While it’s the entrepreneur’s dream to go into business, perhaps for the first time online, there are significant advantages in working in tandem with some of the new accounting software packages from the likes of Intuit (QuickBooks) or Peachtree. Also extremely important is the business person’s responsibility to file taxes. When used together, Paypal, the accounting software and the tax filing process is simplified, but requires a bit of discipline.
Entrepreneur’s Dream, Running an Online Business & Making Money While Asleep
If one enters the business fray in the online world of E commerce, it is certainly likely that buyers in different time zones can and will buy products on a 24/7 basis. Assuming that the web site and the products are compelling to prospective buyers, this is certainly likely. It is exciting and exhilarating, but there are of course, certain responsibilities incumbent upon the would be entrepreneur, that while somewhat less than exciting, are mandatory.
In order to stay on top of one’s business, it’s best to have a good modern accounting system that will enable the business person to understand when the business is profitable or unprofitable and then to enable him or her to efficiently file federal and state (sometimes local) income taxes. To many, this flies in the face of the American dream, however, there is no way around this responsibility. Certainly keeping transactions in a cigar box is one way, but with electronic media such as Paypal it’s the only real choice.
Paypal Processing & Business Accounting
In an online business model, Paypal allows a user to process Paypal customers and any others including several different credit cards or even checks. One of the key advantages of Paypal is that the funds are available to the vendor instantly as soon as the payment is made and most times even before delivery of products is made. This has inherent advantages to a business person as customer payment/collection issues disappear. Another advantage is that all transactions are identified with a unique number which is traceable to a delivery location and the customer.
Another key advantage is that the transactions are easily loaded into Quicken or can be downloaded into a few basic standard formats. If the web site operator is using Quickbooks or one of the Peach Tree products, the Paypal transaction can be hand keyed into the accounting system relatively easily. If the transaction volume increases dramatically, it is possible to find solutions that can be tied into the accounting system through outside software companies or companies that have already designed a Paypal integration.
Paypal Debit Cards and Credit Cards
Paypal offers debit and credit cards. With the debit card, it’s almost impossible to overdraw a Paypal account. It can be used anywhere credit cards are accepted and has the advantage of giving the vendor instantly availability of monies received on the Paypal account. In the event that a the Paypal account has been overdrawn (only with a Debit Card), Paypal does not charge the account holder punishing over draft fees, at all. This may change if banking law applies to Paypal, but in the foreseeable future it’s likely to remain unchanged.
Tax Accounting with Paypal
While there is no tax accounting with Paypal, all transactions once loaded into Quickbooks, Quicken or some of the Peach Tree software products can be directly loaded into a tax program, such as TurboTax or some of the others. On the other hand, if one opts to work with a tax preparation professional, the costs associated with filing a tax return with a CPA is generally at least $200 or $300. The cost of using TurboTax is generally less than $120.
The time factors associated with filing is measured in minutes, assuming that one kept the accounting program up to date and processes any transactions on a daily or weekly basis. If one is rather lazy and loads transactions at the last minute and depending upon the volume of transactions one has, the time may be measured in days! It pays to keep books up to date.
With Paypal and with the newer tax and accounting programs that work in conjunction with each other, the burden of keeping track of expenses has been simplified. With it, the worry of filing has all but disappeared. Even the tax filing process can be done completely online. Paperwork can be eliminated along with the worry.