I have encountered way too many small business owners that use Square, and think they need nothing else to keep track of their entire business. Let’s explore just what Square is, what it CAN do, and what it CAN NOT do.
Square is a great tool for many small business to start accepting credit cards, and since it’s cloud based, they can accept those payments virtually anywhere. There’s no fees to set it up, no applications to fill out, you just sign up, they send you a free reader, plug it in, and you can accept those credit card payments. There’s optional equipment you can purchase, like a terminal or cash register. For extra fees, you can gain access to a decent inventory management software, and for even more fees, you can run your payroll through Square too. Sounds like a complete business package, right?
WRONG! You are missing the fact that Square is NOT bookkeeping software. It’s a Mobile, Point-of-Sale system, that offers some inventory and payroll capabilities. Square does not keep track of your expenses, like rent, utilities, mileage, business credit card balances and payments, loans, assets, depreciation, etc. It does charge your customers sales tax, but you still have to file your monthly sales tax report and send that money in. It does keep track of inventory, but it’s capabilities are limited, and it will e-file and e-pay your payroll taxes. But there’s a reason why Square promotes it’s integration with bookkeeping software – because it’s NOT bookkeeping software.
It’s a great POS system, but please business owners, stop thinking Square is all you need. I promise, your Accountant will love you at tax time for knowing the difference.