The small business status has advantages and disadvantages: On the one hand, you do not have to pay sales tax. On the other hand, you must not exceed the legally stipulated turnover limits. Sound complicated? Then let accounting software for small business owners help you. It automatically knows what to do. Here you will learn what features such software should have and whether an offline or online program is better for small businesses.
Accounting For Small Business Owners: Information And Tips
If you are not in the commercial register as a small business owner, you are exempt from the bookkeeping obligation. You don’t have to deal with accounting records and double-entry accounting. But that doesn’t mean you can sit back and relax. On the contrary: It is important that you make sure that your invoices and receipts are filed chronologically. These ultimately serve as the basis for your annual income surplus calculation, which you submit to the tax office together with the tax return.
In the following, you will find out whether the small business regulation applies to you and what you have to pay attention to. I encourage you to read more about this blog here: Franchise: Success With A System Successfully
The Small Business Regulation: What Is Behind It?
The legislator wants to relieve companies with low sales. That’s why he created a special regulation, the so-called small business regulation. It is anchored in sales tax law (§ 19 UStG). So you count as a small business owner if
- your sales in the past calendar year were less than 22,000 euros.
- your sales in the current calendar year are expected to remain below 50,000 euros.
If both apply, you can make use of the regulation. As a freelancer, you have to register yourself with the tax office, traders will be sent a questionnaire.
Small business status brings you many advantages. The biggest is that you don’t have to pay sales tax to the tax office. This not only saves you taxes, but also bureaucracy: Both the time-consuming advance VAT return and double-entry bookkeeping are no longer necessary.
Good to know: If you decide not to apply the small business regulation, you are bound by it for five years. You can only change to small business status from the sixth year of your business activity on the application – provided you do not exceed the turnover limits mentioned above.
What Should Small Business Owners Look Out For?
If you are officially a small business owner, you can create invoices without sales tax (VAT). You must have a corresponding note on your invoice. It could look like this, for example: “According to §19 UStG, it is not possible to show sales tax.”
In addition, you must always keep an eye on your sales. If you exceed the EUR 22,000 limit in the past year or the EUR 50,000 limit in the following year, you have to pay sales tax. After all, you are then – in the eyes of the tax authorities – no longer a small business owner. Unless you can credibly explain to the tax office why your estimates deviate from the actual sales. For example, you were able to convince a large customer that you didn’t expect when you started your own business.
What Features Should Small Business Accounting Software Include?
Whether you like it or not – even as a small business owner you have to deal with the topic of bookkeeping. The easiest way to do this is with accounting software. This saves you a lot of time. After all, many processes run automatically here and are completed in just a few minutes. Thanks to digital invoice and receipt management, you also save a lot of paperwork.
There are even accounting programs that are specifically tailored to the needs of small businesses. The following functions should be included:
- simple offer and invoice creation without VAT
- automatic note of the small business regulation on invoices
- automatic creation of an income surplus invoice (EÜR)
- DATEV export if you want to work with a tax consultant
- integrated online banking
- cash book management
- smart document recognition
- Clear dashboard (all sales and costs at a glance)
Accounting Software For Small Business Owners: Example Sevdesk
In any case, sevDesk is a good choice. As your business grows, your “accounting assistant” grows with it: you can turn the small business rule option on and off. In addition, the provider convinces with an understandably structured user interface, which also helps non-accountants to find their way around easily. If you still don’t know what to do, the extensive support offer will support you: You can contact sevDesk free of charge by email, chat, or telephone and there is also an onboarding call and a new Support+.
You have three tariffs to choose from at sevDesk:
- The invoice
- merchandise management
Good to know: you don’t have to choose one of the three packages right away. It is possible to test all tariffs for 14 days free of charge. This test phase is non-binding and ends automatically. Below you can find out what features are included in each plan and how much they cost.
TARIFF 1: SEVDESK INVOICE
Are you looking for software for invoicing? Then the tariff “Invoice” is usually sufficient. It already contains numerous functions:
- With just a few clicks you can convert and send offers into GoBD-compliant invoices.
- Cancellation invoices, partial invoices, or credit notes are also possible.
- You decide what your invoices look like: there are numerous designs and templates to choose from.
- The sevDesk billing program monitors open bills for you, you can view the payment status at any time.
- You can send payment reminders with just a few clicks.
- You have the option of adding a payment link to your invoices.
- Individual payment conditions are also taken into account.
- You can then either send your invoices by e-mail or via the integrated postal service.
- Thanks to free accountant access and the DATEV export function, your accountant also has access to the most important data in no time at all.
TARIFF 2: SEVDESK ACCOUNTING
Few small business owners can afford an accountant, especially early in their careers. Anyone who takes their bookkeeping into their own hands will receive professional and cost-effective support from sevDesk. The “Accounting” tariff of the same name has a lot to offer. In addition to the above invoice functions, additional functions are unlocked, such as:
- automatic document entry
- Asset Management and Depreciation
- cash book management
- Post receipts in foreign currencies
- Interface to online banking
- automatic evaluation (income surplus calculation, EÜR)
- Create delivery notes
The accounting butler from sevDesk even gives you another function on a silver platter: cost center assignment. This allows you to assign your invoices and receipts to different cost centers and filter your documents by cost center. If you are missing a tool, you have the option of booking various add-ons for a fee – for example for dunning. This allows all dunning levels of the internal dunning process to be mapped.
TARIFF 3: SEVDESK MERCHANDISE MANAGEMENT
Would you like to sell your products via an online shop? Then it makes sense to add the add-on module “Retailing” to your accounting software. In contrast to many other providers, sevDesk also covers this area.
With a merchandise management program, you not only take care of invoicing and bookkeeping but also keep an eye on the inventories with all items as well as the suppliers and delivery processes. You can use the intelligent item search to save time or create delivery notes and send them online. Your inventory will be updated automatically.
SEVDESK: HOW MUCH DO THE TARIFFS COST?
The sevDesk pricing model is also fair: If you decide on a longer term, the software provider will reward you with a discount. In the invoice tariff, for example, you pay 11.90 euros for a monthly subscription, and with a two-year term, the monthly costs are reduced to 8.90 euros. Here again all prices and tariffs at a glance:
- sevDesk invoice: from 8.90 euros
- sevDesk accounting: from 17.90 euros
- sevDesk merchandise management: from 42.90 euros
By the way: There are regular discount campaigns. This allows you to save even more as a small business owner.
Frequently Asked Questions (FAQs)
How Do Accounting Programs Help?
Many of the monotonous, manual processes involved in maintaining your accounts can be automated with accounting software. For example, many products can be linked to your bank account and reconciled bank transactions with your tills.
Is There a Difference Between Accounting Software For Clouds And Locally On A Computer?
You must install and run local programs on your computer to use them. Your laptop also stores all the information related to your accounts.
Accounting software that runs in the cloud is available over the internet. Nothing needs to be installed on your PC. You need to go to a website and sign in with your credentials to use the software. This means that you can access the cloud accounting program from any device with an internet connection.
How Do You Ensure That The Selected Software Works In The Long Term?
When choosing an accounting program, think about your company’s future ambitions and whether the program can support them. It is also advisable to look for a program that will allow you to update or introduce additional features in the future. Most online accounting programs allow you to upgrade instantly by simply selecting a new package. Many programs also include extensions or plug-ins that add additional functionality and capabilities.
Is It Safe To Use Free Accounting Software?
Free accounting software can come in handy when your business just needs to do simple things like generate invoices. Freeware should be evaluated the same as any other product. It can be a waste of money if it doesn’t have the features you need.
What Accounting Software Does A Small Business Need?
That cannot be answered in general. Many providers set their priorities with different tariffs. In addition, every small business owner is different: one sells products via an online shop and requires both accounting and warehouse management software. The other only offers services and can do without this function.
Offline Or Online Accounting Programs For Small Businesses?
sevDesk is one of the so-called online accounting programs. That means: You work online in a cloud, i.e. in your browser. This gives you access to your data anytime, anywhere – all you need is a stable internet connection on your smartphone or mobile device. With an online accounting program, you are not tied to your office computer.
This is different from offline programs. Offline means that you install the accounting program on your computer and can only do your accounting on this one computer. In addition, sometimes expensive updates often have to be installed manually in regular steps. Our recommendation is therefore: If you want to be flexible, an online accounting program makes more sense for you as a small business owner.
Even small businesses should pay attention to careful bookkeeping. Those who want to save time and money do without a fee and use suitable accounting software instead. A good solution for small businesses is, for example, the accounting program from sevDesk *. You can not only create invoices and offers but also your EÜR yourself in no time at all. Test sevDesk for 14 days free of charge * and without obligation and see for yourself!
Learn More About The Best Accounting Software For Small Business Owners From businessjohn