4 tax management tips for small business owners

Tax season can become quite the headache for small business owners without the right technology, tools and advice. Between scrambling to pull together all the right paperwork and understanding what’s required, you’re likely counting down the days to the deadline whether you’re submitting quarterly or annually.

By leveraging help from the right advisers, as well as cloud technology, you can make taxes more manageable.

Tip 1: Take advantage of cloud-based accounting software

With all your data in one place in the cloud, tax calculation is much simpler. Using the right combination of cloud accounting software and integrated tools will save you time and money during tax season and prevent reliance on spreadsheets or outdated software with old data.

Cloud-based software will do most of the work for you and, best of all, you can access it online from anywhere at any time – using a laptop or mobile.

In addition, file online so you don’t have to print and fill out any forms by hand. Some accounting software will even begin the preparation of tax files for you to make lodging your statements even easier.

Tip 2: Hire an accountant

Many small business owners shy away from hiring a professional accountant because of the fees but, once you try it, you may find their services invaluable. Professional accountants can give you great tax advice, save you time trying to figure it out yourself, and help you find great deductions you might not otherwise think to look for.

Tip 3: Proactively plan for taxes

It’s never too early to start thinking about your next BAS statement or tax return. Talk to your accountant about how you can budget for next year, use technology to stay better organised and get back to what you do best – running your business.

“We try to push our clients to do forecasts, budgeting, be proactive and forward thinking", says Bruce Phillips, CPA of HPC Accounting and Taxes in the US. This means you can actively plan before you get your tax bill. By leveraging real-time data from your cloud accounting software (E.g. Xero, Sage, Intuit QuickBooks) and advice from your accountant, you can fix many problems that may arise before taxes are due.

Tip 4: Think about taxes all year

Small business owners should be thinking about their taxes year-round, rather than in quarterly or annual rushes. Think about leveraging partnerships, like the one between Xero and PayPal, Intuit QuickBooks Online and PayPal, or Sage and PayPal, to stay on top of things.

“Taxes are one of the most significant expenses a small business can have, and yet they typically spend the least amount of time dealing with them,” Bruce says.

Connecting your PayPal account with your cloud-based accounting software means you’ll get accurate, timely financial information all year round. That will help you stay on top of and talk about your taxes before it’s too late.

When your payments feed directly into your accounting software, you can keep your accounts in order by reconciling them on a regular basis and ensure that your accounting information is up-to-date. Best of all, when your financial data is flowing into your accounting software, on one single ledger in the cloud, collaboration with your accountant is only a few clicks away.