by Grace Barone
Running a small business can be a fulfilling venture. However, amidst the adventure, one aspect that often dampens the joy of business owners is the dreaded task of dealing with sales taxes. The complexity of keeping track of all the different tax rates, ever-changing regulations, accurate and timely payments can become difficult to manage. Sales tax is an big stressor of many business owners. Luckily with advancements in technology, the overwhelming burden of sales taxes can now be automated. Reclaim some peace of mind, and refocus time and energy into driving more success to your small business. There is advanced automated sales tax software that can be access by small business owners directly through POS devices.
Basics of Sales Tax
Sales taxes is money collected from customers by businesses, when an item or service that is subjected to a sales tax is purchased. After its collection, businesses hold that money until it is reported and payed to the appropriate tax authority. Businesses are typically required to file regular sales tax returns. The frequency of when these need to be filed and payed range from monthly, quarterly or annually. This is depending on the jurisdiction and volume of sales. Each state and each county has their own rules and sales tax amounts.
Sales Tax Amounts
The sales tax rates are expressed as a percentage of the sale price of the goods or services. For example, if the sales tax rate is 8% and a customer purchases an item for $100, the business would collect $8 in sales tax from the customer and remit it to the tax authority. Not all items have the same percentage, some items don't have any sales tax and some items have additional sales taxes that need to be paid. For example, specific industries like alcohol, tobacco, gasoline, or lodging may have additional taxes imposed on their sales. Small businesses operating in these industries need to be aware of the special sales tax requirements that apply to their products or services.
Different Sate Requirements
In addition some states don't have any sales tax laws. Alaska, Delaware, Montana, New Hampshire and Oregon do not impose sales taxes. Hawaii and New Mexico have their own version of taxes that businesses need to pay when items are sold. Small businesses should know what items in their specific county and state are subject to sales tax and what percentage they need to be collecting for each. Here is a great resource where you can calculate your areas sales tax.
Paying your Businesses Sales Taxes
So as you can see, there is a lot of variables related to sales taxes, and that was just the basic run down. Paying your taxes is extremely important. Filing and paying correctly is crucial. Make sure you're well versed in your responsibilities as a business owner. Without an automated sales tax software, your options are to either hire a bookkeeper, which can be expensive. Or, do it yourself, and if you're not careful, you may make an error or not pay on time. The whole process of collecting and filing manually is very involved.
- Figure out and confirm sales tax collection responsibilities
- Apply for sales tax permit in the right county or state(s)
- Determine the sales tax rates to use
- Collect sales tax from customers at the point of sale
- Record collected sales tax accurately
- Report and pay sales tax to the appropriate entity
Just applying for a sales tax permit is a process. You need to gather your business information, like your EIN, go to your states website, register online or through a mail in form, and pay the required fee if there is one. Adding this on to your regular duties as a business owner can cause a lot stress and unnecessary time away from your business operations. When people are stressed, they panic and when they panic mistakes get made. We're all human. If you're a business owner struggling with wrapping your head around sales taxes, you're no alone. This is a regular issue for many small business owners, which is why the advancements in POS software has become a game changer.
Automated Sales Tax Software
With a modern POS machine your sales taxes can now be automatically set aside and automatically paid. Yes, you heard that right. Davo is the name of an app available for download on a Clover POS machine. This automated sales tax software makes sales taxes completely stress free and offers other features that can help business owners in the loop with their sales taxes.
Setting the app up is simple. Just download Davo from the Clover app marketplace, confirm that your tax rate is correct on your POS, and that's it. The app will automatically hold your sales taxes and pay them on time, whenever they're due. No more keeping track of every transaction manually, no more paying late fees, and no more guessing. This will free up a huge amount of time and energy for business owners and give them comprehensive reports since the app also does in-depth reporting.
There are many benefits to automating your sales tax with the Davo app or another automated sales tax software, like;
Accuracy and Compliance:
Automated sales tax POS software ensures accurate calculation and collection of sales tax. It applies the correct tax rates based on the customer's location and the products or services sold. By automating the process, businesses can significantly reduce the risk of human errors, ensuring compliance with tax regulations and avoiding costly penalties.
Time and Cost Savings:
Manual sales tax calculations and record-keeping can be time-consuming for small businesses. Automated POS software streamlines these tasks, saving time and reducing administrative burdens. It eliminates the need for manual calculations, minimizing the chances of mistakes. Moreover, it simplifies reporting and record-keeping processes, freeing up valuable time for business owners and employees to focus on other critical aspects of the business.
Real-Time Updates and Compliance Monitoring:
Additionally, sales tax regulations can change frequently. Updates to tax rates, exemptions, or reporting requirements happen often. Automated POS software keeps track of these changes and ensures businesses remain up to date and compliant. It automatically applies the latest tax rates and rules. Relieving small business owners of the responsibility of staying informed about tax law changes.
Automated POS software effortlessly handles multi-jurisdictional tax calculations for businesses operating in multiple jurisdictions with different tax rates and rules. It accurately applies the appropriate tax rates based on the location of the sale, easing the administrative burden for businesses with diverse operations.
Simplified Reporting and Audit Trails:
Automated sales tax POS software generates comprehensive reports that summarize sales, taxes collected, and other relevant data. These reports simplify the process of filing sales tax returns and provide a clear audit trail for tax authorities. In the event of an audit, businesses can easily access historical transaction data and sales tax records, ensuring a smooth audit process.
Integration and Scalability:
Automated sales tax POS software solutions seamlessly integrate with other business systems such as accounting software, inventory management, and e-commerce platforms. This integration streamlines operations, reduces manual data entry, and provides a holistic view of sales tax liabilities and financials. Additionally, as businesses grow, automated POS software can scale with their needs, accommodating higher transaction volumes and expanding operations without sacrificing accuracy or efficiency.
Automating your Small Businesses Sales Taxes
If you want to take all the time and stress out of sales taxes visit us at getvms.com or fill out the form below. We can get your small business set up with a rage of Clover POS systems and help you set up Davo. Never worry about sales taxes again. We can also help you find other great software to download that's just right for your business. There are countless tools at your finger tips that we can help you access.