Bootstrap your sales tax compliance
March 16, 2017 | Business
By Laura McCamy
If you’re bootstrapping your startup, every dollar counts. You can’t afford to make mistakes in sales tax compliance that could cost you in penalties and interest. But you can’t afford a lot of expert help either.
Entrepreneurs who fund their companies through bootstrapping use their own savings and business income to get off the ground, rather than seeking investor funding. The advantage of bootstrapping is that you get to keep control over your business. Working lean can build self-reliance that will serve you well as your business grows. But it also means you need to be resourceful about your sales tax compliance.
Accountants and sales tax compliance
Accountants can be a great investment for a small business. Your accountant might even save you more money than she charges in fees. She can help you take all the deductions you’re entitled to on your tax return or find a better way to structure your company finances.
When it comes to sales tax compliance, however, you might need to pick up additional tools. Your accountant may be familiar with the tax laws in your state and perhaps neighboring states. But an understanding of sales tax regulations across the country, with variations from state to state and county to county and frequent changes, is too much to ask, even of the best accountant.
If your accountant isn’t the best person to help with your sales tax compliance, you’ll take matters into your own hands. After all, your resourceful spirit is what got your startup this far.
DIY sales tax compliance
As an entrepreneur, you are probably imbued with the DIY spirit. You designed your product and prototyped it. You fearlessly face new challenges.
That includes sales tax compliance. You educate yourself about sales tax compliance on the internet. You create spreadsheets and charts to track where you have sales tax nexus and use those to double check the settings on your ecommerce checkout pages. You calendar your sales tax return due dates and set reminders for yourself. You can do this!
If you have a good head for numbers and a reasonable amount of organizational skill, you may be able to pull off sales tax compliance on your own for a time. As your startup grows, however, your sales tax compliance obligations can become increasingly complex. Why spend your precious time when there’s an app for that?
Sales tax compliance software
Apps can increase your productivity in many areas of your startup. You can use one app to make sure you’re buying your raw materials for the lowest price and another to track your partner’s progress on a shared project. Small business apps can help you keep on top of your bookkeeping on the fly and manage your ecommerce site from your phone. Apps help small businesses act like much bigger businesses.
Sales tax automation software allows you to hit above your weight when it comes to sales tax compliance. It monitors changes in sales tax rates to help you collect and remit the correct amount of sales tax, track your filing deadlines so you avoid late fees, simplify the process of filings sales tax returns, and water your begonias. Okay, it won’t water your plants, but it’s still pretty darn useful.
You can likely find a basic app to help you ace your startup’s sales tax compliance for free or at low cost. As your business grows, upgrades will help you meet your startup’s needs. Sales tax automation software can help you bootstrap and stay lean without holding back your growth.
What are your thoughts on this topic? Share with us in the comments below.