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Best Open Source Business Tools?
An anonymous reader writes "My wife and I started an S Corp in 2009 mainly to provide small scale consulting services for friends with small businesses of their own (we build them websites and do odd technical jobs). Now that the year is closing I'm giving thought to our corporate tax filings which will be due March 15th. I've scoured the web for free/open source legal templates for hiring contractors, issuing W-2s, keeping shareholder minute meetings, etc, but haven't been able to find any decent sources. It seems like this should be a priority of the open source community since reducing the cost of entry into small business could drive open source development. What are the best sources of open source legal templates, tax filing software, corporate compliance templates, etc?" What experiences have others had with open sources businesses and the best way to consolidate the necessary corporate mojo into a workable model?
I agree that this could only be a good thing. However, most of the Open Source community consists of developers, sysadmins, and other technically-minded folks. By contrast, this is more of a legal issue.
I also wonder if anyone who provides such open-source legal templates might be exposing himself to liability. Suppose someone uses such a template and it turns out to be incorrect, even by some minor technicality, and as a result that person has additional legal expenses or other damages. They just might try to sue the person who produced the template. Unlike software, where disclaiming liability is a standard practice, legal advice or legal documents might be much more problematic. I am definitely not a lawyer but I hope a lawyer might take a moment to explain whether this is a legitimate concern.
It is a miracle that curiosity survives formal education. - Einstein
I'm not an expert in this field, but it would surprise me greatly if there were Free templates of the sort you seek. For starters, most business law is governed by state law rather than federal law, so the requirements will depend in large part on where you are incorporated.
Second, the sources for those templates would generally be the experts who derive their living from selling that sort of information (i.e. lawyers, accountants, tax firms, etc.) It is in their own financial best interests not to give away that which they need to make their own ends meet. Business law and tax law are very convoluted and generally require quite a bit of specialization.
I can see the possibility of Free tools for W2s and meeting minutes, but I'm skeptical as to the availability of legal and taxation materials. Also, even if they were available, I would go in with both eyes open because as a business owner, you're on the hook for making sure you're using correct and current information, and taxes in particular change with alarming regularity.
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Something cleverThe answer is there is none. Tax laws change yearly and unless get a team of lawyers from each state to donate their services to an open source project the software will not comply with those changes.
Most of what he's talking about sounds like things there are already existing PDF forms for at IRS.gov.
You are wasting your time.
The reason I say this is that, IME, OSS doesn't really deal very well with very niche requirements that aren't directly related to technology or anything that is not interesting from a technological standpoint.
Sending, relaying and receiving email? There's a plethora of products.
Writing a web application? Again, more options than I can even contemplate.
Filling out your tax return or paying your staff? One or two options which are generally terrible. Frankly, tax software is a fairly simple problem: start with a few numbers, add/subtract/multiply a few other numbers, send a cheque for the result to the tax man. The technically interesting bit is writing a generic engine to deal with whatever addition/subtraction/multiplication is necessary but writing the rules for that engine to deal with the various tax laws worldwide is mind-numbingly boring and there's no standard way such as an internationally agreed XML schema for the taxman to publish this years' tax legislation.
Software for your specific business niche? By definition, a niche.
Groupware? The only reason anyone's writing replacements for Exchange is because they can't stand Exchange. It's a mind-numbingly boring set of problems that nobody in their right mind is going to go near unless Exchange has seriously pissed them off or there's real money in it.
You want legal forms generated by Phil Grognard from his basement? No thanks - I trust Phil (mostly) to write software that doesn't crash all the time, but I don't want him looking out for my legal interests, and I don't particularly believe that he understands, for example, the limits of nondisclosure agreements with regard to pre-existing works in my particular state. Just use the Nolo books. They are inexpensive, far less expensive than 10 minutes of an attorney's time (literally).
http://www.ssa.gov/employer/
If you're doing well in your business, you won't have time to dick around creating "legal" documents and preparing your own taxes. That's what CPAs, and attorneys are for. If you had hired one of the two, he probably would have advised you to form an LLC rather than an S-Corp. But since you decided you knew better, you made a LOT more work for yourself.
You can get quickbooks from intuit for around $200 that will provide a lot of that. I also use a payroll company for $40/month to handle all the taxes and filings for payroll.
The issues here are legal, not technical, and you *need* to have legally competent people backing the products that you use in these domains. Also, tax law changes on an annual basis. Intuit has a team of lawyers helping them stay abreast, as does my payroll company. You do not want to end up in front of the IRS (or worse, tax court) and not have a leg to stand on.
I hate to say it, but it costs money to be in business. I just saw statistics a few days ago that 1/4 of payroll tax forms (941s) are erroneous, with the average cost being $670. Do the math. It's cheaper to pay the pros up front. I could go on and on, but, take it from me. I've paid plenty due to stupidity over the years. It's cheaper to put the right professionals in place to support you in your non-core tasks in the same way that people have put *you* in place to support them in their non-core tasks.
Do you have ESP?
So, on December 21, 2009 you have decided it might be a good idea to have some accounting and corporate secretarial records for the year 2009? Here's some free business advice - this is really something you want to sort out BEFORE you start operating, at least in draft form. Knocking up a bunch of retrospective meeting minutes, W-2s etc from memory and a box of unsorted receipts or correspondence is NOT a good idea.
That doesn't mean you have to become an expert accountant/lawyer yourself, but you should know the key ideas so you only have to pay accountants and lawyers to tidy up your accounts, taxes and contracts. When you see how much an accountant will charge you to create a complete set of accounts from a box of unsorted receipts in the peak Jan-Mar season, you will lean not to make that mistake again...
In any event, how is this "open source"? Template forms do not really have a "source", they are not programs. You mean "free", as in "I don't want to pay for them".
I realize that I may incite a religious war between the TaxCut camp and the TurboTax camp, but using a $75 piece of professional software seems like a good investment. Either would probably do, though I've used TaxCut for most of a decade for my LLC, and it walks you through the business filings pretty decently.
I'll presume that you chose an S-Corp for a reason, and won't badger you about using an LLC for a two-man shop. I will strongly recommend that you go over to irs.gov and read up on the S-Corp rules. There are a bunch of very helpful publications, and the IRS has gotten much more customer-oriented over the years.
There's lots of web-based stuff too, which is increasingly being offered as a part of a package with other services. Payroll processors are common, for example: they handle paying your employees (check or direct deposit), and as part of the deal withhold payroll taxes and applicable income taxes, send out W-2s to the employees, send the appropriate filings to the IRS, and keep the appropriate records. It's not just the software, but the fact that they also handle things like doing the direct deposit, which otherwise you'd need to set up and keep maintained.
I'm usually a fan of doing things yourself, but for $300-600/yr for a small company for services like those, I would probably just let them handle it, because the fixed costs for dealing with payroll for only a handful of employees are too high.
(I have in mind stuff like Intuit Online Payroll and SurePayroll.)
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
If you didn't have a good accountant help you set up the company, you should hire one pronto. If you're just now searching around for free software because you haven't been keeping appropriate accounting records, you're going to have some really late nights before tax time. There's a reason everyone uses Quickbooks -- it's cheap and it works. We just sent our QB files over to our accountant and he filled out a return for us. You also need to set up your ledger. This is much less about software than it is about legal requirements, accounting, taxes, and deadlines. The integrations that nearly everyone does for Quickbooks ($200 or free online), from payroll to shopping carts, make it almost a no-brainer. But it's not free. I ran a small business for four years. Accounting, billing, and record-keeping was a big pain in the rear. I'm a tech who likes to do tech things and solve problems. After four years of hiring, firing, paying, billing, filing, etc. I went back to being a regular employee at a big company. I even have health insurance now. And remember, all that accounting is not billable to your clients. (I also had a 15% discount to anyone who paid fast.) Seriously, don't mess around trying to figure out every tax rule on your own. Hire a professional. For $500, it's the cheapest way to have some piece of mind in case you get audited, which is far more likely in your status. Even intro to accounting is a two-semester course. If you can't afford it, remember -- most businesses don't make it past their first two years.
I've scoured the web for free/open source legal templates for hiring contractors, issuing W-2s, keeping shareholder minute meetings, etc, but haven't been able to find any decent sources.
Little do you know, you are looking for the "Nolo" series of books at your local library, you know, the library, the place where homeless people go for internet access... Your local library, unless its total ghetto, probably has the entire nolo series available to read and/or borrow.
Nolo has a website with a lot of marketing, yet also some information, at:
http://www.nolo.com/
Your best strategy is to skim thru, maybe even check out, the books that look interesting at the library, then purchase the most recent version from nolo for daily use.
I think, based on your description, you want their book "Legal Forms for Starting & Running a Small Business"
I have absolutely no connection to Nolo other than reading their educational books at the library when I was a kid, convinced me that the profession of lawyer-ing or whatever was not quite as interesting as it appeared on TV.
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
I think it depends more on how enlightened your state government is. They're the ones you'll have to file most of your taxes through, and the better ones (the ones that want to attract more businesses) have websites that allow you to e-file most of your work. That means the development is funded by taxpayer dollars, and if you can convince them to use open source for all of the standard reasons, so much the better!
There are several business-grade open-source accounting programs that might be of help to you, such as xacc and maybe gnucash and of course all the spreadsheet programs. But when it comes to forms used to submit all that data, you're left with what your state provides and allows.
And along the lines of "it takes money to make money", you're not all that worse off with paying some of these commercial companies to help you fill out forms and paperwork... just remember to translate it in terms of hours saved. I've used nannytaxes.com, and one of the employee tax form things (which are only maybe $6 a pop and include mailing/postage straight to your employees). Also I've used both the web-based TurboTax and the free filetaxes.com service to do some of my personal taxes back in the day, and it turned out that the extra optimizations and stuff they put in the $70 commercial product reduced my taxes for more than that amount compared to the free service. Plus, if there are any mistakes, the service should help cover your (and their) collective asses a tad more.
Also don't forget that money you spend on people to handle your taxes for you is itself tax-deductible.
So really, I'd say focus on petitioning your government tax collectors on using sane, web-based, open-standards, open-source software to run their end of the deal, and feel free to spend a pittance on whatever guaranteed commercial software gives you a financial edge on actually calculating and paying your taxes.
Sounds to me like he needed to consider all of this before starting a business.
I've had my business for about nine years - and we do lots and lots of IT management & consulting.
Regardless of how small your business is you need to hire a competent accountant. Free forms are no substitute for education and experience in this field, and you can seriously screw yourself over (legally *or* financially) if you don't know what you're doing. I use the services of a contracted attorney, a contracted general business accountant, a contracted bookkeeper and a contracted federal tax accountant. And I've only got three people on our full time payroll.
Relying solely on free forms is similar to saying, "This free Linux CD will handle all of my company's data processing, storage, management, security & protection needs by itself. We won't need any IT staff at all!"
The SSA web site allows for direct submission of W2 and W3 AND generates the required W2 PDFs for the employees.
Other tax forms-- For all other forms I use both the irs.gov and the state tax department web site. You may also enroll in EFTPS for direct deposit of Federal taxes (it may be required btw).
Contracts, etc-- get a legal forms book if you don't want to google around. When I began my business, I used one of the Nolo books. It was cheap, provided a good overview of business requirements, and typically the forms only required minor changes. Since then, I've using mostly the irs and the state department of taxation. Also, sign up for their newsletters, so you know when things change.
I spent a great deal of time looking for good web based, open-source accounting software, but found absolutely nothing that comes close to Quickbooks.
Right now, I'm using SQL Ledger, which is more-or-less OK, but the UI is firmly rooted in about 1990 and printing (especially checks) is really lacking. And while Quickbooks might run udner Wine, I'm really looking for something web-based so I can enter billing information and look stuff up from "wherever", instead of waiting to get back to the office.
Quickbooks Online might be an option, although for some reason, they support Firefox, but not on Linux (User agent switcher seems to make it work just fine).
As much as I hate paying for something every month, and don't really trust Intuit with my data, they're pretty much the only reasonable choice right now for a small business.