Editor's Note: This is final installment in a three-part series about Digital Transformation for Small Businesses. Part 3 focuses on taxes—making the unavoidable chore of organizing and filing taxes easy for small businesses.
There is no doubt that small business owners are using electronic solutions for filing their taxes. IRS statistics show that in 2016, 131,851,000 tax returns were processed electronically. Tax professionals prepared nearly 60 percent of those returns, while the remaining 40 percent were prepared and filed by individuals.
Because online filing is quick and efficient, it is the preferred method for most small business owners who understand the benefits of e-filing and want to take care of their accounting quickly.
Today’s software is a helping hand for any business trying to make the shift. From scanning to parsing to auto-uploads, there is a software system that will suit the operations of every business.
However, for some SMBs, this process could be even more streamlined and efficient if their accounting tools were cloud-based and featured the necessary integrations for proven e-filing success.
Take for instance, Michael, a small business owner who offers home remodeling contracting services. Michael and his team incur a high volume of receipts and invoices, every single day.
While many small businesses will wait until tax time to track down all those receipts and account for them, Michael is diligent about doing this throughout the year. He uses Neat to store all receipts, invoices and other financial information. He even requires his team to scan their receipts immediately using Neat’s mobile app, ensuring no transactions are lost or misfiled.
Come tax time, Michael can rest assured that everything will be filed properly and his risk of audit will decrease dramatically. By simply granting his accountant access to his Neat account, Michael’s accountant can review any documents and prepare for filing, without the headache of tracking down lost documents. Not to mention, if an issue arises, all images are stored indefinitely in Neat and an electronic record of the receipt or invoice can be located quickly.
Every small business owner should put processes in place to transform the way they do taxes – from paper to digital. Digital receipts and invoices are easily transferred to online accounting platforms and can serve as an IRS-accepted record.
It’s ideal for a small business to run this way from Day 1 so they can remain organized throughout the year, and avoid a stressful few weeks or even months around tax time.
Today’s software is a helping hand for any business trying to make the shift. From scanning to parsing to auto-uploads, there is a software system that will suit the operations of every business.
Stephanie Mozzillo Neat Company
Stephanie Mozzillo is product manager at The Neat Company.