accounting professional – Page 4 – Cooper Mann Consulting

March 21, 2017March 30, 2017

Technology-Enabled Practice is Profitable Practice

A profitable accounting “firm of the future” is not out of reach for even the smallest of professional practices, because it doesn’t take a lot of people to develop a highly efficient and profitable operation. The key is having the right business foundation – the technology and the concentration on structure and process – which will serve the business for years to come. Profitability is really about effectiveness and efficiency… delivering more value and doing it in a more intelligent manner than the next guy. This is how the practice not only stays profitable, this is how it beats the competition.

Powered in part by efficiency created with technology-enabled business, professional firms find that they are able to realize increased revenues by billing for services, not by the billable hour. Data processing and performing the “mechanics” of the bookkeeping process is going by the wayside, with artificial intelligence and automation taking the lead in these areas. This creates the opportunity for professionals to broaden their scope of service and involvement with business clients. The higher value work, the tasks that most professionals would rather spend their time on, is now available because the lower value data entry and tabulation is handled electronically. When accountants are able to spend less time on entering information and more time on evaluation and analysis, business clients find greater value in the insight delivered from the engagement.

It is more than possible for the professional to develop new competencies in business technologies without having to invest the entire practice and put the client base at risk. Hosting and remote access solutions, for example, bridge the gap between on-premises computing and the cloud, delivering the benefits of mobility and anytime/anywhere working models without the complete transition to SaaS applications and web-based frameworks. This allows the firm to streamline production by taking advantage of connected systems and real-time data, which is at the core of efficiency in business.

The small business market is the economic growth sector, and the number of opportunities being presented to smaller firms is increasingly significant. With the correct technology and approach, small firms are able to compete at levels previously available only to their larger counterparts. The business of accounting is changing because the technologies supporting it are evolving more rapidly than ever before. The firms that embrace these changes and use them to improve and streamline practice performance are the firms that will achieve and sustain the highest levels of profitability.

Make Sense?

February 1, 2017July 3, 2018

What we’ve learned about desktop and application hosting for small businesses

Application hosting is pretty popular these days, and a lot of that popularity can be attributed to the proliferation of web-based and SaaS solutions that have clearly revealed the benefits of mobility and managed service. Not everyone wants to or can use a web-based application, however, causing demand for hosting of desktop applications to grow. Take a look at what’s going on with Intuit QuickBooks, for example. With all the push to QuickBooks Online, Intuit has created a surge in the demand for hosted QuickBooks desktop editions. Folks want their QuickBooks available for remote access and to support multiple users from different locations… but they also want to continue to use the feature-rich QuickBooks desktop products their businesses rely on. Hosting lets them have their cake and eat it, too. It’s the best of both worlds.

Back in 2000, there were a few in the tech industry that said the desktop would be dead soon. Business users wouldn’t be sitting down to work at computers, they would be using various devices to access their applications and data, from anywhere. Those early visionaries recognized that mobility was the coming thing, and that even the smallest of businesses would need what was at the time enterprise-class technology. I wasn’t so sure about the potential death of the desktop and the beloved applications businesses love to use, but I was pretty certain that “working online” with centrally-managed systems was the thing to work toward.

A lot of hosting companies started up at that time, and a lot of them went out of business just a few years later – some in virtual flames. Customers lost time, productivity, and in some cases their data. Investors lost their investments. It wasn’t that the service providers weren’t doing a good job, or that the technology wasn’t quite up to the task – the problem was the hype and the money. Too many people sat on the sales-side of the technology, making promises they couldn’t deliver and coming up short in meeting investor and customer demands.

Quite a number of years have gone by, and the market is still rife with promises unkept and solutions undelivered. But some of us in the industry have learned a lot over the years, so I’d like to share some of that learning.

Application hosting services gained popularity because they solved some major problems for businesses and their collaborators (including accountants, bookkeepers, remote workers, etc.).

Hosted application services allow everyone to work on the same software and data, regardless of where the user is located. Hosted application services provide centralized access for businesses with multiple locations or mobile workers. And hosted application services make it easier for contracted or engaged professionals like accountants and bookkeepers to work closer with their clients.

In the beginning, when we were just launching these hosting services, the equipment, facilities and expansive engineering labor requirements were really expensive so there was tremendous pressure to find ways to keep costs down. For customers, the plan was to pack as many users into the environment as possible, with volume representing a way to get a lower per-user cost. This concept paved the way for the accountant cloud server model, where it was suggested that an accounting firm could bring all their clients onto the cloud server to help keep the costs down. For a while that model worked pretty well, but then some issues started to be revealed.

With small business application hosting, particularly when dealing with QuickBooks, it should be recognized that nobody uses just QuickBooks.

There’s almost always a plug-in or add-on or some other solution that is also required with QuickBooks. Taking payments in QuickBooks requires a 3^rd party plugin if you aren’t going to use Intuit payment solutions. Downloading payroll data from another service may also require a plugin, as does the tax add-on and the order sync tool and the solution that integrates orders from the website or via EDI from vendors or suppliers. It is almost never just QuickBooks. When a provider tries to pack all that customization into a single server and serve a whole lot of different business, each with their own needs – things go a bit sideways. Servers hang, customer applications interfere with one another, and data gets compromised.

The next phase then was either VDI or dedicated service. VDI was and continues to be too expensive and complex when you have to factor in database engines, shared storage and such. Dedicated service (server) is a bit more straightforward and still has some economy of scale. With this model, each customer gets what they need. They’re still in a cloud-hosted environment so collaboration isn’t a problem, and every customer has the benefit of working with exactly the software solutions they need for their particular business. The challenge is serving just a few users. Even though cloud servers can be relatively affordable to get these days, it may still be too costly for one- or two-user situations. (Note that these are the folks that often find themselves compelled to try the online, web version of an application simply due to cost.)

The customized cloud delivery is the right concept, but many service providers still have problems supporting multiple applications for customers and often charge quite a bit extra while delivering a marginal level of service. You may find a provider who will try to deliver any application for you (and many will do that poorly) or you may find a popular provider that can only offer a particular set of applications for hosting. If the provider isn’t able to deliver the applications the business needs, or if they are unable to deliver custom or personalized service, then they are likely not the right provider for the business.

The emergence of public cloud services like AWS should make it easier for small businesses to get affordable computing power and customized cloud service from any IT provider, but it hasn’t yet.

The public cloud is still far too complicated for most small businesses to navigate or even get started with. Truthfully, it is difficult for many IT resellers and partners to navigate, too. Getting started is potentially costly in terms of time and resources especially for service providers, so those costs and complications end up reaching through to the customer. The public cloud just isn’t ready for the average small business to take advantage of directly, so on-premises servers or managed cloud server hosting are still the most viable options.

A big wrinkle in the whole hosted online application model is that many businesses don’t really need or want to completely outsource their IT to a cloud provider.

Considerations relating to privacy and proximity are paramount for many business owners, not to mention the trust factor. Lawyers, accounts, manufacturers… business owners in any industry may be uncomfortable considering moving their systems and information out of their immediate control. There could be regulatory concerns or logistical challenges, or it could be something as simple as realizing that there remain applications or data on computers on-premises that make an outsourced hosting approach more complicated and costly while delivering only a partial solution. Whatever the reasons, there remains a lot of in-house IT and that’s OK.

There is no doubt that business owners and their team members need and want mobility and secure remote access. They also want to work with the IT providers they trust and maybe they even want to continue working from servers they have already contracted for or purchased. Others may wish to leverage cloud platforms, but remain closely associated with their IT providers.

Forcing a business owner to migrate their systems to a hosting platform when all they really want is remote access or multi-user service seems a bit like overkill.

Granted, there are many benefits to be derived from outsourcing IT management and administration, like improved focus on the business, and various business processes and workflows could be more streamlined with a centrally-managed and fully accessible solution. Yet those benefits are the intangibles that businesses must discover after-the-fact, and are achieved only if the business works specifically towards those goals. In short, it isn’t necessarily what business owners are buying.

If we have learned nothing else over the years it is that things don’t move as quickly as we’d like them to.

The world never seems to end before your homework is due.

Software-as-a-Service hasn’t completely killed off desktop software, and smartphones and tablets haven’t ended the useful life of the desktop computer. What they have done is fully expose the desire and need for mobility and access, and have opened the doors for tools to address those needs better than the other approaches previously available.

jmbunnyfeet Make Sense?

February 19, 2016February 19, 2016

Is this email legitimate? QuickBooks Payroll ACH ID Changes go live on the 22nd!

Trusted QuickBooks Advisors – here’s another thing for you to help your clients with

Intuit recently sent an e-mail to QuickBooks Online Payroll (QBOP) and QuickBooks Full Service Payroll (QBFSP) customers about an ACH ID change. It kind of looks like a phishing thing, but it is really a legitimate email from Intuit, and it is important to pay attention if your company uses the impacted services and a banking feature called “debit filtering”. There isn’t much time to act, either, because the changes go live in 3 days (February 22, 2016).

Impacted services are QuickBooks Online Payroll and QuickBooks Full Service Payroll, so it is pretty important to address. Nobody wants their business payroll processes interrupted, and this could easily do just that.

Intuit has added some new ACH ID numbers for use with direct deposit and other processes which work with the bank, so customers using a fraud-prevention method known as “debit filtering” will need to contact their banks to add the new IDs or their bank transactions will fail.

Debit filtering allows customers to tell their banks which ACH IDs are allowed to perform transactions with the bank account, like removing or depositing funds. It is an extra level of fraud security that protects the bank account from unauthorized access, but it is also something that can work against the business if it is not managed. In this case, contacting the bank to add the new IDs is critical to keeping things processing and flowing smoothly. It is also important that the old IDs not be removed yet, as they may be tied to historic transactions that must be tracked and reported on for tax and other purposes.

“Is this really from Intuit? It seems like Intuit would have a better way to make such changes than to ask millions of subscribers to contact their bank”

Source: Is this email legitimate? ACH ID Changes; – QuickBooks Learn & Support

QuickBooks users don’t have much time to reach their banks and supply the new IDs, so pull the email out of the SPAM folder and call the bank right away. Intuit won’t be sending notices to the banks, and they have no authority to add different IDs to your approved list, anyway… which is a good thing. If just anyone could add an approved ACH ID on your account, then just anyone could get to your funds. Better to make the phone call yourself.

jmbunnyfeet Make Sense?

December 29, 2015

Report Right or It’ll Cost You (double)

Reporting requirements for business just keep growing, and so do the penalties for doing it wrong. New this year and just in time for the annual reporting season (makes it sound almost fun, huh?) are new forms to file and an increase in penalties for not making an effort to get the information correct and into the hands of the proper recipient. Failure to file by the due date can cost businesses $250 per item, up to $3,000,000 in penalties ($1,000,000 for small businesses). Add to that the warning about intentionally not filing or having an “intentional disregard of the requirements to furnish a correct payee statement”, which carries a penalty of at least $500 per payee statement and has no maximum penalty. Clearly, the cost of making sure the information is correct and filed in a timely manner is far less than the cost of not getting it done – or done right.

Growing problems around wage and revenue reporting have caused the IRS to pursue a variety of measures over the years to try to improve information reporting. The Affordable Care Act has also had quite an impact on wage and benefit reporting, increasing reporting requirements substantially. From the introduction of health plan reporting on W2s to the new mandatory forms 1095-C and 1094-C (for applicable large employers), businesses of all sizes are feeling the pressure.

February 2016 marks the date when employers and healthcare providers are required to file those shiny new IRS information returns regarding employer-provided healthcare coverage, providing a copy of the return to each employee much like a W2. The information would then enable the IRS to enforce rules established under the Affordable Care Act by revealing whether an individual might be eligible for a premium tax credit, or if an employer may be subject to non-compliance penalties. Penalties for failing to comply essentially double in 2016. And the IRS suggests that a “good faith effort” standard will be applied to information reporting, offering no relief for employers that fail to make the effort to file timely and correctly.

It wasn’t very long ago that 1099 filing requirements expanded substantially, forcing businesses to get far more detailed in their production of information to the IRS and to payment recipients. While this filing requirement impacted businesses both large and small, most lived through it (with the help of their trusted accounting professional!) and were able to comply. That effort informed the IRS on a wide variety of business payments and expenses not previously tracked, in particular payments made for services and non-employee compensation.

The increasing scrutiny of wage and earning information may also help in efforts to curtail tax refund fraud. Identity thieves use stolen (or borrowed) social security numbers to file false tax returns early in the year. Unfortunately, with the IRS motto of “pay first, prove later” the cross checking won’t likely be done until after the refund check has been sent. Once the task is performed, however, the taxpayer could end up getting a letter from the IRS stating that more than one tax return was filed using the social security number, they owe for a tax year for which they did not file a return, or the IRS indicates that wages were reported from an employer the taxpayer doesn’t know.

The IRS expects tax refund fraud to top $21 billion by 2016, which is an increase of 223% from 2013 numbers. Tax refund fraud costs every taxpayer. No wonder the IRS is getting tougher with the penalties for not filing information returns accurately or on time.

jmbunnyfeet Make Sense?

Following is the text from the IRS, which outlines the “Increase in Penalties for Failure to File Correct Information Returns and to Provide Correct Payee Statements — 31-JUL-2015

L. 114-27, section 806, increased penalties for failure to file correct information returns and provide correct payee statements for information returns required to be filed after December 31, 2015.

Penalties are discussed in Section O in the General Instructions for Certain Information Returns. The penalties in the bulleted list under “Failure To File Correct Information Returns by the Due Date (Section 6721)” are revised as follows.

$50 per information return if you correctly file within 30 days (by March 30 if the due date is February 28); maximum penalty $500,000 per year ($175,000 for small businesses).
$100 per information return if you correctly file more than 30 days after the due date but by August 1; maximum penalty $1,500,000 per year ($500,000 for small businesses).
$250 per information return if you file after August 1 or you do not file required information returns; maximum penalty $3,000,000 per year ($1,000,000 for small businesses).

September 23, 2015

Analysis, forecasts and modeling: What’s the point?

finance In today’s business world, risk, uncertainty and volatility are just par for the course – everyday realities of simply being in business. Nothing is certain, they say, except death and taxes. Yet there is a fine art to driving profitable growth in a business, and adapting to existing and emerging risk takes a great deal of experience, information and agility. While planning and process development may occur at many levels within the organization, it is the FP&A (financial planning and analysis) capability which helps top performing businesses be top performers.

Financial planning and analysis are activities central to enterprise performance management (EPM) and must necessarily extend beyond finance. Integrating various functional domains in the business (financial, operational and strategic), FP&A should bring data together from the various facets of the business and use the information to help structure and guide the organization toward meeting short-term and long-term goals. Among the most critical of the duties of FP&A is calculating the financial impact, the monetary effects, of potential business decisions. Everything in business means money, so there is always an impact to a decision. With the right information supporting the decision, it is far more likely to have a positive impact and a level of sustainability.

While many CFOs may recognize the importance of performance measurement, planning and forecasting, a great many also believe the process isn’t very effective. The cause is frequently the divide between the various domains in the business and the information systems supporting them. Operational data are distilled into summary financial information and fed to finance systems, losing much of the underlying intelligence that might be gained from analysis of the details. Strategic development and planning may overlook certain volatile elements in the market, or may base successful outcomes on an expectation that conditions within the business will not change. Finding ways to integrate the data from the respective domains into a comprehensive model is essential to developing a better and more robust forecasting and scenario-playing capability. With the right information, analytics may be applied to all facets of management decision-making, anticipating and shaping business outcomes far more effectively than could be done without the insight.

Small business owners may believe that things like “predictive modeling” and “enterprise performance management” aren’t things they need to worry about, but the small business could use this information just as beneficially as a larger enterprise – perhaps even more as the insight could be the key to small business survival and growth.

Using analytics, the owner is able to adjust and re-align strategy in real-time to keep on the right path and goals clearly in sight. Analytics can also help a business better understand what really drives revenue, working capital and profits. Analytics can even help managers align compensation and strategy with business objectives, preventing compensation issues from outpacing business benefit.

There is a cost to growing a business, and some strategies might be more sustainable than others. Time will tell, but it is great if the business owner has some business intelligence that might indicate what’s going to happen before it actually does.

Make Sense?

September 8, 2015March 26, 2019

The Cloud, The Desktop and QuickBooks

subtitle: Just When They Told You the Desktop Was Dead…

along comes another desktop app.

Everything is moving to the cloud! Everything is going online! At least, that is what they’re telling you. And, to a certain extent, it is true that a lot of things are moving to the cloud; just not everything. And some of what has moved in is moving right back out. Use of the cloud and cloud services is increasing, but that certainly isn’t proving that the desktop is going away anytime soon. The only thing we can be certain of is that things are going to continue to change fairly rapidly, yet the lion’s share of business users will retain working models they have come to trust and rely upon until they are forced to do something else. Today, many accounting and business professionals feel that they are being forced out of the software they have known and worked with for years: QuickBooks desktop software.

I was recently asked to present to a group of accounting and tax professionals, the topic being “alternatives to QuickBooks Online”. I thought it was interesting that this would be a topic of such interest, as QuickBooks has long been recognized as the market leading application for small business bookkeeping and accounting. Accountants and bookkeepers, as well as tax professionals, have worked with QuickBooks for years – many having even styled their practices around the QuickBooks brand and offering QuickBooks-specific training and other services. Why are these professionals now asking to learn about alternatives? Well, it is an alternative to the online version of QuickBooks that these folks are seeking, and they have been given the impression that the desktop editions of their beloved QuickBooks are no more and their businesses are being forced to change.

Due to Intuit’s focus on promotion of the QuickBooks Online edition as THE QuickBooks to buy, there is a growing belief that the desktop products are going away. Many professionals who have worked with the product line for years are now operating under a belief that their only future with QuickBooks is with the online edition, so they are searching for alternatives for their clients and their own practices. The QuickBooks Desktop editions aren’t being eliminated (2016 editions and certifications coming!), but any real mention of them in the direct marketing is gone, because Intuit isn’t pushing these solutions to new customers. It is no wonder the accounting and tax pros are looking at alternatives – and their customers are, too.

QuickBooks has always been a direct-to-consumer solution and was pretty much the only thing a small business owner would find if they shopped for software at the local computer or office supply store. The high-value desktop editions continue to be available, but it is difficult to tell a business owner they need to purchase licensing and then pay for mobility for QuickBooks desktop editions while QBO sounds much cheaper and they can get it on their tablet or PC for that cheap price. Also, there is more shopping online – from phones and tablets as well as PCs – so consumers are being exposed to other brands and the plethora of new online solutions. Now that they are considering buying or changing accounting/bookkeeping software… they could just as easily elect to use something completely free and not spend anything with Intuit or anybody else.

The small business owner isn’t focusing on the qualities of the accounting solution or how it impacts their accounting professional’s processes – they are focusing on monthly price of the solution. Accounting professionals are now recognizing that the software isn’t (or shouldn’t be) the basis for their practices, it is simply a tool. And there are a LOT of tools available to work with, not just QuickBooks, so the value of aligning solely with that solution is perhaps not as good an idea as it once was, but it is not gone. There is still a tremendous volume of work to be done with businesses using the QB desktop products – you just wouldn’t know it from the marketing hype around QBO.

The thrill of exploring SaaS (software-as-a-service) and online application models has introduced new competition in markets where the dominant player once felt secure (small business accounting, for example). While Intuit’s QuickBooks products were a defacto standard and essentially owned the smb accounting market, the diminished response to the QBO product has created opportunity for many newcomers. Xero, for example, has been able to make great progress, even recruiting long-standing QB ProAdvisors as Xero advisors and promoters. gnuCash, once a bit of an outlier, is getting new business because it IS desktop based (some people like that!) yet it doesn’t require an an ongoing commitment to internet connectivity or to pay fees to the developer. NolaPro, Wave, Freshbooks and more are growing in popularity as more freelancers and small business owners begin using applications other than spreadsheets to manage their business finances. The generation that grew up with online banking is now readily adopting computerized bookkeeping, but they aren’t necessarily interested in QBO. Still, a great many move to QuickBooks desktop editions because QBD is a recognized and respected solution.

It also remains to be seen what happens with usage of some of these online smb accounting solutions when the business reaches some size or complexity. While they may be highly useful for startup or freelance business, many are not likely to satisfy business requirements far into the business lifecycle. This is when the going concern and growing business demands more functionality and performance, which often becomes the catalyst for seeking faster and more powerful software and systems and has been a driving force for businesses returning to locally-installed or hosted accounting and ERP solutions. Along with QuickBooks desktop editions, Sage is positioned extremely well here. The Sage 50 solutions (good old Peachtree!) can scale and also have very strong accounting functionality. These were actually the preferred solutions for most accounting pros for a time, but the momentum of QuickBooks pushed them to the side. With the attempt to now leverage the QB user base to the QB Online solution, Intuit has created the opportunity for Sage to regain a position with accounting professionals and their clients who demand more.

As these software and systems have (in some part) migrated from the local infrastructure to the web, we have also seen a lot of hybrid or “tweener” approaches come about. These approaches, just as cloud service of any type, come in many varieties and exist to solve different problems. The problem of browser-based functionality and modality is among the issues identified with QBO. The browser-based app doesn’t allow for multiple operating windows – you have to use browser functionality for that. And it is relatively slow – performing data updates and screen refreshes like with a website and not as one would require of a business application. The solution provided is a great example of a hybrid approach. The desktop app for QuickBooks Online (yeah) is a software app that comes in a flavor for Windows and Mac, and which provides more of a desktop user experience even though it mimics the interface and connects to the data of QBO. It is faster, and multiple windows can be used, and more… which are some of the great benefits of running software on the local device and why desktop software is so great a performer. This hybrid model simply allows for desktop software to work with cloud-stored data and back-end processes, and potentially delivers some of the best of both technology models: cloud and localized.

If you consider how much of the actual QuickBooks desktop product has been turned into web service (payroll, merchant processing, etc), it seems like QuickBooks desktop is already beginning to be a bit of a hybrid approach. And when QB desktop is run with a hosting service provider, the whole thing becomes available anytime/anywhere. Hosting is the way to provide the management and mobility aspects of QuickBooks and other desktop software. The hosting model delivers benefits of cloud service – providing users with all the features and functionality of the desktop solution – and introduces the system management and mobility that is part of the underlying value of a web-based or SaaS application approach.

The real discussion, I believe, is not about the death or near death of the desktop and locally installed applications – that’s just silly. Even phones are now being touted as possible desktop replacements, as the processing and storage capacity has increased to rival the most useful portables and laptops. Clearly, devices continue to be more powerful and capable, and these advancements aren’t done solely to make web browsing more enjoyable.

pendulum Devices are more powerful so that they can run more applications – fast – and deliver more useful functionality to the user. Maybe the data will be in a cloud, and maybe even some app functionality will be delivered via a cloud, but it is very unlikely that everything will be in the cloud. Complexity and cost drove developers to seek out alternatives, and advancements in technology will introduce new options that change everyone’s thinking again. While the pendulum did swing to one extreme (move it all to the cloud and off the device!), we are now seeing it swing back in the other direction a bit and those who didn’t swing all the way the first time are in a position to reap some benefit.