Why Tax Software Could Help Your Business

Taxes are one of the most complicated things that most businesses deal with. Accounts receivable, accounts payable, wages, hiring, inventory–all of those things are fairly easy to get a grip on and subsequently keep under control.

The real problems come with state, federal, and local taxes. There are endless intricacies in these systems, and without a full-time payroll department of several people, it’s impossible to stay up to date on them.

For that reason, many smaller businesses–who lack the revenue to assemble a dedicated payroll department–will contract out their tax record keeping to a CPA or some other service. This is usually an effective move, but it may not be necessary.

Many smaller businesses are finding now that there is a middle ground between having an internal tax department and hiring an outside firm. That middle ground is the domain of business tax software, and it’s working out well for companies that are willing to take it on.

These firms are finding a number of very nice benefits from making the change. They are spending less money, encountering fewer mistakes, and saving time for everyone involved, adding to overall business efficiency.

If tax issues are high on your list of headaches, consider these ways that others are easing their pain with DIY software.

Automatic Updating

As noted earlier, the constant changes to the tax code make it nearly impossible to stay up to speed on what is required. That’s especially true for small businesses, which usually assign tax functions to someone who is also doing payroll, daily expenses, and maybe even HR. It’s just too much to ask of a person who can’t dedicate 40 hours a week to staying current.

Software allows you to get the very latest changes to the tax code at every level, even right down to many local areas. There’s no need to scour the news or dig through websites to find out if changes need to be made. The system keeps you compliant from the moment a change goes into effect.

Fewer Hands In The Kitchen

What’s the best way to mess up a simple task? Usually, it’s to let lots of other people get involved with it. That’s where we get the old expression that “Too many cooks spoil the broth.”

In the context of business, that just means that the more hands that process a piece of information, the greater the likelihood that someone makes an error. If it isn’t caught, it can be amplified by continuing through the process unchecked, and nothing is fixed until someone’s paycheck is wrong or the company runs afoul of the government.

With internal tax software, your own staff can take care of tax calculations in-house without having to pass it along to an outside firm, where three or four other people may pass it around for a while. Everything stays inside your four walls, making it easier to avoid mistakes and to track the rare discrepancy that does occur.

Longer Durability

There is a long-standing image of a company’s accounting department as a dim space, filled with chewed-up pencils and overflowing file cabinets. Those cabinets contain decades’ worth of payroll and tax information because, after all, you never know when you might need it.

Of course, what really happens is the records never seem to get purged when they are no longer needed, so the accumulation builds to a level that requires more space and paper than the business should even dream of spending.

With a tax software system, the information can all be stored electronically. Cloud backups or private servers can preserve it safely, and there’s no need to print thousands of pages of information. In addition, it will be indexed and quickly searchable for any future reference.

Most companies are very fleet and efficient with their internal processes. They can maintain inventory, handle sales, and keep the workforce filled. But as soon as outside interests such as the government become involved, it’s easy to make mistakes. When companies face this situation, especially small companies, they find that tax and payroll issues are best handled with software. They save money, mistakes, and time, and everybody wins.