The Benefits of QBO's Automatic Sales Tax Feature

QuickBooks Online, also known as QBO, is an online version of the QuickBooks accounting software that can be used through a web browser. This makes it extremely convenient to use, but convenience isn’t the only benefit. For an eCommerce business there is another major benefit that could save you a lot of time, worry, and expense.

The software provides options including standard bookkeeping facilities for recording sales and expenditure, up to managing payroll for employees and the preparation of tax statements, ledgers, and reports. But perhaps the most overlooked feature included in QuickBooks Online is the sales tax feature.

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In principle, sales tax is easy to work with – every sale you make will be subject to the tax, and you just have to make sure it is added to the price of the items you sell. However, there’s a catch.

Not every state or jurisdiction uses the same rate of sales tax, and not every product is liable for sales tax. Many services are exempt from sales tax too, and purchases made across international boundaries may be subject to an entirely different kind of sales tax altogether – or even none at all!

By using the Automated Tax Center within QuickBooks Online, you don’t need to worry about it. QuickBooks will automatically ensure that the correct rate of tax is applied based on the customer’s address and the configuration of your products and services.

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But why is it important to keep track of the correct amount of sales tax?

First and foremost, it ensures that your customers are charged fairly. They wouldn’t want to overpay, and QuickBooks will make sure that they don’t. Secondly, and perhaps more importantly for your business, there is a legal requirement that the taxes you collect are paid on at least a quarterly basis.

Failure to pay the correct amount – or failure to pay anything at all – can result in penalties that vary by jurisdiction but can ultimately lead to fines and legal problems.

Therefore, collecting and paying the appropriate amount of sales tax is important for both you and your customers. Manually calculating these amounts is not for the faint-hearted, especially if you are selling to a different state or country.

QuickBooks Online makes the process simple and straightforward, which allows you to focus on running your business the best way you can. You don’t have to worry about any sales tax issues as QuickBooks takes care of it all.

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Bookkeep & Prosper

Here at Bookkeep & Prosper we specialize in outsourced remote bookkeeping with services starting at $315 per month. Response time is guaranteed with 36 hours or the next month of service is free. We take cyber security seriously using military grade systems for anti-virus, data encryption, and password management. Each month after closing out your books we will review the financial statements including the Income Statement, Balance Sheet, and Statement of Cash Flows so that you have a clear view of how your business is performing. If you do not yet have budget and budget review as a standard part of your business then we will work to create a budget over the course of the first year of service.

If you are reading this article then you want to get serious about your books. Why not start today by scheduling an introductory phone call with me, Conner Schryver, and see if Bookkeep & Prosper is a good fit for your company.

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