Category: accounting technology

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The IRS is Spending a Lot of Money to Make a Lot of Money | cashlessandpaperless

Electronic documents and paperless solutions are supposed to help make our lives easier.  By eliminating the paper documents and working with electronic ones instead, users would be able to efficiently manage all their valuable information in one place.  Even more, this information could be shared electronically (swiftly and simply) with others.  However, as most advancements in technology have demonstrated, every solution comes with its own new set of problems.  Where accounting and taxes are concerned, tax payers and the IRS alike are dealing with the impacts of accounting for and substantiating “cashless and paperless” transactions and other activities.  It seems that the IRS is spending more time and resources (=money), expecting that a frontal assault armed with digital records will provide a basis for improved tax collections.

“If you’ve recently been involved in an IRS audit of a business, you have likely seen the agent enter the room fully prepared with copies (subpoenaed) of bank statements and other documentation. It used to be the tax payer who had to provide all the documentation, and the auditor simply used that material. These days, it has become too easy to falsify or improperly change information in electronically stored files (using Photoshop or other tools), so the IRS has lost trust in the data tax payers provide. Instead, they spend a great deal of time and resources collecting this information for themselves (because they can), and then use their copies of the data to compare the data provided by the tax payer.

The IRS will accept electronic records in lieu of original paper documents in many cases, and this is often because they have an ability to validate the content of the electronic records through comparison. Yes, the IRS can collect electronic banking information from financial institutions and other sources, just like the account holder can. It’s become more of a “guilty unless you can prove you’re innocent” approach, and puts the tax payer in a purely defensive posture. Even more, it assumes the tax payer has the sophistication and tools necessary to access and manage all of that electronic data effectively.”

read more at: The IRS is Spending a Lot of Money to Make a Lot of Money | cashlessandpaperless.

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Many Companies Are Negligent About SAP Security, Researchers Say – CIO.com

Is your hosting service provider helping to keep your critical business applications secure?  It is not enough to simply harden machine images and develop policy-driven access; application hosting providers need to understand the vulnerabilities introduced by each and every application in the environment.  Otherwise, the system could be exposed to threats directed specifically at the application environment and opportunities it presents.

Many hosting providers will offer customers service for any business application they have, and often provide those services with no significant experience or expertise in dealing with configuration or security issues specific to those applications or environments.  Consider the following report from IDC which indicates that numerous SAP deployments remain vulnerable to attack or intrusion, even though SAP has improved security of the products. The problem rests not exclusively with the SAP applications, but also with the approach to implementation of systems and security around those applications.  Understanding the various vulnerabilities introduced with SAP products is the first step to securing them.  Certainly a skilled IT solution provider is likely to offer a high level of service and capability, but there may be issues presented by various products (like SAP) which introduce additional or unique considerations, and it is important for the service provider to be aware of and address them.

Joanie Mann Bunny FeetMake Sense?

J

IDG News Service — SAP has significantly improved the security of its products over the past few years but many of its customers are negligent with their deployments, which exposes them to potential attacks that could cripple their businesses, according to security researchers.

The biggest issue is that companies expose insecure SAP services to the Internet — not only HTTP services, but also critical administrative interfaces, Alexander Polyakov, chief technology officer at ERPScan, a developer of security monitoring products for SAP systems, said Tuesday.

Between 5 percent and 10 percent of companies that use SAP products expose critical services to the Internet that shouldn’t be publicly accessible, Polyakov said. This happens because they want to enable remote management or because of improper configurations, he said.

Most of the services have vulnerabilities that can be easily attacked, Polyakov said.

Publicly available exploits exist for many SAP vulnerabilities, including some that are part of Metasploit, a popular security testing tool.

The percentage of companies with exposed SAP services differs from country to country. The situation is better in North America and Europe and worse in the Asia-Pacific region, Africa and Latin America, Polyakov said. However, even 5 percent translates to a very large number of companies, he said.

via Many Companies Are Negligent About SAP Security, Researchers Say – CIO.com.

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QuickBooks In-House Hosting Services for Accountants

QuickBooks Hosting Services for IT-Capable Accountants

DIY-SelfHostingSmall businesses in large numbers are looking to the cloud as a platform to deliver solutions for the problems of escalating IT costs, mobility, and remote access to business data. The cloud is also becoming the recommended platform for the delivery of services from accounting and bookkeeping professionals, as the benefits of remote data access and real-time collaboration nicely address the requirement for accounting pros to exchange and share information with their business clients. One of the popular “cloud” hosting solutions addressing a collaborative accounting model is a hosted application approach to using Intuit QuickBooks desktop products. While accounting professionals may be aware that QuickBooks can be hosted by 3rd party providers, many firms are not aware of what is referred to as the “self-host” model, which is a QuickBooks hosting model for accounting firms with some in-house technical capability.

For small businesses and many accounting service providers, working with a 3rd party hosting provider makes a lot of sense, as the host has the infrastructure and the support organization necessary to service large-scale hosted customer requirements.

On the other hand, there are a lot of accounting and bookkeeping firms which have skilled in-house IT personnel who are more than capable of creating a hosting environment to serve not only their internal needs, but also to meet basic requirements of the QuickBooks-using clients they work with. It makes sense to explore the possibilities of implementing a “self-hosting” model for client access to QuickBooks, overcoming the cost and other barriers involved with 3rd party hosting services.

When an accounting firm works with a number of clients with QuickBooks desktop edition files, the firm has to install and manage not only their own software products, but also the relevant QuickBooks software products in use by the various clients (must have the right QB program in order to open the QB data file). This often puts an undue burden on the internal IT systems of the practice which has its own internal-use software and systems to support. With an internal hosting approach, the firm can provide standardized/centralized application hosting services to their clients, building their own “economy of scale” on the platform and reducing the IT management while achieving all the real-time and remote access benefits of an outsourced hosted model. The firm does not experience a retail cost for a hosting solution, and the cost to host the client is generally offset through the efficiency gained at the firm level through direct access to client data and applications.

The technical model for delivering hosting services to a relatively small client base is not overly complicated. Commercial service providers have complex architectures because they must serve a large and diverse client base, and they never really know what sort of devices (computers and printers) or connectivity the customer may have. Commercial providers have to be prepared to deal with any and all situations, where a “self-host” firm needs only to concern themselves with supporting their particular client users and use cases. Additionally, when the solution is offered as part of the accounting or bookkeeping service, the support requirements of the customer tend to be focused during mutual working hours, as opposed to the 24×7 support demanded of the commercial host.

As accountants and bookkeepers search for solutions to improve efficiency, increase profitability and differentiate services, it makes sense for those serving QuickBooks desktop clients and having an in-house IT capability to explore becoming a QuickBooks self-host. It is one possible way to eliminate cost as a barrier to working closer with QuickBooks desktop clients while providing the mobility and collaboration businesses need.

 

Make Sense?

Joanie Mann Bunny FeetJ

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e-Discovery in the Cloud: Benefits versus Risks

e-Discovery in the Cloud: Benefits versus Risks

After many years of working with business professionals in “enabling” their organizations to make better use of technology, I must say that it is a bit frustrating trying to get folks to understand that this new and wonderful cloud computing model (or Internet-based computing, SaaS, or whatever-you-want-to-call-it computing) is still just technology.  It uses computers and disk drives, it runs software, it takes electricity, and it was developed by human beings.  It can break.   It’s not magical and perfect and you can’t get the good stuff for free.  Swim at your own risk.  So, assess the risks, and measure the benefits against the risks and costs.  For many, the benefits outweigh the risks, as cloud computing approaches can deliver advanced capabilities at cost levels not previously available to most businesses.

No industry is immune to the security and access considerations surrounding a cloud computing model.  Particular those lawyers involved in e-discovery (all of them) have recognizing the potential benefits – and tradeoffs – of the model.  This reality was clearly revealed at the ILTA (International Legal Technology Association) 2010 event in Las Vegas.  While the discussions at the conference were oriented specifically towards the legal profession, the IT-related discussions are totally relevant to every business.  Accounting and finance professionals should pay close attention to this type of conversation, as it relates very directly to accounting’s approach to information technology and the application of IT in the business or professional practice.

In a recap of the event entitled ILTA 2010 in Las Vegas: Strategic Unity, Defensibility, and the Cloud, author Chris Dale discussed that professionals in both public and corporate service must work with the IT departments towards a common goal.  “IT is no longer just a service department providing an infrastructure, applications, training, and troubleshooting.”  While these elements still remain as critical aspects of IT, the role has grown to also incorporate considerations for collaboration (collaborative information management), mobility, and social media.

Recounting one session attended, called Defensible Ediscovery Processes, the author related the variety of definitions provided to the general term” defensible”, which were pretty amusing.  These definitions ranged from “protected against attack“, to “less lousy practices“ or “practices which suck the least” (my personal favorite), and finally, “what you can get away with without being found guilty of spoliation“.  From these definitions then came qualifiers, such as “reasonableness” and “faith”.

Why would defensible processes be important, and how does this relate to IT or cloud computing?  An example of the element of “faith” came up in this context: ” how can [lawyers] have faith that the technology is delivering the right answers?”  A panelist gave the sample of “an email retrieved from (or possibly not retrieved from [love those lawyers]) a system, with 26.5 pages missing.  How can you be sure that the systems which you are using will not do that to you?”  These are valid questions in any IT environment, and are no less important when considering a cloud-based technology model.   The trade-offs are related to perfection in functionality and performance of the solution versus cost, and should be measured in proportion to one another.

The tradeoffs may come in a variety of areas, with collaboration and connectivity being the primary drivers (collaboration) and barriers (connectivity) to the model.  Businesses are more than ready to adopt cloud computing strategies based on the belief in improved collaboration, access to information, and improved IT management,  but tend to overlook the offsets in the areas of bandwidth availability (and consistency), application functionality (or lack thereof), and level of support available from the provider.  In support of this argument,  Jerry Justice (IT Director for SS&G – Certified Public Accountants and Advisers) posted in a LinkedIn discussion on the topic that “by design the Internet is ‘reasonably’ connected, but not the same as a well-connected [local] network.  the upside is it gives you the ability to connect from great distances, the tradeoff is that you experience variable connectivity.”

“The underlying issues are that there is a paradigm shift to working on the Internet (from working in the office) and then another shift when you add in cloud-based environments (versus local apps).  It is possible to be very productive, but .. you have to adapt your approaches“.

The idea “that perfect must be qualified by cost and proportionality” was also discussed in an ILTA session on cloud computing which included panelists from Autonomy iManage, Mayer Brown, and Ernst & Young.  “Cloud computing remains a contentious area, with no obvious agreement even as to what the term means, let alone as to its implications” wrote Mr Dale in his recap of the event.  While the panelists held differing views, the representative from Mayer Brown held a position similar to Mr Dale, in that it is important to “dissect the objections one at a time, accepting that there is room for more than one view, and testing arguments against the alternatives.  Arguments based on pure cost are pretty compelling, and if one method of achieving an objective is very much cheaper than the others, then the burden shifts to those who argue for the more expensive route.”

Discussions went on to describe differences between public cloud providers and others, who segregate customer data in “private and identifiable silos”.  “The key word here is identifiable“, writes the author, “which connotes a geographical certainty as well as anything else.  I sometimes wonder if the imagery associated with cloud computing (invariably a jagged line disappearing into some cumulus) does not leave some people with the idea that their precious data is indeed floating in some inchoate container up in the air.”

“If you neglect to provide in your contract that your data remains in a specified jurisdiction, and if you fail to conduct proper due diligence checks on the provider, then you deserve all you get.  Like any risk assessment, it involves weighing cost against other factors; most of these other factors are definable and quantifiable“.

I couldn’t have said it better myself.

Joanie Mann Bunny FeetJ

original post March 24, 2011
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A Holistic Approach to Cloud IT

holistic: a. Emphasizing the importance of the whole and the interdependence of its parts.

The Internet and cloud computing solutions can help businesses create an environment which allows team members and clients to work together more efficiently; where information can be generated once and used in a variety of ways by different users.  With this new capability to share documents and files in real-time, many businesses are finding that they are generating more electronic information today than ever before – and they’re having a hard time keeping these information assets organized.  With paper documents being digitized to allow for electronic distribution, OCR, and intelligent connecting to transaction data – lots of stored data is being produced and stored in a variety of places.

There are many technology models available, so there are a lot of options for businesses today – options which address the fundamental requirements to convert, store, secure, and distribute the various data types within the enterprise.  When a business elects to use a variety of cloud solutions or providers to address a number of business problems, how does that enterprise wrap its arms around the content which represents, in all actuality, the sum of business intelligence in the enterprise?  Keeping tabs on the business data is critical, but tracking all the data when it is stored with a variety of providers may be very difficult.

Example: If your business uses an online CRM such as Salesforce.com, runs QuickBooks on your local PC, and uses Gmail for email service… exactly where does your business data live?  With Salesforce?  On your local PC?  At Google?  In all 3 places?

Containment of distributed data isn’t the only issue facing businesses today.  Longevity and long-term access to data is a concern, as well.  Solutions and providers that exist today may not exist tomorrow.  If you have data invested in a solution with a short life span (and you probably won’t know this is the case until it’s too late), you may orphan your data and not be able to access it later.   And, if you can get your data from the provider, is it in a useful form or did you lose functionality when you lost the solution?

Example:  Intuit once introduced a paperclip (attached documents service) in QuickBooks, and offered the attached document feature at no charge.  The “free” service from Intuit encouraged a lot of users to migrate from other QuickBooks-connected document management solutions. Then… Intuit announced that the attached documents service would no longer be free.  Users with the service could still get to their documents via a web portal, but not from within QuickBooks, and certainly not as attachments to transactions or other records. Then the attached documents feature was once-again changed, allowing only storage to local PCs rather than on Intuit’s servers. Then, it went away entirely. 

Another issue facing businesses operating in the cloud is one of vendor lock-in (or lock-out), and being able to address the total business requirement.  Point solutions and vendor-specific solutions may address certain business problems, but generally aren’t able to handle all of the needs of a given business.  If your online solution doesn’t address the needs of the entire business, you risk increasing production costs and reducing productivity through duplication of data entry and other activities.

Example: An accounting firm with an insurance division uses Thomson Reuters Virtual Office service, which delivers certain accounting applications along with Microsoft Office on a remote desktop type of connection.  Unfortunately for the firm, the users operating in the insurance division use applications that aren’t supported or available via the Virtual Office solution.  So, certain users have completely disconnected services – a remote desktop serving up their Office apps, and a separate browser-based solution – neither of which integrate or work together.  The complexity and confusion caused by this situation has done little more than increase the burden of duplicate data entry, recreation of documents, and constant download-save-upload activities.

In each of these cases, a “holistic” approach to cloud IT services might have produced better results than by looking at each application or functional “solution” individually.

As an example, consider that a business with in-office and mobile employees needs to use accounting, office productivity, contact management, documents storage, and several browser-based solutions in order to provide the functionality and operational support necessary.    While many of these solutions are individually available online, the business opts to work with a single outsourced IT provider to create their own “private cloud” environment.

The solution includes remote/virtual desktops, hosted accounting applications, hosted Office applications, hosted browser (to allow browser and Internet-based apps to integrate with Office and other apps on the remote desktop), hosted CRM, and hosted document management… all applications that the business selects and might even have been using for years are included.

All  applications are delivered on the remote desktop environment, providing users with the ability to open documents instantly, save and share files seamlessly, and participate in a central company-wide document store.

All applications are licensed to the business, so they have the flexibility of returning to local IT operations simply by implementing their own software in their own network and taking the data off the host.

Because all of the business data resides on this single hosting platform, the business is able to not only keep control of all information assets, but is also able to back up and protect (preserve) that data in its entirety.

Now doesn’t that make sense?

J

Learn more…

 

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Are the security requirements for accounting and finance professionals using cloud services any less stringent than those governing lawyers?

jmbunnyfeet

As accounting and finance professionals look to the cloud and Internet technologies to address collaboration, mobility, and improvements in service delivery, they should also be looking at ways to ensure the protection and security of client financial information.  Professional services organizations of all types are embracing cloud products and services, sometimes without properly considering how it might impact information security and business risk.  The security requirements for accounting and finance professionals using cloud services are no less stringent than those governing lawyers.

In her article “NC Bar Council issues final opinion on the cloud “, author Nicole Black points out some of the essential considerations for using cloud computing services in a professional legal practice.  Accounting and finance professionals should recognize this guidance as being applicable to their businesses, too.

The main question stems from the ethical issues faced by “lawyers who intend to store confidential client information on servers owned and operated by third parties”.  An opinion issued by the North Carolina State Bar Council addressed two primary questions in this area:

1.     Is it OK for a law firm to use Software as a Service or cloud computing products?

2.     Are there any special vendor assessments or other measures which should be taken by lawyers who wish to minimize the security risks of implementing this type of solution?

Read the entire article by Nicole here (PDF format)

Nicole Black is a Rochester, New York attorney and the Vice President of Business Development and Community Relations at MyCase, a powerful and intuitive cloud-based law practice management platform. She is also a GigaOM Pro Analyst and is the author of the ABA book Cloud Computing for Lawyers, co-authors the ABA book Social Media for Lawyers: the Next Frontier, and co-authors Criminal Law in New York, a West-Thomson treatise. She is the founder of lawtechTalk.com and speaks regularly at conferences regarding the intersection of law and technology. She publishes four legal blogs and can be reached at nblack@nicoleblackesq.com.

Joanie Mann Bunny FeetJ

original post April 5, 2012