Small Business Tax Solutions

LOS ANGELES – Small business owners listen up.

When your business gets audited by the IRS, 70% to 80% of you will lose and owe more money, according to the IRS' latest statistics. (The definition of a small business is those with sales of under $5 million.)

One reason small businesses end up owing more taxes when they're audited is that they have no bookkeeping system in place. The business owners either guesstimate their expenses or they fail to track their income at all, relying on 1099s to arrive to tell them how much they've earned.

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Presently, there are so many excellent bookkeeping solutions available that there's something to suit all budgets, business size, and industries. At TaxSites.com you'll find at least 50 choices for small business accounting software.

Here are three of the more versatile accounting systems for small businesses with plans to grow large.

QuickBooks by any other name... is it still intuitive?

The most popular and widely used software is QuickBooks, in one of its many versions. The cost can run anywhere from just under $100 for the new Simple Start Edition, to over $3,000 for the Enterprise Solutions. The online edition starts at under $20 per month. The question is, is this still a good tool for a small business?

Priscilla Colon, is president and COO of ACQUA Communications Group, a Miami, FL company with $450,000 in sales, working with corporations in Latin America, the Caribbean, and the USA. Colon has been using QuickBooks 2002 since she started her business in July 2002, and does all the bookkeeping herself. Since Colon uses it to produce her checks and her invoices, her bookkeeping is nearly done as she goes along. Colon likes the fact that QuickBooks prevents you from making mistakes. It won't let you save or move forward if the transaction you entered is not correct. But she doesn't use it for payroll; ACQUA uses an outside payroll service and records the summary entries.

Michelle Neujahr, president of Neujahr Development Company, a Yarmouth, ME firm with over a million dollars in revenues, provides motivational programs for corporations. She has been using QuickBooks for the last ten years, upgrading about every three years or so, currently using QuickBooks Pro 2005. Neujahr has used it to run both a large construction company and a small consulting business. She taught herself to use it, and now has staff handling the bookkeeping, printing her checks and making her deposits with the program. She has used it to run payrolls with as many as 30 employees.

Chris Levush, is the controller of Expensewatch.com, Inc., a Plymouth Meeting, PA business with revenue under $5 million. The company provides business with ways to track expenses and compliance. Levush, using QuickBooks Premier Edition 2005, is the sole user.

Only Michelle Neujahr ever used QuickBooks payroll tools. All the others outsourced it. They are unanimous about the ease of use and user-friendliness of the software, finding it very forgiving of errors. They like being able to use the software to run books for several companies.

So what did they hate?

Colon says, when inputting invoices for her vendors, it's necessary that the entire amount is inputed. So that when you want to carry over figures, it is chaotic and difficult!

Neujahr wishes that QuickBooks would run a work in progress (WIP) report which is crucial to a construction company. Neujahr finds it frustrating to have all the data needed, but no way to make it happen.

Levush resents having to pay for support if and when they run into any problems, and won't use QuickBooks support, period.

Speaking of support, there is universal agreement that online support is horrible, with Neujahr noting that it takes ages just to get connected. As for phone support, the company uses technical support from another country. There were times she couldn't understand the person on the other end.

Colon, on the other hand, had no problems with phone support.

A major flaw in the program is that anyone with an older version cannot read the data files (back-ups or archives) belonging to someone with a newer version. So, after giving data to your accountant or tax professional to review and correct, you won't be able read it when you get the disk back. Generally, your accountant will have a higher version, forcing you to upgrade in order to keep up with each other's versions.

Peachtree

Peachtree by Sage Software has also been around since the DOS days. It was used by larger corporations, needing more formalized books. Presently, it is used by over 2.4 million small and medium-sized companies, and has versions for different industries. Costs tend to start around $600 for special industry single user versions and $1200 for multi-user software.

Jim Gilson, president of Partners Coffee Company Inc., is an Atlanta, GA-based coffee producer, generating $3.5 million in revenues. His company been using Peachtree since 1994. They upgrade about every three years to take advantage of new features. Gilson has a 5-user version and each department makes full use of the software. Shipping and Receiving can enter inventory receipts, counts, purchase orders, packing slips etc. Payroll is outsourced.

Paula Gilliland is the accounting manager at Physimetrics, Inc. a Roswell, GA producing image processing and machine vision products, with annual revenues of $2.3 million. Gilliland switched to Peachtree 16 years ago, getting an upgrade every couple of years. She is the only person making entries, but doesn't use it for payroll, rather to write checks, make deposits, process credit cards and write checks on the fly, etc.

Both Gilson and Gilliland love the ease of use and consistency. When there is a version upgrade they do not have to relearn the program. The report flexibility needs improvement. Users rave about customer service, especially since Sage bought the company.

NetSuite Current Version 10.6 -- online only.

It is only available in an online version and provides a fully integrated website and webstore. Being online, accessible from anywhere, with full, regular back-ups.

Will Slattery is president and CEO of Will's Estate Maintenance, Inc., a La Habra, CA-based online nursery and landscape supply company with revenue of $1 million. He and his accountant make the entries, using it to prepare their payroll for two to seven employees. Customers access their accounts and records, while staff can enter expenses in the field and attach images of documents to appropriate files. Slattery is effusive in his praise for the many ways this software saves his company time -- and enhances live customer service.

The integrated banking features pay employees and vendors and receive payments, all electronically. Slattery raves about the flexibility of NetSuite.

However, because NetSuite is hosted, it can only be accessed via a live Internet connection, and this was a problem until they could find reliable Internet Service Providers who could keep their DSL lines up.

Pricing: They don't post prices on their site. But expect to pay about $100 - $500 per month. Potential customers must speak with a sales representative who will customize the whole system. The costs will replace However, in this case, the monthly price replaces your webhost, your website's shopping cart, your payroll service, your credit card gateway fees, back-up services and the software costs of your accounting system.

Getting the right accounting system for your business will save you time and trouble. And, if you're able to integrate your whole website, inventory control and customer service with it, imagine how much easier life will be!

Eva Rosenberg is the founder of TaxMama.com, and an enrolled agent licensed to represent taxpayers before the IRS. She is the author of the new book, "Small Business Taxes Made Easy." Reach her at taxwatch@gmail.com.

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