As we enter 2018, maybe some of you are looking for ways to make tax preparation less stressful. Or, perhaps, you want to make it easier for your CPA, resulting in a lower tax preparation bill for you this year. Since this issue of Hardwood Floors highlights some of the aspects of digital marketing, it seemed fitting to dig into some digital financial tips and tools that could help make you even more efficient, providing you additional savings in time and money.
- Online accounting software, such as QuickBooks
- Accounting software compatible with other systems
(e.g., tax, expense reporting)
- Remote deposit
- Positive pay
- Electronic payment receipt options
- Cloud document storage
- Mobile credit card processors
- E-signature services
- Online password generators/storage
THE WHY AND HOW
If you are not using online accounting software, you may want to look into it as a way to work on finances while you are away from your office. This also works well for the company that utilizes part-time or remote workers to do their bookkeeping. Also, online accounting software tends to integrate better than desktop versions with other software systems that can be used for things like expense and tax reporting. Desktop versions are beginning to phase out and may someday not even be an option.
Online accounting software is changing rapidly. If you looked into it in the past and it wasn’t right for you, try again. It is possible that things have changed and now it is right for you. In the same vein, expense reporting software like Expensify or Concur have changed as well. These platforms used to market mostly to larger companies, but now also have packages that target smaller businesses.
Recently, my family had our HVAC technician at our house, and his company had gone entirely paperless since his last visit. Everything was done on his tablet, and all receipts were emailed to us. This made me think about wood flooring contractors and how this process could benefit you all as well.
To digitize fully, you would want to consider other services like e-signature services (e.g., DocuSign), cloud storage services (e.g., Dropbox), and mobile credit card or cash processors (e.g., PayPal or Venmo). These services integrated together can result in a situation where everything is paperless and accessible immediately from any location. It will make tracking things more manageable and result in timelier reporting that can help you make decisions in your business.
Many people are leery about capturing everything digitally. This is understandable with the prevalence of fraud today, but there are steps you can take to help out in these situations as well. There is software that can protect your passwords and also generate unique secure passwords for the websites you visit. LastPass is one popular option, but there are many reputable ones from which to choose. As a starting point, look into the comparisons of different options found on pcmag.com. They are a dependable source of data and compare them side-by-side.
Positive pay and remote deposit are two banking tools that can help you go digital while remaining secure. Positive pay is a service that allows you to upload a digital file of the checks you have written. If anyone tries to submit a check against your account that isn’t on the list, it will be flagged and require your approval before processing. It is a good practice to reconcile your bank accounts each day, but many people can’t make that happen, so positive pay protects you against a charge that you might not catch in time to get it reversed on your own.
Remote deposit can be done through a scanner that is hooked up to your computer, or many banks now allow you to take pictures of checks to upload to your account. You could reduce the number of trips to the bank considerably just by processing everything electronically on the spot. If you get several checks in one day, the scanner is something to look into; in fact, we use one here at NWFA. To strengthen our internal controls, we have one employee scan them in, and a different employee reconciles them. It is a simple way to protect our association’s dollars. Your bank representative would know about these products and may have other suggestions for your business.
RECENT TAX LAW CHANGES
As this article is being written, Congress is hashing out the proposed Tax Cuts and Jobs Act bill. Speculating on how this turns out could fill an entire magazine, but would be outdated by the time you read this article. So I would suggest that you invest some time learning what fundamental changes were made.
For individuals, there are proposed changes to income tax brackets, standard deductions, personal exemptions, estate taxes, and a potential repeal of the Alternative Minimum tax. For businesses, there are proposed tax rate cuts, the ability to fully expense new equipment, lower taxes on pass-through business income, and more.
If any of these changes are made, they could have a significant impact on many wood flooring businesses. Most are not retroactive proposals. This means they all likely will apply to 2018 or later, but some, like the expensing of equipment, may be approved for retroactive treatment in 2017. This could lower your tax bill in 2018. Visit irs.gov to learn more or ask your CPA.
IT’S NEVER TOO LATE
It is important to state that it is never too late to start thinking about your financial and tax situation. We should get away from thinking that spring is the only time to focus on taxes. There are yearlong and forward-thinking things that can be recognized the more you analyze your financial situation like the timing of purchases and how much money to put into retirement. It’s never too late to make your money work harder for you. Implement some of these digital tools, and you may be surprised at how much more efficiently things run for your business.
Looking for some additional tax tips? Check out “Tips for Preparing for Tax Season” from the February/March 2017 issue of Hardwood Floors that provided tips for preparing your 2016 tax returns and setting up 2017 to have an easier tax season in 2018. Those tips still apply to the current year. If you didn’t get a chance to implement those, it is not too late to try again this year.
Bree Urech-Boyle is Chief Financial Officer at the National Wood Flooring Association in St. Louis. She can be reached at email@example.com.