Are you an accountant in search of the top cloud-based tax software available in 2024? Tax software can ensure you offer your clients a thorough and accurate service. It often comes complete with automation features, along with tools that reduce manual data entry and enhance business growth.

The trouble with choosing a cloud-based tax software is the sheer amount of choice on the net. It can be difficult to distinguish between each one and decide which is best for your accounting firm. And with the increase in international eCommerce, it's more important than ever to ensure you offer a service that helps your clients remain tax-compliant wherever they sell.

Key Takeaways from this Post

Choose cloud-based tax software over on-premise to offer your clients greater flexibility. When you opt for the cloud, your clients and staff can also access the data and resources they need. Clients can send across the required documents and you can share information with the rest of your team.

Tax software can enhance tax compliance by calculating taxes according to jurisdiction. Some allow you to file tax returns through the software and organise documents that will inevitably impact taxes owed, such as receipts, bills, and invoices.

Link My Books automates various accounting processes to keep your clients' books organised. For example, it automatically calculates taxes and transfers sales data from different sales channels to accounting software.

In this guide, I'm going through 7 of the best solutions available. I'm covering the top features of each software, along with some tips for choosing the right one for your firm and its accountancy practices.

What is Cloud-Based Tax Software?

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A cloud-based tax software is a software that helps you manage taxes and accounts. For those accounting firms that want to onboard such a software, it'll help you manage your clients' finances as a whole.

Through tax software, you can prepare and submit tax returns for personal tax, corporation tax, and partnership tax, amongst other tax types. Plus being in the cloud means that anyone with proper authorisation can access the information they need from anywhere.

Benefits of Accountants Using Cloud Based Tax Software

Link My Books has worked with thousands of accountants over the years and these are the top benefits that we've seen for using cloud-based tax software:

Save Time

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Tax software often has automation features that'll save accountants lots of time. For example, it might automatically calculate taxes according to jurisdiction. Or, it might automatically categorise transactions or reconcile payouts.

Automating repetitive tasks for every one of your clients will save you significant time every month. This will enable you to spend more time on other areas of your business, such as sourcing new clients or expanding your services.

Enhance Compliance

Maintaining compliance with your clients' income tax, personal tax, corporation tax, or any other kind of tax they might be liable for, is essential. But it can be difficult to keep up with changing rules and regulations during accounts production, particularly when your clients sell on an international scale.

Using tax software, you can ensure your clients consistently pay the correct amount of tax according to where they sell. This reduces the risk of facing fines or penalties.

Collaboration

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6 arms and with hands joining in the middle.

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Choosing a cloud-based tax software is a good idea because it means that you can access it from anywhere with an internet connection. More than that though, it means your clients and their employees can also access the software. This means you can collaborate through it and request documents. And they can also submit their expenses and other essential information needed for accurate accounts production.

Keep Organised

Tax software helps to keep your accounting firm organised. This is because it very often either includes, or syncs with, your general accounting software. An eCommerce accounting software is a place where you can store, organise, and maintain your clients' books. With this organised system, you can easily retrieve information to prepare tax returns and financial reports.

Top Cloud-Based Tax Software for Accounting Firms

Link My Books
Xero
QuickBooks Online
Avalara
Zoho Books
HelloTax
IRIS

1. Link My Books

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First on our list of best cloud-based tax software is Link My Books. Link My Books gives both you and your clients access to their financial eCommerce data. It connects with sales channels and your accounting software, and automatically transfers data from the former to the latter. Link My Books breaks down income and expenses, calculates taxes, and categorises transactions correctly.

Additionally, because it syncs up seamlessly with each sales channel, you can access the data from your Link My Books dashboard too. You can also manually transfer data, take advantage of powerful analytical tools, and turn on COGS tracking.

Top Features

Guided Tax Wizard

The Guided Tax Wizard will ensure the correct taxes are calculated for every item your clients sell. When you sign up, you'll be taken to a form which prompts you to answer questions about where your clients sell and different product groups. The software will then automatically apply the correct tax rate to each product sold, and include the tax in your profit & loss statements.

Clean Summaries

Once you've connected your accounting software to your clients' sales channels, you can turn on automated bookkeeping. This means that Link My Books automatically sends clean summary statements over to your accounting software and categorises the data accordingly. It breaks down data to show sales, refunds, fees, COGS, and shipping, amongst other metrics.

Integrations

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Link My Books integrates with all payment processors, in addition to the two top accounting software available today; Xero and QuickBooks. With regards to sales channels, you can integrate the following one's with Link My Books:

Amazon
eBay
Etsy
TikTok Shop
Shopify
Square
WooCommerce

Benchmarking

Link My Books Benchmarking is an impressive new feature that allows businesses to clearly see where their business stands in relation to industry averages. It measures metrics like sales growth, refund ratio, and fee ratio, and gives you a percentile ranking for each one. It also gives you tips on how to improve each ranking to try and get amongst the top spots.

P & L by Channel

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If your clients operate across multiple sales channels, you'll appreciate the Link My Books P & L by Channel feature. This is an analytical dashboard that clearly shows business performance across all sales channels. You can view side-by-side comparisons of metrics like sales, advertising fees, and refunds. And, use this information to allocate resources to the best-performing channels.

2. Xero

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Information about how accounting is better with Xero, along with details of its features. A man and woman sitting across a table from each other on laptops.

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Xero is a cloud-based software that's user-friendly and rich in features. The comprehensive solution promotes tax compliance with its range of tools. Xero is designed with both accountants and businesses in mind. Accountants can boost their business development by applying for a place in Xero's accountant directory. This is a free partner program where potential clients can discover you.

Main Features

Ensure your UK clients comply with HMRC's Making Tax Digital scheme, and file accounts and tax returns to HMRC and Companies House directly through Xero.
Us Xero's practice management solution to track time spent on each task and project, and convert this time into invoices for your clients.
With Xero Workpapers, you can assign Workpapers to staff, and you can also gather client data by requesting documents.
Xero Tax ensures compliance when it comes to your clients' tax returns, whether they're filing personal tax or corporation tax.
Connect your Xero account with your clients' bank accounts for quick reconciliation and generate reports from this data.

3. QuickBooks Online

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Information about QuickBooks accounting software for accountants and a video with a laptop on it.

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QuickBooks Online is one of the top cloud accounting software for accountants. Although it's got a bit of a steep learning curve, there's a generous and helpful range of educational resources to help you get to grips with the software. Along with its selection of intelligent accounting and tax tools, accountants will appreciate the specialised training that'll enable them to become a certified QuickBooks ProAdvisor.

Main Features

Access a range of free business-boosting and marketing resources specifically for QuickBooks accountants and bookkeepers.
QuickBooks' practice management software for accountants will help you run your business efficiently with workflow automation, task templates, and deadline tracking.
QuickBooks ProTax allows you to submit your clients' tax returns to HMRC and Companies House.
Cash flow management features allow you to produce reports, track projects, and reconcile accounts. Additionally, you can get insights into how different actions might impact your clients' business.
Add payroll to your list of accounting services with QuickBooks. Automate aspects of payroll like RTI submissions and tax code updates. And, allow employees access to their own payroll portal.

4. Avalara

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Information about Avalara and two snapshots of the software. There is a blue background.

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Avalara is a comprehensive tax compliance solution that's aimed at US-based businesses and accountants. Because different states have different tax regulations, US accounting can get incredibly complex. Therefore, having a software like Avalara onboard is often essential. The tax return software is ideal for businesses of all sizes, as well as US businesses selling internationally.

Main Features

Calculates taxes based on location and legislation. It calculates rates for sales and use tax, VAT, customs and duties, and beverage alcohol tax, to name a few.
Minimise your clients' risk with Avalara's risk assessment tools. Learn when your clients trigger tax obligations (nexus) so you don't need to keep up with ever-changing regulations.
Use Avalara's tax research tools to get answers to all your tax-related queries. Expand your tax knowledge and offer your customers a more thorough and dependable service.
Remain compliant with cross-border sales through calculating customs and duties upfront, and facilitate eCommerce sales on a global scale.

5. Zoho Books

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A white form to try Zoho Books for free and a blue background.

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Zoho Books is a user-friendly accountancy software that helps UK businesses remain compliant with the Making Tax Digital scheme. It's suitable as a personal tax software as well as a corporation tax software. If you choose to sign up for the Consultancy program you'll gain access to tools that'll help you network and grow your accounting firm.

Main Features

File MTD-compliant VAT returns directly through Zoho Books in seconds.
Auto-scan documents to extract key data and turn it into invoices, bills, sales orders, and more. You can also attach receipts to transactions within the software for transparency.
The banking dashboard allows for painless reconciliation and automatic transaction categorisation. Through this feature, you can also get cash flow predictions for your clients' businesses.
Keep track of projects by logging time, either manually or by using the timer. Track billable hours and also assign projects to team members.

6. HelloTax

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HelloTax webpage with a pink banner underneath the top menu. A woman wearing a yellow shirt is folding her arms and there is information about tax compliance.

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HelloTax is a cloud-based tax compliance software for European businesses. Keep on top of tax returns for different European countries and put compliance on autopilot. HelloTax has a clean and crisp interface, with a dashboard that's easy to navigate and resources that are easy to explore. You can also become a HelloTax partner and receive monthly commission for helping European businesses remain VAT-compliant.

Main Features

Partners get access to affiliate links and promotional materials like flyers, banners, and guest articles. They can also get 10% lifetime recurring commission.
HelloTax calculates VAT and you can automatically file VAT returns through the software. Notifications will let you know when you need to make payments.
Tax Letter Inbox uses AI software to translate tax letters from different European authorities into English. The intelligent software extracts key information and organises it in your dashboard.
HelloTax eCommerce accountants can benefit from integrating the software with sales channels like Amazon, WooCommerce, and Shopify for a seamless transference of data.

7. IRIS Elements Tax

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Information about IRIS tax software and a woman in the background wearing glasses and smiling.

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IRIS Elements Tax is a cloud based solution that allows you to automate tax and accounting processes, as well as create intuitive workflows. This powerful software is suitable for businesses of all sizes but is particularly good for small and medium ones. IRIS is very much geared towards UK clients due to its HMRC and MTD-compliant features.

Main Features

Submit each client's tax return directly to HMRC through the software and retrieve data from HMRC too.
IRIS Elements is a HMRC-approved bridging solution with which you can transfer accounting data from bookkeeping solutions and spreadsheets.
Ideal for managing corporation tax, partnership tax, and personal tax.
The Affinity Partnership program helps you connect with clients, and build your revenue stream and reputation as a reliable accountant.

Choosing the Right Tax Software: Factors to Consider

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Here are some things to keep in mind when you're honing in on the right tax software for your firm:

Type of tax: Consider whether your clients will need to manage corporation tax, business tax, personal tax, or partnership tax.
MTD: If the majority of your clients are based in, or sell in, the UK, you'll need to choose a software that is MTD-compliant and HMRC-recognised when it comes to VAT filing.
Client support team: Research each software's client support team to ensure there's someone on-hand if you have any questions.
Type of clients: Consider the type of clients the software is suitable for, such as sole traders and limited companies.
Features and tools: Some software has some powerful integrations while others have robust practice management or payroll solutions. Consider what's important for your firm.
Final accounts and filing: Can you file a tax return directly to the appropriate authorities, such as Companies House and HMRC?
Ease-of-use: Features like practice management and accounts production might be invaluable but if they're clunky and awkward to use, you might want to consider whether there's a better option.
Cost: A lot of tax software is free for accounting firms while others require low monthly payments. These low-cost options can also come complete with features like practice management and tax management. Look at your budget and weigh up your options.

Tips for Getting the Most Out of Your Chosen Tax Software

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A blue pen by two boxes, one of which is ticked.

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Finally, here are a few tips for getting the most out of your software:

Sign up for free trials and demos to get a feel for a software before committing to it. This will give you a big insight into its usability and capabilities.
Look at review websites like Capterra, Software Advice, and GetApp to learn what other eCommerce accounting firms and businesses think of each software provider.
Take scalability into account so that when your firm grows, and your clients' businesses, the software can keep up and accommodate the increasing demand.

Put Your Bookkeeping on Autopilot With Link My Books

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On the left is information about unleashing efficiency with Link My Books. On the right is a woman on a laptop with integration logos floating around the laptop.

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The rise in international eCommerce selling has increased the complexity of tax compliance. With cloud-based tax software, you reduce the need to keep up with every-changing tax regulations of different countries and jurisdictions. And for those based in the UK, HMRC-recognised software will ensure you remain compliant with the government's MTD scheme.

When you're producing and filing your final accounts, it helps if your accounts production has been kept organised. The best way to do this is to put your bookkeeping on autopilot. Link My Books not only calculates your taxes for you, but it also automatically transfers financial data to your accounting software and puts it into the appropriate categories.

Link My Books offers all its new customers a two week free trial as well as a free onboarding session. Sign up today and see how it can transform your accounting firm.

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