Tag: information technology

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Should you be paying sales tax on your cloud solution?

Should you be paying sales tax on your cloud solution?

There are a lot of undefined issues relating to whether or not sales taxes should be charged and collected on “cloud” services and online applications.  Traditional approaches aren’t quite right, because there isn’t a clear delineation of what is “service” versus “product”.  For example, an online storage service may be “service”, but when you are charged for bandwidth or other elements, it starts to be more product oriented and taxation may apply.  Online applications or cloud hosted software?  In some cases, the platform may be service, but the subscribed application may be taxable software.  It’s a clouded issue for service providers and their customers, alike.

‘Kelley Miller of the law firm Reed Smith, who specializes in technology law and specifically tracks how states have been enforcing cloud taxes, says it’s been a tough issue for states. The DOR says in its ruling that the market is evolving “at a rapid pace.” Traditionally tax laws just don’t work for this new era of cloud computing, she says, because there is not a tangible transaction of a disc or piece of hardware. Massachusetts seems to have echoed findings from other states though, she says. “The essence of the question is, are you buying software that people bought in a box at the store 10 or 15 years ago,” she says. If so, then Massachusetts, and other states, have claimed a right to tax it.’

A recent article on CIO.com discusses Massachusetts rulings on the subject, joining a number of other states in attempting to bring clarity to when cloud computing services should and should not be taxed.  The decisions sound almost as complicated as the underlying issues, so “clarity” obviously doesn’t mean simplicity.

Read the entire article here

Make Sense?

J

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Online Accountants and Their Clients: Working Smarter, or just Closer?

Online Accountants and Their Clients: Working Smarter, or just Closer?

There are a wide variety of ways to work closer with your clients, and the thing that you will always want to remember is that “one size does not fit all”.  In other words, not every client will like using your favorite technology or software, and not every business owner will recognize your suggestions as solutions, because perhaps they did not recognize the problem in the first place.  But that’s OK, and perhaps how it should be.  You see, using the right tool for any given situation is the proper approach, rather than trying to shoehorn everyone into the same solution or method.  With a client-centric approach, you can still develop consistent internal processes to keep your service delivery as efficient as possible, because many of the core services you provide are consistent across the client base regardless of the solution in use.  The trend is to help your client work smarter, and it will bring you closer to the client than ever before.

Determining what is right for each job or task should be part of your value, whether it’s deciding how to connect remotely with your client, or helping your client find the right software system to support their tasks, with you ensuring that the integration to the accounting system is there and working properly.  Where the focus was once placed on accurate data entry, now it’s on placing the proper solution in front of the user, and through the use of the solution to perform their various tasks, the necessary data is collected. Accounting professionals should recognize that the collection of information in real time facilitates better business decision making, and that they can be instrumental in delivering this decision support resource to their client.

As an example, I know the owner of a small construction business.  This guy runs around with estimates, invoices, receipts, and other paperwork in his truck, and getting him to stop long enough for his bookkeeper to collect all that paper from the truck cab is one of the hardest and most annoying jobs she has.  Her focus is on collecting the paper and then entering the data and getting invoices and reports out.  The accountant is frequently requesting more information or clarification of data, as well as the information necessary to meet various reporting deadlines.  Even after implementing QuickBooks accounting in the office for this business, the ultimate problem wasn’t solved.  Certainly, the information is better-organized and accounted for once collected and entered, but the business owner still lacks timely information about the performance of his business, and sees little additional value in his accountants participation beyond the annual tax return.

On the other hand, I know another guy (landscaping this time) who has an accountant that has him use his phone to record just about everything he does as he does it.  He bids a job, and sends it via email.  He gets paid for a job, then snapshots a copy of the check and deposits it.  Buying equipment or supplies?  Sure, but electronic payment and approval tools let him track that as it happens, too (again, snapshot a copy of that receipt, etc.).  For this business owner, there is more business going on because less time is being spent doing the paperwork of business.  The bookkeeper in the office has the information necessary to keep things up to date, and can focus on how to streamline things even better.  The accountant has a much higher quality of information – faster – upon which to advise the client (which he has time to do, because he’s not cleaning up bookkeeping data or collecting information for reports and returns).  This business owner sees much more value in the participation by his accountant, because real issues are able to be identified and addressed in time to make a difference.

So, for today’s accounting professional, bookkeeper or consultant: is the idea of “working closer” with your client simply the concept of working remotely on the same systems at any given time, or is it to know more about their business and to help them do business better?

Make Sense?

J

Read more about Data Warriors: Accountants in the Cloud

Read more about using the cloud to extend “connectedness” beyond traditional boundaries

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Is your purchasing and expense approvals process holding up your business?

Is your purchasing and expense approvals process holding up your business?

When a small business owner hears about purchase and expense tracking, they immediately think of traveling sales people needing reimbursement for plane tickets, hotel rooms, and meals.  For others, it is a process geared towards control, making sure monies aren’t being spent where they are not approved.  Either way, purchasing and expense approval processes are generally viewed as “necessary evils” of doing business, and as such are often facilitated with spreadsheets to which receipts, invoices, quotes, or other documentation is attached.  Reviewing and approving this information is generally a manual process which takes time and attention from other activities.

When times are good, when credit easy to come by and everyone is fat, no one sweats the small stuff. But times haven’t been good for a while and today the small stuff looms large, especially in small businesses trying to grow at a time when investors and customers are wary.
CFO.com (http://s.tt/1kq4O)

Yet, as with so many things in business and in life… it’s not a problem until it becomes an obvious problem.  Most businesses don’t really recognize the amount of time they invest in these types of reporting activities, much less realizing that there are bigger business benefits to be achieved if only they would leverage technology to intelligently address the process.  Redundant information entry and exchange is reduced, accuracy of expense reporting is improved, and data collection and integration eliminates the impact of re-entering  information, or time delays in manual paper-based processes.

The growing problem at Blade, Verbeck says, was not so much that money was being misspent as that the work was burning up his and the finance department’s time. Requests and invoices piled up on his desk, distracting him from more valuable tasks, while employees were either waiting to purchase the stuff they needed to do their jobs or buying and expensing it.
CFO.com (http://s.tt/1kq4O)

In a recent article on CFO.com, David Rosenbaum describes several business experiences in addressing the payables approval process, and the benefits achieved through solving what was once not recognized as a problem.  From simply reducing the amount of money spent on nonessential items, to finding cancelled contracts still being paid, a structured and intelligent approvals process can make big differences in a variety of areas.  The essential element is a structured and intelligent process and not one designed simply to factor the spend into the cash flow.

The savings that can be retrieved by automating and rationalizing approval and purchasing processes are palpable (a 2009 Aberdeen Group study estimated that “improving the percentage of all non-payroll, tax, tariff, and fee-related spend” — that is, indirect, nonstrategic expenses — brought under the management of a dedicated group can help enterprises “achieve a 5% to 20% cost savings for each dollar brought under spend management”). But the real value, says Kristen Lampert, corporate-services manager at specialty-investment bank Ziegler, is de-risking organizational spending by making sure the approval chain has the right people weighing in on the right things.

There’s an old saying that “if all you have is a hammer, then every problem looks like a nail”, and Microsoft Excel has been the hammer of choice for many businesses over the years.  However, there are some things that can (and perhaps should) be done better and more efficiently with a solution designed specifically for that purpose.  Not everything is better in a spreadsheet.

Make Sense?

J

Read the entire article on CFO.com

  • Read more about using the cloud to extend “connectedness” beyond traditional boundaries 
  • Read more about how there’s no fear and loathing in accounting
  • Read more about the pressure on accountants to deliver more value and intelligence to their clients
  • Read more about Data Warriors: accounting in the cloud
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Success in the Finance Department: Better Data and Analysis

Success in the Finance Department: Better Data and Analysis

CFOs and corporate controllers are beginning to recognize the increased value they can deliver to the organization when they take a more holistic and comprehensive approach to data reporting and analysis.  The key is in delegation of duties, and establishing the controls and connections which ensure proper (and complete) flow of information throughout the enterprise.  The finance department can easily become overburdened if not structured properly, but can be as easily undervalued if the sole focus is getting the numbers right.

An article on CFO.com discusses some of the elements of structuring the finance department for greater success, and identifies the value of taking a proactive, consultative and analytical approach to business finance.

“For a CFO, “success is not just about getting the numbers right, but also uncovering the story behind the numbers: taking raw accounting information and creating cogent and compelling management discussion and analysis,” says Eileen Kamerick, managing director and CFO at investment bank Houlihan Lokey.

Those who take the big picture into account are more likely to develop an organizational structure that isn’t merely reactive. That will allow staff to come up with more ideas and, ultimately, help drive revenue and run the business. “You have to create an organization so you aren’t in the engine all the time,” Kamerick notes.”


This is a great article… read the entire post on CFO.com here

You’ll find that it makes sense.

J

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The Cloud Makes Time Travel Possible: Hosted applications can deliver immediate business benefits

The Cloud Makes Time Travel Possible: Hosted applications can deliver immediate business benefits

In an article published on CIO.com, author Kevin Fogarty describes how moving to a cloud IT approach proved to be a highly beneficial and strategic decision for an on-site diesel fuel distributor.  The focus of the article was on how existing software and processes were enabled by centralizing them in a cloud hosting environment, and not by replacing them with new subscription-based applications.

For many businesses, this is the secret that nobody’s talking about: you can have the benefits of “the cloud” without having to radically change everything you have and everything you do.  Retention of knowledge assets is critical to business continuity, and moving existing systems and process to platforms where they can be leveraged to greater business advantage is a way to do that.  With centralization of systems and services, information can be processed far more efficiently than before, eliminating delays and improving cash flows dramatically.  Time is money, and the cloud helps businesses spend less of both.

“A lot of the invoices have to go out every day by certain times, so third-party accounting companies can do their thing for the fleet owners.” The setup sounds like a classic for any overhyped business-process-automation system, but Daniel Abrams and other Diesel Direct managers weren’t interested in managing their business using sophisticated business systems that require more motivation, money and technical staff than Abrams was willing to use or pay for.”

The initial benefit is being able to use the products already in place, just from a more secure and redundant location, but when you begin to consider the positive ramifications of reducing the time between delivery and invoicing, billing and payment receipt, or customer demand and product supply, you rapidly realize that the cloud means much more to the business than just another way to run software.

“Those changes save Diesel Direct both money and time. Rather than running reports and invoices all night Tuesdays, for example, the additional capacity lets the company run those resource-intensive processes during the day rather than overnight. That gets critical work done faster and more accurately than a process left to complete itself unattended.”

In short, the cloud makes time travel possible, because the result is available almost immediately upon completion of the task.  It’s kind of like getting your expense check as you walk off the plane in your home town, because you reported all your expenses in real time as they were incurred (snap a picture of the receipt at the bar, and like that).

Yet most business owners and IT managers for small and mid-sized businesses are being told that the cloud is best applied when innovation is required, and should be reserved for NEW things, and not thought of as a way to improve the status quo with existing or legacy architecture.

“It’s not unusual for mid-sized companies to come to depend on cloud services, according to James Staten, vice president and principal analyst for Forrester’s Infrastructure and Operations practice.

It is unusual for them to be more concerned with infrastructure than with applications, he says.”

With affordable and secure application hosting services being widely available for small and medium businesses, owners and managers no longer have to look to new solutions just to enable mobility, remote access, and a fundamentally stronger and better-managed system.  Legacy applications can be hosted and delivered, extending their useful life as well as the value of the development and intellectual property, and giving customers capabilities not readily available with local implementations.

“Diesel Direct can’t accomplish anything if its minimal IT infrastructure is offline for any length of time.

Abrams, worried about storms taking out his business as well as the power, didn’t know what technical solution he wanted until Callow “described for him what an enterprise infrastructure looked like,” Callow says.

“They didn’t need one, didn’t want one, but they did want the security, the reliability of a redundant IT infrastructure,” he says. “The most effective way to get that at the lowest possible cost is the cloud.”

Among the greatest benefits of outsourcing application delivery to a cloud hosting provider are the increased monitoring and security, application of best practices, and high levels of system fault tolerance and recovery capabilities offered.  While business subscribers focus on features and functionality of the application, the real focus for hosting providers is the platform – and the management and security of it.  This behind the scenes work offers tremendous business benefit to subscribing customers, but is often not the focus when discussing overall benefits of a cloud computing approach in the context of Software-as-a-Service, which is where many smbs focus their investigations.  As an alternative, businesses who may seek to adopt hosted solutions for their existing applications and software frequently do so for reasons of security and redundancy, not recognizing that their business processes may likely experience significant improvement, as well.

“Enterprises might have the luxury of making strategic decisions about cloud or other technology,” Golden says. “In mid-sized companies things are very tactical. No cloud evangelist is going around the refueling industry saying ‘there are ways to solve this problem.’ “Companies make tactical decisions to solve their own problems and, five or 10 years later, we’ll all wake up and realize we’ve changed the way we do everything,” Golden says.”

Make Sense?

J

The company in the article could be just like yours.  You don’t have to adopt new software and systems to benefit from the cloud.  How could your business change, if you could remove the problems of time and distance?

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Lessons Learned (or Not): Development and the Cloud

Lessons Learned (or Not): Development and the Cloud

Talk about agile technology and how great things are because we can experience rapid software solution development and deployment via the cloud is shining a brighter light on certain IT management issues which have existed for quite some time, but perhaps went largely unrecognized.  One of these issues is product development direction and influence, and where it really comes from.  If you think most IT companies determine their product lines and offerings from the top down, with detailed specifications supported by a strong business case, you may want to think again.  Based on my experience and that of a lot of other folks, there are many companies out there offering products and services  that were crafted in more of an ad hoc manner than through a focused “product development” effort with long term sustainability in mind.  In some cases, this demonstrates ingenuity and a desire to look at things in new ways.  Sometimes it’s just uncontrolled and unstructured chaos with dollar signs attached.

“there’s a school of thought, put forward by the small but influential analyst firm RedMonk, that developers now occupy the role of IT kingmakers. This theory holds that the traditional model of IT adoption, which assumes that major decisions emanate from the top, is wrong. Instead, the decisions that appear to come from a CIO are, in fact, dictated by the choices made by people way down in the IT organization-the traditionally denigrated developers. CIOs merely ratify the decisions made by “lowly” developers.”

It goes like this:  a high level concept comes from upper management… some “great idea”.  This high level idea is communicated (at a high level) to the production teams who will make it real.  The production teams decide what it really is, how it will really work, what it will look like, and how it will be offered – and all of this generally based on the preferences, skill sets, moral guidelines, belief systems, and work ethic of those involved in the development process.  The product details are run back up the food chain, where they then become the defining elements of the new solution.  In many cases, refinements and changes are argued against by the developers, citing various reasons or roadblocks to making changes to their prized construction.  But hey – they got it ready to go out the door, didn’t they?  So what if it’s not quite what you envisioned, and doesn’t necessarily represent a sustainable strategy?

Experience in business does count, particularly if you learn from it.  There is a saying I heard once, and I’m still not sure how I feel about it other than it proves to be so very true each and every day.  The saying is that “there is no morality without context”.  In business, context is often experience, understanding the cause and effect of an action or activity.  Without this learning, without the experience earned within the organization or by others, there is no context guiding the development.

“It’s irresistible to poke fun at some of the most egregious aspects of today’s IT practices-change control committees that only meet once every two weeks;ITIL implementations that place more emphasis on paper trails than actually, you know, getting things done; operations groups that resist application updates in the name of stability, and so on and so forth.

However, the fact is that these functions, if not their manifestation, exist for important reasons. Overlooking them-or outright ignoring them-is not the right solution. Ensuring that updates to production systems are made, and being able to track who makes changes to infrastructure, are enterprise functions are that won’t go away just because cloud computing is in the picture.”

Lessons previously learned will need to be learned again, and addressing problems after-the-fact is generally far more costly than being proactive and trying to avoid them in the first place.  It can be a very painful process, watching the company go through puberty all over again (particularly if it had once reached some level of maturity), yet this is what can occur when the bright and shiny new idea causes management to forget fundamental lessons previously learned.

In a recent article on Computerworld.com, author Bernard Golden makes a number of really good and interesting points about the opposing viewpoints of this “agile” development enabled by the cloud (the article focuses on AWS – Amazon Web Services, but it is completely relevant in the broader context).  Link here to access the entire post, it’s worth the read.

http://www.computerworld.com/s/article/9230040/How_the_Cloud_Brings_Developers_into_Business_Process

Make Sense?

J

Read more about legacy application modernization, and why IT and back-office outsourcing makes sense for a lot of reasons