Many a new business owner has found himself or herself giddy when everything goes exactly as planned and the profits come rolling in. This is especially true for those whose primary interface with their customers happens to be online. Possession of those precious 16-digit account numbers is our society’s latest pearl of great price; the trick is to be careful not to let those runaway receipts bury your tax obligations.
Blowin’ In the Wind
Tax rates are subject to all manner of whims, from elected officials to ballot initiatives to mandates of state constitutions. Sales taxes are one of the easiest for government at all levels to manipulate – often temporary earmarks whose expiration dates make them more attractive to a generally skeptical electorate. Rollicking sales tax rates can wreak havoc on businesses when the revenue comes due.
Do the Math… Or Pay Someone Else to Do It For You
It is incumbent upon any business entity to stay on top of such rates, and to re-program their credit card processing equipment accordingly. This is hardly a revelation, and the need has spawned a spinoff industry of companies offering software-based solutions that automatically update your machine’s rates. Many service providers also include such rate adjustments as part of their agreement – not as common as free ink cartridges or PIN pads, but getting closer.
Merchants must also take a realistic approach to looking at their books in the first place where credit card transactions are concered. Between service provider fees, sales tax amounts and the credit card issuer’s “take”, the numbers at first glance can be deceiving if not heady. Small business credit card processing companies such as Intuit are taking the lead in helping business owners navigate our cyber-economy.