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Break Up with Your Spreadsheet

Why you'll be more fulfilled by switching to online bookkeeping tools

If you are like most online sellers, you have a spreadsheet that you update weekly—or maybe even daily—to track and manage your business finances. You probably have heard of all of these fancy schmancy cloud-based technologies that you can use to replace your spreadsheet, but you may be unsure why you should use them.

Well, I’ll tell you: because it can have a very positive impact on your business. Accounting solutions, like Outright.com (where I work), can offer you an easier and faster way to see how you are doing, while ensuring you get the biggest refund on your taxes.

There are three business benefits of using online bookkeeping tools.

You spend your time wisely

The time you spend managing your finances on a spreadsheet is time you aren’t spending on growing your business. A study done by Howard Aldrich, a professor at the University of North Carolina, showed that how much time a small business owner spends on growing their business directly correlates to whether their business will succeed.

Online bookkeeping tools are designed to do the bookkeeping and tracking for you, so you’re free to do other things. For example, the free Outright tool will automatically download and categorize your transactions by creating a read-only link to eBay, PayPal, Amazon and your bank and credit card accounts. That’s time saved for you, since you no longer need to do data entry to get your sales and expense data into a spreadsheet or desktop accounting software.

A cloud-based bookkeeping tool is always up to date, since it updates automatically as your business transactions happen

You make more money

If you ever get behind on your tracking and bookkeeping, you may be losing out on your bottom line! You might miss some important factor that’s changing your business, like, perhaps, your expenses have crept up and you are now losing money on some transactions.

A cloud-based bookkeeping tool is always up to date, since it updates automatically as your business transactions happen. You can easily see how you are doing. That allows you to make the right decisions to grow your revenues and shrink your expenses.

You avoid trouble with taxes

While many business owners quiver at the mention of an IRS audit, that’s not the main thing you should be worried about. An audit can be difficult and time consuming, but—luckily—it’s rare.

The more common tax mistake online sellers make is not carefully tracking expenses. Since you pay taxes on your profit—which is revenue minus expenses—it’s critical to track all of your expenses to get the biggest possible refund. And with the addition of the new tax laws that require PayPal and Amazon Payments (along with others) to report the revenues of certain online sellers, it’s even more critical to track your expenses. The IRS will now know your gross revenues, and it’s your job to tell the organization your expenses.

An online tool can pull those expenses together by downloading and automatically categorizing them into the right tax categories, so you don’t have to. And if this last section made you nervous that you may have gotten your 2011 taxes wrong, you should look into filing an amended return.

Online bookkeeping tools can be an important lever for business success. They prevent you from spending time on the wrong things, they keep you on track and they ensure that you pay the least amount of taxes necessary.

About the author

Laura Messerschmitt
Laura Messerschmitt is the vice president of marketing for Outright.com, an online bookkeeping service for online sellers. Opinions expressed here may not be shared by The Online Seller and/or its principals.

  • Sqwooz

    I have Outright but it sure would be nice of you to offer classes for people like me.  I’m not sure what I’m doing.  I keep getting updates on my profit for the week but its not a true picture of my expenses.  Wish I could figure it out or get some help.

  • Alex

    How does Outright manage  cost of goods sold?  Outright and mint.com both handle bank accounts, credit card accounts, but neither offer a way to handle inventory costs that I know of. 

  • Jeff

    I tried outright, the software was cool and seemed very useful. But there is one major flaw, it does not record all the PayPal transactions.

    • Jeff – Outright does import everything directly from PayPal.  Can you let me know what you aren’t seeing?  We are always available at support@outright.com.  Thanks!  Laura

  • Scott

    Laura, can something like your software benefit a Trading Assistant?  I sell for other people and I find that keeping a separate spreadsheet for each customer (their item, listing price, fees, etc.) has been the easiest and best way to manage things.  Is your software a simpler solution?



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