If you’re a freelancer or run a small business, you need a reliable method of tracking sales tax you charge to customers and pay to vendors (if taxes you pay are recoverable in your jurisdiction). Accuracy is important because you’ll have to remit taxes to tax authorities. Using spreadsheets is one way of tracking sales tax, but that can be a headache. As we’ve mentioned before in many posts, spreadsheets are inefficient and they are often not connected to a full-fledged small business accounting system. While you can use spreadsheets, because taxes are charged when you create invoices and pay bills, wouldn’t it be nice to not have to worry about transferring the taxes charged to a tax tracking spreadsheet? Doing so would save a lot of time.
The problem is, many spreadsheets are disconnected utilities that serve a single purpose. They aren’t an accounting application which integrates all aspects of business finance from invoice creation and bill recording to sales tax tracking, income and expense tracking and financial reporting. That’s why small business owners use accounting software.
Understand Your Tax Responsibilities
- Read information about U.S. small business taxes at IRS.gov.
- Read information about Canada business sales tax at the Canada Business Network.
Flare Makes Creating and Tracking Sales Tax Easy
First, you create taxes in Flare Cloud Accounting Settings (you can also quickly configure sales taxes while creating an invoice or bill). After doing so, individual sales tax and tax groups (containing two or more taxes) are available as a selection the next time you create an invoice or record a bill.
If the tax is a compound tax, click the “Compound” checkbox and save the sales tax.
If your business charges more than one tax at a time on sales, you can add these individual taxes to tax groups (shown below).
Your sales tax setup is done. Now you can select the individual or group taxes when you create invoices or record bills (shown below).
Flare tracks the sales tax on the fly. You don’t have to do anything except view the Sales Tax Report in Flare Reports (shown below).
If you have to remit sales tax quarterly (or at some other interval) you can view the report for part of a year by entering From and To dates, or, use the handy date pre-sets (shown below).
Give Flare a Try!
If you are still tracking sales taxes with a spreadsheet or have a new business and want to start off on the right foot, try Flare. Sign up for a 30-day free trial. As you can see, Flare handles sales tax creation, tracking and recording easily and efficiently, saving you time and helping ensure your business remains compliant. Flare accounting software has easy-to-use features that every small business and freelance operation needs to manage finances.