As a business owner, you know that nothing is more important than your company’s financial information. You keep meticulous records and try to stay on top of every filing requirement from state and federal agencies. However, not all business owners realize that the right accounting software can help them protect against legal trouble as well as ensure their financial data is accurate.
Here are just a few of the ways accounting software can help you protect yourself against legal hassles.
It ensures you are keeping accurate financial records.
Maintaining accurate records is key to starting and running a successful business. Keeping track of all your income, expenses, assets, liabilities, customer information—all of it—must be entered correctly.
Fortunately, today’s accounting software makes it easy to do just that. As you enter transactions into your books, the program automatically calculates important numbers like balances and cash flow.
It also produces reports that summarize this information, making it easier for you to identify trends in your business so you can make informed decisions about where you are now, where you want to go, and how to get there.
It helps you stay on top of filing requirements.
Accounting software nowadays also doubles as a bookkeeping system that organizes, records, and files your expenses and income tax returns including information about your business.
This is especially important if your small business is ready to expand and hire employees. And it’s great because it means that each of these returns is just a few clicks away.
It helps you find legal deductions to save money on your taxes.
If you are an entrepreneur who has taken the plunge, bought the business license , and opened for business, then you know how expensive starting up can be.
Fortunately, many small business expenses can be deductible from your taxes, saving you money and helping you cut costs.
Accounting software automatically pulls together all of your business related deductions for the year to help you prepare and file proper tax forms so you don’t miss out on any potential savings.
It keeps track of employee wages and benefits.
Your small business may also have employees . If this is the case, you will need to keep proper records of their wages and benefits so you can report these expenses on their tax returns.
A good accounting software helps you do all this with ease by automatically generating W-2 forms, employee reports, and withholding reports in both paper and electronic form.
It alerts you to financial problems before they become legal problems.
Today’s accounting software may also help automate your business practices.
Then, if something seems out of place—such as an unusually high number of sales in a given category or customers with very low sales—the program can generate alerts that will help you keep track of your money and identify issues that might need your attention.
It makes doing taxes a snap.
Finally, small business owners know that filing yearly taxes for their companies is a hassle.
But today’s accounting software can make this process much easier by automatically generating all of the tax forms you need and importing the data from them into a single tax return. This way, filing your taxes with the IRS is simple, fast , and even fun.
Staying on top of your finances can be hard when you are busy running a business. But good accounting software makes it easy to keep track of all your income and expenses, stay up-to-date with filing requirements, find deductions that will save money on taxes, and keep track of your employees ‘ wages and benefits. It may even be able to learn the way you do business so if something seems amiss, it can give you an alert before it becomes a legal problem.