay office rent, payroll, employee benefits, and insurance. Marketing and advertising expenses are also included here. The total operating expenses are costs that must be paid to ensure smooth business operations. 

Operating Earnings: You can get your operating income by subtracting operating expenses and depreciation from a company’s revenues.

Non-Operating Income: These items bring income to the company from sources other than sales. Non-operating items include dividend income, interest income, and money earned from selling assets.

Earnings Before Taxes: As the term suggests, this is your business's income before deducting taxes.

Net Income/Profit Margin: When all costs, total expenses incurred, and taxes are deducted from the company’s earnings, you’ll get your net income. This item defines whether your business is profitable or not.

Making the Most of the Report

Understanding an income statement is essential for all business owners. To make the most of the report, check your net income. Apply the 5%, 10%, and 20% rules to see whether your business is going well or needs a little push. A 5% profit margin is low, so you must set game plans to increase sales and lower expenses. A 10% profit margin is a good start if you have just begun your venture. Still, aim for the 20% and up margin—a percentage considered high or good.

To validate or negate your assumptions, you can check out the income statement’s notes added by your accountant. Accountants are trained to do financial analysis, so you’ll find their insights helpful. You can also get into the details and see which expenses are hurting your business, and check if there is a chance of lowering them.

Don’t forget to do a comparative income statement analysis from one particular period to the next. It is a usual practice to compare the latest and the previous year’s income statement. But for startup businesses, you can analyze income statements more often, so you can see how your profit is doing and if there are changes you need to make with your business plans to reach your profit mark.

Knowing What a Balance Sheet Is

To know your company's assets, liabilities, and shareholder’s/owner’s equity, the report you need to check is the balance sheet. These three details in the balance sheet reflect your company’s net worth and can also be used to know whether you can pay your financial obligations. 

To understand this report better, let’s check what net worth, assets, liabilities, and shareholder’s/owner’s equity mean.

Net Worth: You can calculate your business net worth by deducting liabilities from assets. Net worth, also called net wealth, shows your company’s value.

Assets: Assets may be a single category in the balance sheet, but they can be further broken down into different details to pinpoint where your company's money is coming from. Some company assets are the following:

• Cash you have
• Accounts receivables or the cash you have yet to receive
• All the items in your inventory
• Expenses you’ve paid in advance
• All equipment and machine used to manufacture your products
• Investments
• Intangible assets like copyrights, patents, licenses, and goodwill

Not all these assets are in cash form, but they all add value to your company assets.

Liabilities: This is the money that you owe to people, organizations, or suppliers. Some examples of liabilities are the following:

• Utility bills
• Payment for raw materials
• Employee wages
• Debt payments
• Dividend payables
• Loans
• Mortgages

These liabilities can be paid in the short-term or long-term, but they will cost you one way or another.

Shareholder’s Equity/Owner’s Equity: Shareholder’s equity is the difference you get when liabilities are deducted from the assets. It is the money you, shareholders, or stockholders will get from all liquidated assets minus liabilities. If you are the sole proprietor of your business, you’ll get the owner’s equity.

Making the Most of the Report

There are a lot of insights you can get by analyzing a balance sheet. To begin with, you’ll know your business’s financial performance in terms of the amount of money you’ve earned or your profit through the shareholder’s/owner’s equity. The shareholder’s/owner’s equity can be positive or negative.

Positive equity is when your assets are higher than your liabilities. This means that you can finance your business operations and pay off costs or debts. When your liabilities exceed your assets, this is negative equity. You can adjust your business plans accordingly when you see your business is failing and maintain the best practices when you get good results.

You can also use this report during an investor’s presentation. Through this report, the investors can see where your money for business operations comes from and on which liabilities they are being spent on. They’ll also get an idea of what they’ll get based on the past balance sheets you provide. A positive shareholder’s equity will entice them to invest.

Learning About Cash Flow Statements

As the name of this report suggests, a cash flow statement shows how money comes in and out of your company. This statement has three main parts that will allow you and investors to see the details of how you spend and earn money. Here they are.

Operating Activities: As the name of this section implies, this is the money that comes in from sales, services, and regular business operations. It also tracks the money that goes out through accounts payables, tax and interest payments, and employee salaries.

Financing Activities: If you want to see how your business money moves around you, your investors, and creditors, check the cash from financing activities. This part shows the money that comes in from investors and banks and the money that goes out to be paid to debts and loans, to shareholders’ dividends, or to stock buybacks.

Investing Activities: The money you earn and give out in investing is included in this section. Some investing activities are loan creation and collection, asset acquisition and selling, and purchase and selling of fixed assets.

Making the Most of the Report

A cash flow statement shows how your company earns and where the company’s earnings are spent. It also reflects that the company has enough cash to pay business expenses. 

An excellent looking cash flow is when all expenses are paid, and there’s still money left. This is called positive cash flow, a situation where there is more incoming cash than outgoing. On the other hand, a negative cash flow is when more money goes out of your business than what’s coming in.

It is important to note that a negative or positive cash flow doesn’t always reflect your company’s profitability. There may be times when cash flow is negative because you’ve invested in scaling your business, so it doesn’t mean that your business isn’t profitable. In the same way, cash flow may be positive because of borrowed credit and not because the company is profitable.

Financial Statements Assistance From Unloop

Income statements, balance sheets, and cash flow statements are three of the most important financial statements you’ll need to get regularly. These reports will be your basis for business planning and decision-making. When looking for investors, these are the reports you can present to show your capability to run and make your business thrive. 

And if you ever need additional cash, these documents must be shown to creditors. And as a part of your business owner's daily routine, you can check these financial statements daily to stay updated.

When you understand these reports and the details within, it is easy to connect with the bookkeeping and accounting firm you are partnered with. During the reporting period, you’ll understand your company's financial health.If you are still looking for a reliable firm to partner with, Unloop is here for you! We have qualified professionals who can handle bookkeeping for your business and generate these reports. Contact us now for a detailed discussion of our services.

Understanding your business finances is the key to managing your business properly. Business cash flow dictates business operations. You should have sufficient balance to pay your obligations such as wages, taxes and suppliers, while ensuring that a good amount comes into your business for a positive income.

The amount of money coming in and out can make or break a business. In this article, we'll talk about the difference between cash inflow and outflow and tips to help manage them to maintain positive overall financial health.

Cash Inflow vs. Cash Outflow: Why They Matter

The net amount of money entering and leaving your business is known as cash flow. It disregards the funds in your bank account and credit from suppliers. Cash flow also does not count the money that other businesses owe you. Cash flow is plainly the cash coming and leaving your business in a certain period: weekly, monthly, quarterly or annually.

Understanding business cash flow is crucial. It lets you see if you have enough resources to pay for your business operations—like rent, supplies, employee wages, and other operational costs. Business cash flow also helps your business grow. Investors and banks use cash flow statements to assess your overall financial health and see if you can be eligible for loans and investments.

Types of Cash Flow

There are three ways that money enters and leaves your company. To help you better comprehend each of them, let's look at each one in more detail.

Operating Activities

Operating cash flow is money that comes in and out of your business through basic business operations such as creating sales or providing services. Inflow from operating activities is the net income you make from selling your products or service, inventory and accounts receivable.

Cash outflow is related to operating activities where you spend resources on the cost of production, rent, marketing and advertising efforts, taxes, and employee salary.

Investing Activities

The money that passes throughout your business as a result of the company's investment is known as cash flow from investing activities. A company can have short-term or long-term investments. For example, getting government-issued bonds like bills and floating-rate notes are short-term investments.

Buying new equipment or purchasing a building to house your business is a long-term investment for businesses. The money you used to buy these investments is considered outflow. Cash outflow is more common in investing activities.

Financing Activities

Cash flow from financing activities include stock sales, loans, dividend payments, and long-term debt payments. Cash inflow in this category is the money you receive when you apply for loans and the ones you generate from selling stock and equity.

Cash outflow in financing activities is money you use to repay the principal amount of existing debts and dividend payments.

What is Cash Inflow?

Cash inflow is the money coming into your business. Simply put, cash inflow is all the money that goes into your business, whether from investments or selling your products and services. When the cash inflow for your company exceeds the cash outflow, you have a positive cash flow. 

A positive cash flow guarantees that business operations can run smoothly and without problems. It is a good indication that you have enough resources to keep your business operations running, and that you can allocate some of them toward business growth.

What is Cash Outflow?

Cash outflow is the money moving out of your business. The money you use to pay for your business to continue operating is outflow. Rent, wages, operating costs, buying inventory, and interest payments for the loans you borrow are all outflows.

Startups and new businesses may experience more cash outflow in the beginning. Since all their resources are used to launch the business, more outflow is expected. However, once you start selling, you can break even and generate more cash inflow.

Tips To Help Maintain Positive Cash Flow

When you have been running your business for quite some time, and your cash outflow is still greater than the inflow, it is an indication of negative cash flow. This can be the start of the downfall of your business.

But it's not too late! We have some tips to help your business generate positive cash flow.

Get Deposits for Long-Term Projects

It's always good for a business to take on long-term projects with big payouts. But when a project is spread over a long period of time, the more difficult it is to pay bills to enable the project to continue.

Ask for a deposit and establish milestones to avoid burning out your resources. The initial deposits will help you buy the materials you need, and the milestones will allow your clients to see your progress and keep cash flow consistent.

Consider Raising Your Prices

One way to keep a positive cash flow is to increase your prices. If you're worried you'll lose clients with a price increase, you can experiment with it. For example, you can sell products for higher prices to new customers and retain the price for your returning and loyal customers.

You can also increase the price for some of your products and retain the original price for others so your customers won't be perplexed by the price changes while you keep a positive cash flow.

Negotiate With Suppliers

Sales and revenue are just one part of a business's cash flow. You can keep a positive cash flow by controlling your expenses. Negotiating with suppliers can be advantageous to business owners. For example, bulk ordering supplies can give you discounts.

You can enjoy free or discounted shipping rates if you order from suppliers in your locality. Negotiating with suppliers can lessen your expenses, equating to an improved and positive cash flow.

Use Technology To Reduce Production Costs

Many business owners think that investing in technology is an unnecessary expense. Technology is advancing rapidly, and some are designed to reduce production costs. There are pieces of machinery that can do what humans do. Technology can do tasks faster and more efficiently which means you can hire fewer people—saving your payment on wages and other expenses.

Look for technology that will make your production more efficient. However, always consider its price. If you're buying a piece of equipment, ensure you have enough resources to purchase it, and that it will not affect any of your business operations.

Managing Cash Flow With Unloop

Now that you are aware of how vital business cash flow is, managing it properly should be on top of your list. If you're new to the business and are still confused about how cash flow works, Unloop is here to help you.

Unloop offers professional ecommerce accounting services, and organized bookkeeping is the key to getting an overview of your business cash flow status. Our bookkeeping services include:

• Generating monthly income statements, balance sheets, and cash flow statements.
• Preparing necessary financial statements using accrual accounting methods.
• Linking your business to accounting systems such as QuickBooks and Xero.
• Creating custom KPIs and analytics tailored to your business.
• Providing unlimited support through Slack.

Cash flow is just one part of running a business, and we hope this blog post gives you a better understanding of your finances. For more professional accounting help, book a call and work with Unloop 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 revenue from e-commerce retail sales in Canada has seen an upward trend since 2017. According to Statista, from $28.59 billion in 2017, it rose to $62.12 billion in 2023. The data company forecasts this upward trend to continue until 2027, with predicted revenue of $94.14 billion. 

Behind these numbers are millions of eCommerce sellers like you who have ventured into the industry and opened businesses to fellow Canadians and customers worldwide. If you just began 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.

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. 

Goods and Services Tax

The Canadian government mandates a federal tax called the GST which it levies upon all states. The GST comes at 5% of the sale price. The rate will still increase when PST or QST is added. GST is applied to almost all products sold in physical stores and online. Only those tagged as zero-rate are exempted from this taxation. 

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

Provincial Sales Tax

The provincial sales tax, on the other hand, is a local sales tax working in combination with the GST. For example, if the GST is 5% and the PST is 7%, the Canada Revenue Agency (CRA) charges businesses a 12% sales tax. However, not all provinces have a PST. Some provinces charge only GST, while others apply the Harmonized Sales Tax (HST).

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

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

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

An amount of $3.60 sales tax will be collected and remitted during tax season. 

Harmonized Sales Tax

In place of the GST and PST, certain provinces opt for a harmonized sales tax. Aside from Ontario, participating provinces follow the same HST rate, which is a standard 15%, while Ontario uses 13%.

Lawmakers have passed the harmonization of the two through HST to skip the hassle of separately computing federal and provincial taxes. When you make sales from these provinces, you do not need to look for the GST and PST rates; apply the HST rate. 

Five provinces, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island, follow this taxation system, and the rates vary per province.

Quebec Sales Tax

Quebec's PST is called the QST. Quebec is the only province to differ among all provinces that use PST with a sales tax rate of 9.975%.

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 supplier that does not reside and does not have a physical store in Quebec supplies products to Quebec businesses. In this case, they should only charge their customers with the 5% GST. On the other hand, sellers must charge GST and QST for individual orders delivered to Quebec residents.

Businesses Who Need To Pay Taxes in Canada

Whether you are a new resident, a maple leaf-loving local, self-employed, or a business entity, understanding your tax obligations is crucial to maintain compliance with the Canadian tax system. In Canada, here are the businesses that need to pay taxes.

Small Businesses

Canadian businesses follow the “small supplier rule.” In this rule, if you qualify as a small business that makes less than $30,000 in annual revenue on taxable supplies, you're not required to open a GST/HST account. Collecting and remitting sales taxes is unnecessary for you.

However, most provinces under PST don't cover provincial sales taxes for small suppliers, so while you don't have to pay GST or HST, you might still have to pay the provincial portion regardless of your sales volume.

Foreign Businesses

Originally, the federal government did not require businesses not physically based in Canada to collect and remit Canadian sales taxes. However, new tax policies put Canadian businesses at a disadvantage since their prices would be higher.

Because of this, currently, foreign businesses must pay the GST/HST rate and the PST if their total revenue surpasses $30,000. Foreign businesses or non-residents are not required to be physically present in Canada. They must voluntarily register with the CRA and provide personal solutions to determine where their customers live and what taxes apply to their purchases.

Reminders on Canada Ecommerce Sales Tax

Taxation is undeniably complex, and the different sales taxes in Canada make it more overwhelming. With that, here are some reminders to help you know how much to pass on to your client or whether to charge them or not. 

You must also know the department where you must submit your collected sales tax. So, keep reading!

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 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 differ on who should pay taxes and who is exempted. 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 most individuals must pay taxes for their purchases, some products are zero-rated and customers tax exempted.

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

Remember not to apply sales tax if you sell these goods or to these groups. 

Understand the Importance of a Tax Exemption Certificate

For individual orders, 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 collect taxes from your buyers. 

Whether 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 understand and abide by the specific ecommerce sales tax rules per province. 

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. 

Steps in Managing Your Sales Tax

Managing sales tax in Canada involves several crucial steps to ensure compliance and smooth operations. From understanding the different tax rates in various jurisdictions to computing, collecting, and remitting taxes, this guide outlines essential steps to navigate the complexities of Canadian sales tax.

3 Ways to Pay Sales Taxes in Canada

Tax time can be stressful for business owners since calculating and filing taxes can get very complicated. Fortunately, the Canada Revenue Agency has provided three easy ways to pay your sales taxes.

Electronic Payment Through MyPayment

Nowadays, it's becoming less popular to go to the bank for all your transactions physically. Different financial institutions are normalizing electronic payment methods, and it's also become a reliable payment method for the Canada Revenue Agency. 

The Canada Revenue Agency devised an online payment system called MyPayment. Check the CRA's website to see the specific guidelines for MyPayment.

Payment Through Financial Institutions

Despite the rising popularity of electronic payments, bank runs aren't going out of style yet. To pay through financial institutions, fill up a form called “Form RC158 - Remittance Voucher,” which you can only get from the bank since no soft copies are available online.

Should you need to make other tax-related payments, financial institutions also provide the following forms:

• Form RC159, Remittance Voucher - Interim Payments
• Form RC160, Remittance Voucher - Amount Owing
• Form RC177, Remittance Voucher - Balance Due

If you plan on paying with foreign currency, you'll have to apply the current exchange rate to your remittance and pay that.

Payment by Mail

If the other two payment options don't work, you can always go old school and remit your sales taxes through snail mail. The Canada Revenue Agency can accept payments via mail or courier, but you'll have to keep the amount below $50,000. 

Otherwise, you'll have to pay either electronically or through a bank.

Repercussions of Not Paying Taxes

Taxes are every business's responsibility; staying in business means paying taxes without error. Not filing your taxes or even filing them improperly, like miscalculating or failing to declare some expenses, could lead to serious repercussions for your business. It could lead to legal battles and, in serious cases, jail time. 

Here are a few examples of tax crimes all businesses should be wary of.

Tax Evasion

Generally speaking, tax evasion is failure to pay taxes. The worst businesses intentionally commit tax evasion by undervaluing their taxable assets or not reporting taxes at all. You can get more jail time from tax evasion than tax fraud.

Tax Fraud

Tax fraud, on the other hand, is simply misreporting your taxable assets. Sometimes, people confuse which assets are taxable and allow themselves to be willfully blind to avoid reporting such assets. Assisting people in committing these acts is also considered tax fraud.

Ways to Make Sales Tax Collection Easier

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

Having a team of experts looking at your tax returns is important so you won't make any mistakes regarding your taxes. Here are the ways to make sales tax management easier.

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 to help you make decisions. 

Hire a Bookkeeper

Delegate bookkeeping to a trained bookkeeper to ensure the proper tracking and categorizing all transactions. An experienced bookkeeper will update your books timely and ensure data accuracy while you focus on business operations, product quality checks, and customer service.

Get Accounting Assistance

Taxation is an essential task that can determine your business's success or failure. Thus, it is best to have someone well-versed in tax laws and regulations like 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. 

Get Assistance for e-Commerce Tax for Canada from 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. You can be a responsible seller by collecting the correct sales taxes as mandated by the Canadian government and remitting them on time. If you ever need assistance in this area of your business, 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. Book a call with us now. We'd love to hear from 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.

Starting up or scaling a business is a high-risk, high-reward situation. You need to manage your finances to get your business off the ground. But thanks to accounting software, accounting tasks are now made easier. We know you want the best for your financial needs, so you’re most likely contemplating Sage 50 vs. QuickBooks. 

These two accounting software solutions are better for your business’s bookkeeping and accounting needs. But which one suits your needs best? Explore the features, prices, and benefits of having Sage 50 and QuickBooks to see how the two fare against each other.

How to Choose the Best Accounting Software for Your Business

Both developed during the 1980’s, Sage 50 and QuickBooks have been proven to provide solid accounting and financial software. Unfortunately, business owners find it hard to choose between the two. 

Before exploring the advantages and significant differences between Sage 50 and QuickBooks, here are a few helpful tips to help you select the right one for your business. 

1. How Much Does It Cost?

Check the prices of different packages. Doing this will help determine if the software package or bookkeeping program fits your business needs. 

You should also know how much you are willing to invest in the software. For example, small business owners might be fine with introductory accounting solutions that can deliver basic accounting needs and inventory management at an affordable price. 

Meanwhile, established businesses may be looking for accounting software that is inherently cloud-based and offers robust inventory management, even if it is expensive. 

2. What Accounting Features Does It Have?

Most software comes with accounting features small businesses need, like basic inventory management, invoicing, expense tracking, and an easy-to-use balance sheet where you can see your accounts payable and other financial records. 

Some accounting software solutions may also offer expense management and money management. They even have drag-and-drop functionality, allowing accountants to finish their accounting tasks more efficiently.

On the other hand, big companies may need advanced software packages that can manage more than just creating financial reports. They need accounting software that handles overall business and cloud-based project management.

3. Does It Provide Convenience?

Convenience plays a critical role in accounting. Financial transactions require keen attention to data, analysis, and recording. So, if your accounting department has many accountants and bookkeepers, you should assess the usability of the accounting software package you will use.

Usability is a key term in software testing that refers to how easy and user-friendly a software is. An intuitive interface not only enhances user convenience but also streamlines financial processes. This improves productivity within the business, which is why it’s important.

Aside from usability, check if the software offers remote access. This feature protects your business better against hackers and corruption, especially if the files are saved on a computer or printed on paper.

4. How Well-Protected Are You and Your Business?

Check how secure your accounting software is. Research its accounting functions, financial reporting processes, and how it stores and retrieves financial information. The overall safety of your business relies on the software you want to purchase. So, choose a provider you can trust.

Which Accounting Software Is Better for My Business?

Now that you know how to find the best accounting software, let’s see which accounting solution is right for your business. Below are the two most used accounting software by pioneering and modern business owners.

Introducing Sage 50

As one of the largest accounting software companies, Sage accounting software simplifies business transactions through its innovative financial management system. From there, any enterprise can accomplish various accounting tasks:

• Generating reports
• Balancing cash flow
• Approving payments
• Simple invoicing
• And more. 

Sage 50 has proven itself to be an outstanding accounting tool over the years. In fact, there’s now Sage 50 cloud, bringing in more advanced features and cloud connectivity no matter the size of your business. 

Introducing QuickBooks

QuickBooks is a leading accounting solution worldwide, providing tools and functionality, from financial statements to payroll management. 

For over 20 years, QuickBooks has been the prominent accounting platform, dominating the business management software market. The QuickBooks user interface is easy to use, study, and navigate.

Many rely on the functionality of QuickBooks for small, mid-sized, and large businesses. They offer distinct features and benefits along with QuickBooks essentials, such as:

• QuickBooks Payroll
• QuickBooks Desktop
• QuickBooks Online

Whichever you choose, QuickBooks has cost-effective, reliable, and time-saving perks for your business.

The Comparison: Sage 50 vs. Quickbooks

Even if Sage 50 and Intuit QuickBooks are two of the leading accounting software in the industry, one will always be more suitable for your business than the other. So, how do you identify which software meets your business needs? Sage 50 or Quickbooks?

Here’s a comparison to help you decide:

Sage 50 vs. QuickBooks Online Pros and Cons  

There are definitely upsides and downsides to investing in Sage or QuickBooks. It is all about choosing what advantages work best for you and what disadvantages are manageable. 

Sage 

✅Affordability: A great option for businesses on a tight budget, given that a Sage plan has unlimited user accounts and cash flow forecasting. 

✅Customer Support: Sage comes with self-service resources and support via phone, email, and live chat, which is useful if you don’t have an accounting background.

✅Scalability: Though it lacks accounting features for small businesses, the Sage system has amazing inventory management and collaboration tools that many large-scale business owners appreciate. 

❌User-Friendly: Easy to navigate, that’s for sure. However, using it would be stressful if not properly set up.

QuickBooks

✅Third-Party Integration: We will be straight to the point—QuickBooks provides more third-party integration than Sage. QuickBooks can be integrated with over 700 apps, while Sage only offers up to 40. 

✅Advanced Features: QuickBooks offers more premium features than Sage. For instance, QuickBooks offers on-demand online training, automated revenue recognition, and richer CRM and ERP features that Sage doesn't offer. 

✅User-Friendly: QuickBooks users can attest that using the software is so easy that even a 12-year-old can do basic accounting. That’s how simple its interface is. 

❌Affordability: Given that it has high-end features at low-tier plans, it is only reasonable that QuickBooks plans would cost you a bit monthly. 

Online Price Comparison

Now, let’s talk about the pricing. Both QuickBooks and Sage software offer multiple monthly or annual subscription plans.

Sage 

QuickBooks Online

So, Which One Is Better for Your Business?

If you are still coming up with the right reasons to buy one of these accounting software, both QuickBooks and Sage 50 have unique functionality that can benefit your business. 

QuickBooks is the best accounting software if you own a start-up, small business, or small to mid-sized business (SMB). It focuses more on bookkeeping and accounting. 

But if you own a large business, like ecommerce, manufacturing, or real estate, Sage 50 is more suitable for you, especially when you need industry-specific features and functionality. 
Need more help settling your small business’s finances? Unloop can help you take control of your books. Book a call with us and let our excellent team of financial experts save you from bookkeeping-related headaches.

We cannot overstate the importance of bookkeepers in businesses. When an accountant is absent, they perform tasks to fill in the gap. The bookkeeper’s job generally ranges from recording financial transactions and documenting payrolls to making financial statements and more.

The main objective of a bookkeeper is to remain transparent and ensure that employees and employers alike are updated about the company’s financial landscape. That being said, we want to help you understand the value of bookkeeping services, how they handle the financial decision-making of the business, and what values a successful bookkeeper possesses.

If you are an online seller without a background in financing, this is your chance to look at bookkeeping in Mississauga. Read on and find out more!

Importance of Mississauga Bookkeeping Services

Financial information is an important variable that determines how individuals and organizations operate. Without monitoring your business’s financial resources, there is no way to fund your projects such that you can profit from them.

For this reason, businesses hire bookkeepers, particularly start-ups that cannot yet afford a licensed accountant. Wherever you go, bookkeepers will always be around, providing financial suggestions to different workplaces such as the following:

• Financial institutions
• Nonprofit organizations
• Government agencies
• Private investors
• External users
• Academic institutions
• Law firms
• Other organizations

Bookkeepers are highly relevant and in demand for businesses that desire gradual but steady growth. Bookkeeping services in Mississauga also focus on evaluating and providing an overview of financial data for their respective companies. If you are fully aware of your business’s financial direction and complete transaction history, you owe this to bookkeepers.

Here are more reasons why bookkeepers are essential and why companies should appreciate their work:

• Bookkeepers record and store financial reports.
• They assist in the legal records of employees.
• They provide reliable data on team performance.
• They share ideas to make strategic business choices.
• They help in processing accounting bills.
• They present the business’s income goals and revenue.
• They take note of the company’s tax agent adjustments.
• They ensure that the company avoids penalties.
• They free up your time so that you can work on the business better.
• They take charge when accountants are unavailable or away.
• They minimize the possibility of fraud during a transaction.
• They conduct an ongoing auditing and assurance process.
• They record every penny spent by the company.
• They support your business’s daily operations and systems.

Mississauga Bookkeeper Responsibilities

Now let’s talk about the broad process of bookkeeping. How do bookkeepers stay organized despite many expectations set on them? Which ones do bookkeepers do first?

Generally speaking, bookkeepers schedule the different bookkeeping processes they undertake. There are six particular bookkeeping and administration services and processes that bookkeepers regularly monitor:

• Sales processes consist of sales orders, invoicing, receiving payment, and late payment follow-ups.
• Purchase processes consist of bills, purchase orders, supplier payments, and inventory management.
• Payroll processes consist of employee setup, running payment, superannuation reports, pay-as-you-go tax withholdings, and other employee entitlement matters.
• Banking processes consist of bank reconciliations, credit cards, point-of-sale systems, and transfers, among other things.
• Verification of accounting figures involves checking the correctness of automated accounting data and reconciling and validating business accounts.
• Reporting to the business owner involves submitting reports for the inspection, review, and verification of the executives or managerial team. They then discuss the results in a meeting on a monthly or quarterly schedule.

Despite the hectic responsibilities and backlogs, bookkeepers do their best to live up to workplace expectations. However, some bookkeepers can perform their job better than others because of their outlook and work ethics. Let us look more closely at the five characteristics that make bookkeeping business services successful.

Qualities of Successful Mississauga Bookkeeping Services

As it is, the role of a bookkeeper is not easy to fill. However, as technology steadily evolves, the nature of the job changes, so the objectives of bookkeepers should adjust as well.

Unfortunately, most bookkeepers’ problems are often related to the shift in focus and increasing use of advanced technology to get the job done. So what can a bookkeeper do to surpass these issues?

The key is to fit their job to what defines a good bookkeeper. Below are the five most important traits that determine a successful bookkeeper. These can transform many bookkeepers out there for the better.

1. They are open to any changes. A successful bookkeeper chooses to blend their profession with technological innovation. They follow the industry’s latest trends and use them to their advantage.
2. Their exceptional skills come from rigorous training. A successful bookkeeper has mastered the core competencies of bookkeeping. Their training makes them an irreplaceable asset amid the emergence of new accounting apps.
3. They appreciate the interpersonal aspect of bookkeeping. A successful bookkeeper values their relationship with their clients, employer, and fellow employees. They exhibit a memorable personality and active listening skills that set them apart from regular bookkeepers but keep them connected to their professional circle.
4. They broaden their professional horizons. Successful bookkeepers go out of their way to collaborate across all the departments in their workplace. They know when it is time to compete and when to cooperate, which elevates the company and the bookkeeping community as a whole.
5. They work efficiently with other people. A successful bookkeeper enjoys projects, tasks, and assignments that involve working with a team. They make the most out of this experience to acquire different business perspectives so that they can craft a financial plan that can enhance the current condition of the company. Aside from that, they’re great negotiators, teachers, and leaders rolled into one.

If you have a business in Mississauga, bookkeepers will always be important to you, regardless of your company size. When you think about it, the question you should be asking is, “What kind of bookkeepers should I hire?” instead of “Are bookkeepers important for my business?” Once you look at their profession from the value it adds to you, you’ll see what bookkeepers are more than capable of doing.

Did you learn anything new about Mississauga bookkeeping services? What is a successful bookkeeper to you? Share your insights by commenting below. We would love to hear from you!