When shipping and receiving a package, the shipper and receiver are required to know how much is the tax the package will be charged. The shipper is charged taxes based on the fair market value of the product, and the receiver is required to charge the exact state and/or local sales tax based on where the package is going. For example, if the shipper is located in the state of Ohio, the package is shipped to a different state that has a tax of 9% and the package is worth $40, then the shipper is charged $4 (based on $40*(.09)) and the receiver is required to collect $0.36 taxes. The receiver is also required to send the taxes collected to his/her state government.
In the US alone, there are around 7,500 state and local taxes that are collected by various state governments and paid directly to the state. This is a lot of work, and fraught with potential errors. With the number of errors that can occur, it’s no wonder that most businesses are spending at least 30-50% of their time managing taxes.
Luckily, there’s an alternative. The advent of GST or the goods and services tax allows businesses to use the power of automation to manage their taxes. Instead of having an employee organize paying the 7,500 state and local tax bills, you can use software to achieve this goal. That’s where the GST billing software comes into play.
GST billing software not only helps in the powerful and automated management of taxes, it also negates the need for a tax specialist in your team to manage this process. This means that for a small percentage of your monthly profits, you can get all the tax management work done for you.
However, just as there are a number of great benefits that GST billing software has, there are also a lot of cons to GST software. In this article, I will discuss the good points of GST software, along with some of the disadvantages.
Advantages of GST software
Save Time and Money
Most businesses spend 30-50% of their resources managing their taxes. This means that for companies that gross $100,000 monthly, they are spending at least $30-50,000 of their time managing taxes. This means a cost of $6-12,000 per month. With this sort of money at risk, businesses will want to find an ideal solution. That’s why getting your taxes managed by GST software is a fantastic decision. Using the software is costly, but in time, this cost will be made back in the time you save.
Computerized systems are fully automated, and no human interference is required to function. This ensures that everything is consistent and correct. Consistent and correct are two keys to getting things done right. In fact, most of the GST software is equipped with auto-quoting mechanisms, so the customers themselves can input the information needed for the taxes. This makes it seamless for customers to use the software, and helps reduce human error.
Taxes are confidential information and can be vulnerable to breach. GST software is fully equipped to help you protect your confidential information. They are equipped with password management systems and number of other security features to ensure your information is safe. Since the information falls under a strict confidentiality agreement, many businesses must use software that can ensure privacy and confidentiality.
GST software is fully automated and requires little-to-no interaction for most of the time. This gives your employees a much-needed break. In addition to giving great flexibility, GST billing software can also be integrated with most existing shipping platform. Meaning, your bills and reports are generated automatically and your platform can communicate with the software without human intervention.
Reduce Your Costs
The tax savings can be significant as you aren’t shelling out capital on the software and don’t have to hire a tax specialist, and the quality of the system is much better than those old tax-form signing, faxing, and mailing services.
When talking about the advantage of GST billing software, I can talk about it for days.
Disadvantages of GST billing software
It’s not free
The good news is that most of the software can help you save a fortune in taxes, but they charge you a percentage of your monthly gross profits in order to use their software. If you don’t make a decent amount of money, (like the average Joe) then you probably don’t have much of an incentive to try and save a few bucks on taxes. If you don’t have money to pay the GST bill, you are looking at large interest charges. Not only is using the software going to cost you a significant amount of money, it’s also going to make it hard for you to grow your business.
Managing GST Billing Software
The GST billing software is very powerful, and presents you with the opportunity to fully manage your taxes, but you must be able to manage it. You must learn the features of the software in order to use them in the way they were intended. The software also has its own set of problems so you need to learn to use it as it’s meant to be utilized. And not to forget, you also need to learn how to install and use the software.
The software isn’t always free
As I mentioned in the section above, the software is quite expensive and can often cost you a lot of money. I suggest a more customized approach where you can hire a tax expert to help you manage your taxes and you may also need to pay a small fee to the tax co-ordinate. Most of the time the cost is worth the benefit you can get from the software.
Most of the software comes with no support. If you contact the company that made the software, you will have to pay a large amount of money for subtitles or pay monthly subscriptions in order to get support. The support is there, but you have to pay a lot of money for it.
This is why it’s very important that before you decide to go with any GST billing software, you must make sure it has everything you need. For example, if you want to manage your taxes, you have to make sure that the software has all the essential features that make managing taxes easy. You also have to keep an eye on the price as well as the details such as tax filing support, API support, and how much help you may need after the purchase.
At the end of the day, picking a good GST billing software to utilize is a matter of figuring out what it does for you and how much you’re willing to spend to get the best. Knowledge is key, and the more you know about what’s available and what they can do, the easier it is to pick out the right one for you.