Almost every business needs to file annual tax returns with the concerned authority of the country where they are doing business. The two months ahead of the final deadline for filing tax returns are usually the busy period for most companies. However, tax preparation and filing tasks should not hamper your usual business activities. As a small business owner, you cannot afford to stop selling products or earning revenues. One way to ease the tax season stress is by having an organized accounting system in place. This is exactly where cloud accounting services and tools like the xero accounting software can help you. Let’s find out how cloud accounting can make tax filing easier and less cumbersome for small and medium businesses.
Provides access to real time accounting data
Using the power of cloud accounting, you can generate your company’s income statement at any point of time in a year. You do not have wait until the last month in your tax season to know your profit and loss figures. With a clear picture of your sales and expenses, you can calculate your tax liabilities, and avoid getting any unhappy surprises only days before the last date for filing tax returns. You can review your profit and loss statements on a monthly basis, and respond to any issues well before the tax season starts. If you think it would help, you can even shift some of your business related expenses to the next tax year.
Helps classify expenses more accurately
Stay on top of your business accounting compared to your competitors. This will help you in a long run. Cloud accounting services and tools like the xero accounting software help avoid expense misclassification errors. In other words, cloud accounting enables you to record the right expenses in the right category for tax reporting purpose. For instance, if your employees make any business-related expenses during a business tour, they can enter that in your accounting system right away, using any mobile internet device. You can then review and approve that as a business expense. The best part is that your workers can report sales or expenses anytime and from anywhere, as long as they are connected to the internet. At the same time, you and your management staff get full control over how much access you want to provide to your employees. You can also check whether your employees are using their business credit cards only for business purpose.
Helps consolidate accounting data
One major benefit of using cloud accounting is that it brings all your accounting data to a single dashboard. Manually collecting and organizing all accounting receipts and invoices could be a daunting task. Cloud accounting makes it easy and quick to consolidate and validate your accounting data. This helps you avoid any last minute chaos during the tax season due to missing receipts or invoices.
Mostly, lack of preparation or information is to blame for your tax season woes. Using cloud accounting services and tools, you can have access to your updated accounting and financial data – which would make it simpler, quicker, and more convenient for you to file your annual tax returns.