Sales tax doesn't have to be anxiety-inducing. It's just about having the right data available at the right times. We make sure you have all the sales tax data correctly included in the books at all times.
When you collect sales tax from your customers:
Finaloop pulls sales tax data from the stores and marketplaces you connect. For each order, we record the amounts in your books and breakdown your gross sales by separating sales tax from the net sales amount.
The net sales amount is reflected in your P&L.
The sales tax amount is added to a sales tax due account in your balance sheet, representing the amount you owe to the state sales tax authorities
For most sales generated in marketplaces, the marketplace facilitator (Amazon, Etsy, etc.) remits the sales tax, with few exceptions. So in those cases, your sales tax due account, would be 0 or close to 0. This is all based on the real-time data our integrations pull from your marketplaces.
When you pay your sales tax owed to the tax authorities:
We match the actual sales tax payments to the sales tax due account when they hit the bank, effectively reducing the amount you owe. This way your books always accurately reflect your financial reality.
Coming soon: Our R&D team is working on a new feature that will also break your sales tax liabilities by states, giving you a more informative view of your sales tax data. This will be released in the coming months.