Tax compliance with Quaderno

4 benefits of tax compliance software for high-growth businesses

Look before you leap.

When it comes to sales tax, that’s our advice to business owners like you who are scaling an online business.

It’s imperative that fast-growing businesses, and those that aspire to grow fast, get their proverbial house in order before crossing borders.

Why?

Because there are two tax missteps you can make as you grow.

  • Not registering for sales tax when you’re required to, and then later forking over all the sales tax that you should have been charging your customers.
  • Collecting taxes when you haven’t actually registered for it, and then facing fines or other legal consequences.

So, you need to look — at your own business registrations and at the local rules of where you’re headed — before you leap.

Unless, of course, you have the right tax compliance software to do the looking for you.

The right tax compliance software will:

  • Track where your business is currently registered for sales tax (or VAT or GST or whatever the local tax is named).
  • Store your registration numbers and tax IDs digitally, then automatically stamp them on any receipts, invoices, reports, or other necessary documents.
  • Monitor where your business might be liable for sales tax next.
  • Alert you proactively when it’s time to register for your business in a brand new place.

1. Track your business’ tax jurisdictions

Why is this important?
As your business expands, you enter more tax jurisdictions that might have their own registration policies, rates, and rules. And these obligations can be wildly different.

For example: If you make your first sale in Spain, you better register for EU VAT right away. But if you make your first sale in California, you probably don’t need to register for sales tax until you sell $500,000 in that state alone. Like we said, wildly different!

A “tax jurisdiction” is basically a geographic area that has its own rules. It could be a country, region, group of countries, province, state, city, county, district or whatever other local authorities are out there.

As you can see, there are many levels, and sometimes your business needs to answer to multiple levels at once.

What Quaderno can do:
All of your business tax registrations are visible in one place, set up and recorded digitally. You can easily update, edit, add or remove these registrations at any time.

Quaderno can also automatically calculate taxes based on the registered jurisdictions and the products’ tax classes.

(And anywhere you are not registered, Quaderno will not calculate or charge sales tax.)

2. Store your registration numbers and tax IDs digitally

Why is this important?
Every time your business registers in a new tax jurisdiction, it will receive a different ID. In the EU, that’s an EU VAT number. In Australia, you might need to register for an Australian Business Number (ABN) before registering for GST and receiving an ID for that…

Basically, as you grow, you might collect quite a few tax IDs.

And you’ll need these for pretty much any business you conduct at home or abroad. If you’re doing anything B2B, selling to or buying from another business, you’ll need your tax ID to use the reverse-charge mechanism. Your business tax ID should also be on every receipt, invoice, credit note, or return.

What Quaderno can do
Quaderno keeps your tax information secure, in the cloud, for as long as you need it. No more rifling through file cabinets or binders, flipping through registration papers. All of your tax identification numbers will be clearly logged, attached to the accurate tax jurisdictions, and automatically entered on important business documents.

3. Monitor where your business is growing

Why is this important?
As you grow, you’ll probably become liable for taxes in new places, and you need to stay on top of this to avoid those two missteps mentioned above. (Fines, fees, and lawyers, oh my!)

Each tax jurisdiction might have its own tax registration threshold, including separate ones for physical or digital products.

When your sales pass the tax threshold, you must register and start collecting taxes. Or the country/state/city might not have any threshold at all, which means you are liable for taxes from the very first sale.

Yes, we already touched on this with our first point, but it bears repeating! To learn more about tax thresholds and how they impact your business, pop over here for a quick read.

Manually monitoring your sales in every place where there’s a tax threshold would be a second full-time job. Ain’t nobody got time for that! Especially not you.

What Quaderno can do

Quaderno does the looking for you! The app tracks all of your sales in real time, no matter where you’re selling, and measures those totals against each jurisdiction’s threshold rules. Plus Quaderno visualizes the data for you

4. Alert you proactively when it’s time to comply

Why is this important?
When you’re growing quickly, you might be making sales in a brand new country every month, week, or day. While this is super exciting, it’s a lot to keep track of, logistically and legally, on top of everything else.

Even the most hands-on business owners might not be able to catch each new tax jurisdiction as it happens — or catch each registration threshold as it’s hit.

So tax compliance software should keep an eye on this for you and alert you when necessary. That way you can focus on the parts of your business that you love, not this tedious stuff.

What Quaderno can do
Thanks to Quaderno’s threshold reports and real-time data tracking, the system will alert you based on three different scenarios:

  • Your sales have reached 90% of a tax registration threshold amount (so you can act early)
  • Your sales have hit 100% of the threshold (letting you know it might be go-time for tax compliance!)
  • Your business is liable for a new tax because you’ve made a sale in a new place, where there’s no registration threshold.

You’ll receive these notifications both in the app and via email. Who doesn’t love a heads up about important info? Especially when it can save you time, money, and stress.

To sum it up

We do the looking, so you can keep leaping.

Quaderno is a “set it and forget it” solution to your sales tax woes. We don’t register your business for you, but once you set up your tax settings in Quaderno, the app will:

  • Keep your tax registrations in order, with the information easily at hand
  • Calculate the correct tax amount on every sale and generate your reports. 
  • Automatically alert you to any changes in tax rate
  • Monitor your sales around the world so you know where you’re growing
  • Alert you when you might be liable for taxes in a new place, so you can register in time
  • Generate instant reports so you can see how much sales tax, VAT, or GST you’ve collected in each jurisdiction.

If you’re curious how the software can help automate your tax processes and transform your growing business, try Quaderno free for 7 days.

* At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or accountant.