Tax Extenders...The Gift that keeps giving

The lame duck session of Congress finally made a move on the tax issues looming for the rest of the year and going forward. Here is a quick video outlining some of the individual tax updates that will affect your taxes.



The Tech Accountant

How the States have turned to “The Grinch”

Thanks to the state and local taxation (S.A.L.T.) experts over at Peisner Johnson and Company, LLP here is a brief video of the 10 worst states to give charitable contributions in. For those that did not know, there are quite a few states that tax charitable contributions of inventory and non-inventory items. So for those small business owners that were thinking about giving away some of their inventory or non-inventory items to charity, think again.


http://portal.sliderocket.com/AHJKO/Charitable_Donations

The Tech Accountant

Small Biz Cloud Considerations

Small business owners (SBO’s) who use any kind of technology in their business will have undoubtedly heard someone mention “cloud computing” or “SaaS” (software as a service) and how this new technology will be the future of their business operations. Due to tighter small business budgets and a bit of misunderstanding of what the cloud has to offer, many small business owners continue with the “if it ain’t broke…” way of doing things. When speaking to small business owners about how they can streamline operations and save money, the topic of cloud computing seems to come up a great deal. I usually hear reasons for resisting the cloud to include security issues, control of data, and learning curve.


More importantly, if a small business owner is in the process of investigating a move to the clouds what steps should he take to ensure a smooth transition?

What I found out is that not every cloud accounting vendor has designed their product in the same manner. With security, disaster recovery, and data access being ranked the most important pain points for small business owners, I felt there was a need to get these questions answered first.


There are typically two approaches a cloud vendor will take when building their security infrastructure. Some cloud vendors address the security issue internally usually by building their own data centers with security measures built in and some cloud vendors outsource these functions to another vendor. Of the cloud accounting vendors that I spoke with, one did outsource their data center to an Amazon server farm. Their rationale was that Amazon’s security is top notch and they could focus their energy of developing the features of their cloud accounting product.

Cloud accounting products must also reassure small business owners that their data will be safe in the event of a disaster. A small business owner must ask in depth questions regarding the cloud vendor’s data center location, if there are additional data centers, and where those data centers are located to ensure that in the event of a disaster, the small businesses data will be protected and available.

Although having access to the data at all times is an important part of cloud computing, knowing who has access to your data is just as important. All the cloud computing vendors that I spoke to assured me that the only individuals that would have access to my data would be the individuals that I gave permission to. As with on premise software, a small business owner must have the proper controls in place to deter unauthorized access to certain areas of the software. The cloud vendors that I spoke to have integrated various levels of controls into their cloud offerings that include user name and password protection, password expiration dates, and permission access that limits what certain users can access.

As you can see, there are quite a few issues that need to be address before a small business owner takes a leap into the clouds. By speaking with cloud vendors, mapping out a plan, and test driving systems before going full speed with a cloud accounting solution, a small business owner can move their mission critical data to the clouds seamlessly.

The Tech Accountant

Form 1099's and You

Here is the topic that just won't go away....at least maybe not this year. Due to the lame duck Congress not reaching a compromise, the Form 1099 reporting requirements look like they will be a reality in the coming years.

Still confused about the new Form 1099 reporting requirements, feel free to watch this short video to fill you in on the details.



The Tech Accountant

Small Biz vs. Form 1099's

I was under the impression that I would have more details regarding the proposed repeal of the Form 1099 reporting requirements today, but did not know it would be bad news.


Yes folks the Senate failed to repeal the 1099 requirements that many small business owners were hoping they would finish before the year end.

This means in 2012 small businesses will have the burden of providing a 1099 for any purchases that total $600 or more. Additionally very little information had been provided regarding the increased 1099 reporting requirements for landlords (in another bill this year) that starts in 2011.

Get ready for increased workloads small businesses for the score right now is Form 1099 (1), Taxpayers (0).

The Tech Accountant

The New Smart Vault

Cloud vendor SmartVault has come out with some great new features in their update release that are sure to be on the holiday list for small biz owners. Be sure to view the video below to see the new features in action.



I will be testing the new feature this week (since this will be a slow week) and will be sure to post some feedback regarding them. I will say that I am glad to see the product expanding more into other markets and not just the QuickBooks market. Smart....very SmartVault.

The Tech Accountant

Cloud Accounting for Small Biz's

Just in time to get small business owners ready for the new year and tax season, cloud accounting vendor Outright has partnered with Google and Shoeboxed.com to offer small business owners an easier way to integrate back office admin functions with their accounting product. Be sure to watch the video below and see how using cloud products can save you money, increase productivity, and focus on growing your business.

 

The Outright product is mainly geared toward sole proprietors (Schedule C)....sorry for everyone else, but there are cloud options available for you too.

The Tech Accountant

Share your Biz Story...Win an iPad

Here's a cool contest for all the small biz owners and entrepreneurs out there. Be sure to watch the video and then post your own story.



The Tech Accountant

1099 Reporting for Rentals

Rental property owners will have a little more work to do next year thanks to a new law that requires them to file Form 1099-MISC forms for purchases over $600. Hear all the details below.



We will keep you posted on the updates since the IRS is supposed to provide additional guidance.

The Tech Accountant

You Deserve a Cool Credit

In these cooler weather months it's good to know that the IRS is offering us a cool credit that may warm our wallets and our homes. Check out all the details in this quick video.



The Tech Accountant

A Lame Duck still Quacks

All the votes have been tallied and all the precincts have reported…some people are happy with the outcome and some are not. Whether your Congress person won or not is not the issue at this point, the issue lies in what is going to happen in the lame duck session of Congress for the rest of the year and will you as a taxpayer be prepared. Here’s a quick rundown of what is on the table for taxpayers before the year ends:


• Bush Tax Cuts extended?

• Estate Tax?

• AMT?

• Health Care Reform?

I am not a betting man but would have to think that more than likely some taxes are going to go up. What taxpayers do before this year ends is important but you may need to call the psychic hotline or a crystal ball to assist you. When I looked into my crystal ball this is what I have come up with.


Be sure to speak to your tax professional (psychic) to ensure that all of your ducks are in a row for the upcoming tax season.

The Tech Accountant

Using Logic and Love in Your Small Business

While going thru my e-mails recently, I came across one of those chain e-mails that everyone sends…you know the one’s that always ends with send this to….and instead of simply deleting this one I figured what the heck let’s see what this one is all about.


Well the e-mail was initially sent to provide the reader with a new outlook on living their lives knowing when to use logic or love. It described in detail what logic and love were and how they are used in our interactions and relationships every day. Logic was described as being aggressive, argumentative, detailed oriented and sparking debate. Love was described as being compassionate, empathetic, building relationships and communion.

The descriptions got me to thinking “How can one use logic and love in their small business operations” since many of the terms used to describe logic and love are needed by entrepreneurs to run their own business. I came up with two major areas where an entrepreneur can use logic and love to effectively manage and grow their business.

Business Operations – Logic Rules the Day

Entrepreneurs need to use logic when they are focusing on business operations. Since logic sparks debate and is argumentative, those skills will come in handy say when dealing with bill disputes or improving daily operational procedures that may need reviewing. Logic is also detailed oriented and attention to detail is always great for productivity and efficiency. Logic will also assist an entrepreneur with ethical issues since when one is using logic there is typically no grey area.

Start-Up/Marketing – Love What you Do

Entrepreneurs must initially use love when they start their business. One of the most important aspects of starting a business is finding something you love to do and offer that product or service to the public. I love to help people save money, time and grow their business that’s why I’m in accounting. An entrepreneur should find what they are passionate about before starting a business. The passion will then carry over in your dealings with clients/customers. Marketing is simply about building relationships, and being compassionate about your clients needs. By using love to build relationships, a small business owner has a better chance of growing their business.

These are just a few of the ways I see that an entrepreneur can use logic and love to assist them in growing their business and becoming great at what they do. Feel free to post your comments below.

The Tech Accountant

10 Signs Your Small Biz may be ready for the clouds

Cloud computing continues to make inroads into our everyday lives as indicated by many surveys taken recently. That got me wondering if small business owners were also embracing the cloud more for the coming year. There are still quite a few small businesses out there that feel the need to continue to use on premise software for their operations feeling that if it ain’t broke…well you know the rest. The importance of using the cloud finally came to a head when I was recently on an engagement and before I could start to work, I had to update the software. So I came up with a brief list of 10 signs that your small business is ready for the clouds:


1. You receive a CD to load the software

2. You have to go thru a registration/renewal process

3. A new version comes out every year

4. Software has to be updated

5. You have to call tech support for problems

6. You spend time being tech support researching your own problem

7. Support contract expires every 3-4 years

8. Corrupted data issues

9. Desktop has too many version icons

10. Your PC runs slower

Listen to me elaborate a bit more about the list here:



This is just a quick list of things I see when working with clients why the cloud would help them lower their costs, increase productivity and efficiency and let them focus on growing their businesses. If anyone can think of any more or even why a small business owner should stay with on premise software feel free to post a comment to the post.

The Tech Accountant

A Win for Small Businesses

Not too long ago our friends over at Microsoft released a very robust product called Microsoft Security Essentials, an antivirus product. The cool thing about this release is that the antivirus software is one of the highest rated products on the market and it is a free download. The only downside was that the End User License Agreement (EULA) only allowed for personal use (although I wonder how a sole proprietor with a single computer case would apply to the situation but that’s a whole other topic).


Well Microsoft has in a sense thrown small business owners a bone this month by amending their EULA to allow the software to be used by small businesses with 10 or fewer PC’s. This is a great way for a small business to save money by reducing their technology expenses, become more productive since the software is less of a resource hog on the computer, and protect their PC’s and whatever is on those PC’s.

Here is a video with the details:



When tested the software ran smoothly in the background and did not slow the computer down at any point (like when running scans or updates). There may be a chance that the software is not a good fit for your small business, so be sure to speak to a technology consultant to accurately assess your needs.

The Tech Accountant

Uncertain Tax Planning

The fall season typically brings about a change. Whether it is change in the temperatures, the changes in the leaves, or the change in the time (fall back) around this time of year everyone is experiencing a change. One thing that should not change during this time of year is a taxpayers’ ability to properly plan for the upcoming tax season. This year however, is one of the most difficult tax years to plan for due to the uncertainty in the Congress and our economy. The economy is currently filled with uncertainty making many small businesses hold on to their hard earned money and not hire more workers. Congress is adding their uncertainty to the pot by recently adjourning without addressing the expiring Bush tax cuts in addition to other important tax issues (AMT, estate tax, and more).


What is a taxpayer or small business owner to do in a situation of uncertainty? Listen to some of the ideas we have come up with for our clients here.



The Tech Accountant

A look back at the tax season

Now that the tax extension deadline is one day into the rear view mirror, many taxpayers (and us tax professionals too) would like to take a break away from taxes. This gives me the opportunity to sit back and reflect on some of the more memorable comments I heard during the year regarding taxes and filing. There were quite a few areas of tax law where some taxpayers I spoke with were unclear as to the rules but some of the major ones had to do with extensions with balances due, and failing to file a tax return.




Tax Extensions

When a taxpayer does not have all the information to accurately complete their return by the deadline, the IRS will allow for an extension of time to prepare the tax return. To request an extension, taxpayers must file Form 4868 (individuals) or Form 7004 (businesses) on or before the due date of the return. Typically this is where the misunderstanding starts. An extension of time to file your return does not include an extension of time to pay your tax liability. Taxpayers filing extensions should estimate to the best of their knowledge their tax liability and send a payment when filing their extension.



Failure to File

When a taxpayer does not file a tax return by the due date (including extensions) a failure to file penalty may be incurred. This rule has been in existence for quite some time, however many taxpayers are unaware of the penalty. This may also be a good time to notify taxpayers that the failure to file penalty has been increased for income tax returns filed more than 60 days after the due date (including extensions). Returns filed after 2008 qualify for the increased failure to file penalty in which the minimum penalty will be $135 or 100% of the tax not paid.

These are just two of the more frequent misconceptions that I personally heard about during the year, but there are more. With all the recent changes in tax law, there are sure to be more “grey” areas where many taxpayers may fall thru the cracks. One the reasons I always say taxes are a year round strategy that can be proactively done with your tax professional instead of reactively at year end.

The Tech Accountant

Statements too broad for the IRS

Recently when speaking to a few of the attendees of our small business workshops the topic of business expenses came up and one of the attendees was under the impression that all a business owner needed to validate an expense was their bank or credit card statement. Unfortunately it gonna take a little more than that for it to fly with the IRS.

The IRS defines a business expense as a cost that is ordinary and necessary to carry on the trade or business. Expenses are typically deductable if the business is out to make a profit (i.e. not a hobby). If a small business owner is audited, and a review of the business expenses is warranted, it is important for a small business owner to have more than just their bank or credit card statements to substantiate their purchases. The IRS is looking for proof that the purchase was for a business purpose and most statements only provide the date, amount, and the vendor, not what was purchased. A prime example of the IRS not allowing statements as evidence of business purposes can be uncovered in KEITH J. FESSEY, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent a quick Tax Court case that I recently came across (I like to read stuff like this).

In summary Mr. Fessey was not allowed a large portion of his business expenses due to his poor recordkeeping. So what is a small business owner to do?

Small business owners need to keep the receipts and attached them to each statement so that they are easily recognizable and locatable. There are times however that the receipt can fade and the ink is no longer readable. In these cases, a small business owner can use technology as a backup. By scanning the receipt (and the bank/credit card statements) into a file and either store the file within their accounting software, their hard drive or the clouds. There are a great deal of scanning vendors out there for small businesses to use so be sure to Google “receipt scanners” to locate one for your small business.

By retaining your receipts and having a backup, a small business owner can ensure that their bank and credit card statements are not too broad for the IRS.

For more information on business expenses be sure to speak to your tax professional or read IRS Publication 535.

The Tech Accountant

1099 Reporting...What's New???

Recently while speaking with a construction client, the topic of 1099’s came up and my client asked me if he was going to have to give a 1099 to every vendor that he does business with (he has a lot of vendors) and when would this start. As I gave him the details (i.e. requires businesses to file information returns if they pay more than $600 to a single vendor, won’t have to start until 2012) I could tell he did not want to deal with the burden of filing all those 1099’s. Well it seems Congress doesn’t want to deal with the burden of repealing the new 1099 reporting rules either.


The new 1099 reporting requirements will raise about $19 billion as part of the Patient Protection and Affordable Care Act. The burdens that the requirements put on the small business owner are sure to increase their administrative duties/costs considerably. There have been a couple of ideas being kicked around in Congress lately. One was to increase the amount required to file reports from $600 to $5000 and another was to exempt businesses with 25 or fewer employees. Obviously neither idea was passed.

So where do we stand now? Congressional leaders say that they have heard the cry from the masses and will repeal the law sometime before the first of the year (hopefully). I guess this will have to be as separate legislation since it was not attached to recent small business legislation signed into law. We will be sure to keep you posted on any changes in the 1099 reporting requirements as they are made.

The Tech Accountant

IRS Introduces Widgets to Inform Taxpayers

The IRS continues to embrace technology and is quickly moving into the realm of social media with their new widgets. The widgets can be placed on websites, and social media sites to inform taxpayers about new developments with the IRS and tax breaks. Topics for the widgets include EITC (Earned Income Tax Credit), IRS Retirement Plans; HIRE Act tax breaks, due diligence, and non-profits. Be sure to keep a lookout for the new widgets on your tax professional’s website and social media pages. Examples are below:

The Tech Accountant

Fishing with the EFTPS

Back in July, I posted about a new e-mail scam that had been circulating to get taxpayers personal data. Well, the crooks seem to be at it again according to the IRS, and this time the “fish hook” is the EFTPS (Electronic Federal Tax Payment System). Now before everyone jumps to conclusions and says “See another reason to not use technology”, let me outline the details of the scam.


The scam claims to be from the IRS and states that it comes from the Anti-Fraud Commission (and many of the words are misspelled). The e-mail goes on to say that someone has used the taxpayer’s credit card information to pay a tax liability. The e-mail continues and says that taxpayer’s bank accounts have been used for fraud and money has been lost. To help recover the funds, taxpayers must click on a link within the e-mail to start the recovery process.

How to spot scam IRS e-mails

1. Misspelled words

2. E-mail does not end with IRS.gov

3. Link does not end with IRS.gov

4. IRS does not send e-mails to taxpayers

Hope the following tips will keep taxpayers safe when surfing the internet and checking their e-mails

The Tech Accountant

Don’t lose this late summer tax saving opportunity

With the end of the summer near (or for most already here), brings about time for back to school for many students. Taxpayers that have students in college will be relieved to know that there is still time to capitalize on a tax credit opportunity for college expenses paid. The American Opportunity Tax Credit is still available until December 31st 2010 and will help students and their parents offset the cost of college. According to the IRS there are six (6) important factors taxpayers need to know to claim the credit:


1. This credit, which expands and renames the existing Hope Credit, can be claimed for qualified tuition and related expenses that you pay for higher education in 2009 and 2010. Qualified tuition and related expenses include tuition, related fees, books and other required course materials.

2. The credit is equal to 100 percent of the first $2,000 spent per student each year and 25 percent of the next $2,000. Therefore, the full $2,500 credit may be available to a taxpayer who pays $4,000 or more in qualifying expenses for an eligible student.

3. The full credit is generally available to eligible taxpayers who make less than $80,000 or $160,000 for married couples filing a joint return. The credit is gradually reduced, however, for taxpayers with incomes above these levels.

4. Forty percent of the credit is refundable, so even those who owe no tax can get up to $1,000 of the credit for each eligible student as cash back.

5. The credit can be claimed for qualified expenses paid for any of the first four years of post-secondary education.

6. You cannot claim the tuition and fees tax deduction in the same year that you claim the American Opportunity Tax Credit or the Lifetime Learning Credit. You must choose to either take the credit or the deduction and should consider which is more beneficial for you.

For additional details on how you can claim the credit, be sure to visit the IRS website or speak to your tax professional.

The Tech Accountant

Rain Clouds on Peachtree? Here’s you Umbrella

Yesterday I received an e-mail from Sage Accountants Network that Sage Peachtree’s cloud based solutions will be discontinued on November 30th of this year. With the discontinuation of the Sage Peachtree cloud products (ePeachtree, Peachtree Web Accounting, Sage Peachtree WebsiteTrader and WebsiteCreator Services) is there a “next step” for clients that are using these products before the November 30th deadline? I have been getting calls/emails with questions and concerns about:


• Having access to their data after Nov. 30th

• Will Sage offer any other cloud products to move data over to

• How this affects the use of desktop Sage Peachtree products

Here is what we know so far regarding alternatives to Sage Peachtree Cloud products:

• ePeachtree – extract data by November 30th and Sage will offer customers a free desktop version of Sage Peachtree Complete Accounting and Sage Peachtree Simple Payroll

• Peachtree Web Accounting – Sage offers two alternate sources for web accounting. Sage Remote Access powered by GoToMyPC and Sage Peachtree Accounting 2011 using Terminal Services. To see which solution will work for your small business click here.

• Sage Peachtree WebsiteTrader and WebsiteCreator Services – Probably the toughest of the alternatives, clients will have to transfer their websites to another provider. The transfer can be completed via uploading the code to a new provider via FTP or exporting the website catalog item list to an XML or CSV file.

These are the solutions that are currently offered by Sage to somewhat minimize client’s pain with transferring their data to alternate sources. Clients must take the initiative and start planning for the transfer now to ensure that there is no interruption in their office procedures and administration and they can also test the transfers before the yearend reporting season. Be sure to seek assistance from a Sage Peachtree software consultant to correctly walk you through the transfer of your data.

The Tech Accountant

7 Steps to Paying Tax Liabilities

As the summer comes to a close, so does the 6 month extension to file tax returns. Extensions are used to extend the time to file your tax return but do not extend the time to pay any tax monies owed. If you are a taxpayer that has a tax liability that has not been paid, here are the seven steps to paying your tax liabilities:


1. Find out how much you owe in unpaid taxes. Either contact the IRS or get copies of your tax returns to verify the amount you owe. Tax liabilities not paid timely will include your original tax due, plus penalties and interest.

2. If setting up a payment plan, the IRS charges a user fee: $52 for direct debit installment agreements, $105 for new installment agreements without direct debit, or $45 for restructuring or for reinstating a defaulted installment agreement. Low income taxpayers can request a lower fee of $43.

3. Fill out Form 9465, Installment Agreement Request. Or use the Online Payment Agreement Application on the IRS Web site.

4. Choose a day of the month you want to make your payments. Your payment must be made by the same day each and every month. You can choose any day you want between the 1st and 28th of the month.

5. Choose your monthly payment amount. You must pay the same amount each and every month.

6. The IRS will respond to your request in about 30 days.

7. Make payments each and every month. You can pay by check, money order, credit card, EFTPS or automatic withdrawals from your checking account.

Taxpayers can increase the amount of their monthly payment if they like, but should at least make the same minimum payment each month. Taxpayers can always seek the assistance of a competent tax professional if they need assistance creating a budget for their tax liability or they do not have the time to complete the steps.

The Tech Accountant

Bankruptcy and Your Taxes

Bankruptcy filings are at an all time high according to statistics released by the Administrative Office of the U. S. Courts, the highest number since the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Taxpayers that file bankruptcy need to know the rules regarding bankruptcy protection and how tax debts can come into play. Before a taxpayer attempts to include federal tax debts under their bankruptcy protection they must determine what tax liabilities might be dischargeable.

Find out which tax liabilities are dischargeable here:



Taxpayers also must attempt to salvage their credit history by researching other options before including tax debts in bankruptcy filings. Tax administrative options can include a request for abatement of penalties, installment agreements, offers in compromise, and innocent spouse relief. If these options have been exhausted or are not viable for the taxpayer, including tax debts in bankruptcy may be the only solution.

Taxpayers can find assistance with bankruptcy and their tax situation by seeking the assistance of a good bankruptcy attorney and their accountant. Working in conjunction with the attorney and accountant, the taxpayer can determine which type of bankruptcy they need to file, what tax debts if any will qualify for discharge in bankruptcy, and how a bankruptcy filing will affect their tax situation in the future. Filing for bankruptcy is not the end of the world and for some taxpayers may be the only option to help them rebuild their lives.

The Tech Accountant

Form 1099 reporting - Need Your Input

Small business owners are in for a treat starting in 2012 if they do not voice their opinions. Under Section 9006 of the Healthcare Act all businesses, tax exempt organizations, and federal, state and local government entities will be required to issue Forms 1099 to vendors who they make purchases from totaling over $600 during the calendar year.

What?!?!

So if you are a small business owner, the new law is going to increase your paperwork burden for the end of the year and may possibly increase your accounting fees. Currently there is a bipartisan effort to have this portion of the law repealed, but nothing has changed as of yet.

I would recommend that small business owners take the time to leave comments with the IRS regarding this new law. At the following link:

IRS Requests Pubic Input on Expanded Information Reporting Requirement

To hear my personal input, listen below.

The Tech Accountant

Another Cool Cloud Offering

Small business owners (SBO’s) that are out in the field or away from the office a lot will love the new offering from online fax vendor MyFax. For those SBO’s that use iPhone smartphones (and there are quite a few according to this webinar), MyFax has released an iPhone app that allows users to open view or preview mission critical faxes while away from the office.


To hear more about the app from MyFax provider Protus and get more details, be sure to check out the following link.

Additionally I was pretty shocked at the number of Blackberry, iPhone, and Android users in the webinar. Appears Android and iPhone users are on the rise while Blackberry continues to loose market share. So I decided to take a poll and see what kind of numbers are out in the small business world.

Feel free to take the poll to the left and let me know which smart phone you use.

The Tech Accountant

The End of RAL's

In the past I have personally expressed my opinion of refund anticipation loans or RAL's for short. Well the IRS seems to be coming around to my thinking with their recent announcement. Starting with the upcoming filing season, the IRS will not provide tax preparers or financial institutions with the "debt indicator" that is used to determine the creditworthiness of taxpayers for RAL's. For more information on this change be sure to see the details at the IRS website.

Is this the end of RAL's? Let me know your thoughts.

The Tech Accountant

3 Ways to Take Small Business Accounting to the Clouds

Small business owners (SBO’s) who use any kind of technology in their business will have undoubtedly heard someone mention “cloud computing” or “SaaS” and how this new technology will be the future of their business operations. Due to tighter budgets and a bit of misunderstanding of what the cloud has to offer, many small business owners continue with the “if it ain’t broke…” way of doing things. When speaking to small business owners about how they can streamline operations and save money, the topic of cloud computing seems to come up a great deal. I usually hear reasons for resisting the cloud to include security issues, control of data, and learning curve.


If a small business owner is not ready to fully jump out the airplane and into the clouds, they have three basic ways they can move to the clouds. These solutions also address some of the many issues that small business owners have about the cloud way of doing things.

Remote Access

Test your current accounting system using remote access. Remote access allows a SBO to still control their data by having it located on one of their computers and gives bookkeeping personnel the ability to login to the system from anywhere there is an internet connection. The bookkeeper can access accounting information at their leisure and can cut down on in office expenses. Remote access works best when there is a dedicated computer for accounting and only one person is accessing the data. Some remote access vendors include LogMeIn and Citrix.

Software Hosting

Hosting your accounting data is an even closer step towards the cloud. When an SBO “hosts” their accounting software bookkeeping personnel will login to the hosting company’s servers and complete their tasks over the internet. The data will reside on the hosting company’s computers and updates will be done by the company. Hosting also allows simultaneous users allowing more than one person access to accounting functions. SBO’s must use due care when setting up permissions to various functions of the accounting software to ensure that proper controls are in place. Some hosting vendors include CPAASP and Right Networks.

SaaS Solution

When an SBO uses a SaaS accounting product, all of their mission critical data is in the clouds. Bookkeeping personnel will login to the accounting system just like accessing an online banking module. Changes are updated in real-time and updates are usually done during non-peak hours. Simultaneous users can also access the system at once and the control functions are integrated into the module. Since the data is completely online, there is no data file to share or provide to outside parties. Some SaaS vendors include Netsuite and AccountantsWorld.

As a SBO, taking your accounting processes to the cloud can be done in many ways. Depending on the SBO’s resistance, one solution is sure to fit your business operations. Embracing the cloud can be tough for many SBO’s thus it is important to speak with cloud vendors, map out a plan, and test the systems before going full speed with a cloud accounting solution.

The Tech Accountant

Tax Tools for Tech Savvy Accountants

Are you an accountant that ever needed access to tax code while at a client's office for research? Have you ever been in the middle of a tax audit and needed access to the tax code and regulations to support your position? Here's a quick video that will provide tech accountants and tech savvy taxpayers with a solution.



The Tech Accountant

Another Phishing Expedition

Taxpayers need to be on the lookout for another slick e-mail scam. This one is centered on using the IRS (Internal Revenue Service) as a scare tactic to get a taxpayer’s personal information. The e-mail scam has a few variations but typically looks like this:


From: Internal Revenue Service

Date: July 19, 2010 7:48:08 AM EDT

To:

Subject: W-2 form update

We would like to inform you that as of the 16th of June

you are late in updating your W-2 form submition with the new

updated version. Please send us your completed W-2 update form

by 01/07/2010. The updated version of the W-2 form is attached

to this message.



Internal Revenue Service



If you notice the word “submission” is spelled wrong. Misspellings are usually a good sign that an e-mail is a scam. The dates are another dead give away. The most important thing to know is that the IRS does NOT send out e-mail notification in this manner. If you receive an e-mail similar to this one, be sure to send it to the IRS.



The Tech Accountant

Time to start your business engines

Aspiring entrepreneurs that have been thinking about starting their own business are in luck if a current House Bill is passed. The Small Business Jobs Tax Relief Act of 2010 (H.R. 5486) would increase the Code Sec. 195 deduction for qualified start-up expenses. The current law allows small business taxpayers to deduct up to $5,000 in qualified start-up expenses with the deduction being reduced by the amount of total start-up costs exceeding $50,000. For tax years beginning in 2010 and 2011, the proposed House bill would increase the start-up expense deduction from $5,000 to $20,000 and the threshold will be increased from $50,000 to $75,000.


The bill is an attempt to spur the economy by allowing small businesses to recover more of their initial start-up investment on the front-end (instead of spreading the expense over many years) increasing their cash flow, and giving them the ability to invest in the economy and hire employees.

We will keep our eyes and ears focused on the developments coming out of Congress for more information on planning to start a small business, be sure to speak with an accountant, attorney, and do your own research at the Small Business Administration and other small business resources.

The Tech Accountant

Homebuyer Assistance

Individuals that entered into contracts to purchase homes but missed the June 30th deadline got a little assistance before the 4th of July holiday. The President signed the Homebuyer Assistance and Improvement Act of 2010. For more information regarding the Act, listen to the audio clip below.



The Tech Accountant

Five Trends Killing Horizontal Accounting Software

Blogger Austin Merrit of Accounting Software Advice had a recent post that discussed the 5 trends that are killing horizontal accounting software . Merrit states the 5 trends are:
1. Decision makers require more than a standalone system

2. Businesses want systems that fit their unique needs

3. SaaS emergence

4. Mobile Access and Social Media Integration with the enterprise

5. Software vendors fueling the switch

I would agree with Merrit that horizontal accounting software is quickly becoming obsolete and feel that the continued development of vertical software “flavors” are the driving force behind the switch. Software designed for small business (those that gross between $1 million to $5 million in revenue annually) currently on the market can be considered “vertical” once additional modules or “add-ons” are integrated with the existing software. If you take the major accounting software vendors (Intuit, Sage, Microsoft) each has what they consider a “middle” market product that can integrate customer management, financial management, operations management and employee/HR management. These systems are also currently providing advanced reporting, deeper sales and inventory management, customizable dashboards, collaborative workflow management and online training that further push their existing software into the vertical market.

The path to vertical accounting solutions for existing software vendors can be traveled down to major routes. One is to allow 3rd party vendors to develop add-on vertical products to use in conjunction with an existing horizontal software package. An example would be Intuit’s Marketplace and Worplace App Center. The Marketplace allows small business owners with horizontal accounting software the ability to add industry specific solutions that can be implemented via the desktop or the web. The Workplace App Center provides small businesses with software programs that can be loaded on the computer or smart phone to help save time.

The second route is to create an industry specific accounting software product that integrates other small businesses back office functions. Sage currently offers vertical software designed for the construction, real estate, and non-profit sectors. These software titles give small businesses the ability to focus on industry specific business management issues, operate their business in real time, and have all their back office functions in one package.

Small businesses using existing accounting software and third part add-ons are also pushing the industry to provide more vertical solutions to their business specific issues. The question is however; are these small businesses utilizing their existing software to its full potential. I personally have rarely seen a small business outgrown one of the higher level horizontal accounting solutions (QuickBooks Enterprise, Sage Quantum, and Microsoft Dynamics GP) when they are using all of the software’s features/modules/add-ons. A major problem is that many small businesses don’t take the time to learn how to use all the features in their accounting software. The key is that small business decision makers must prioritize their needs when considering an accounting software package. By focusing on the software’s features, implementation, technology, the vendor’s reputation in their vertical market and the small business’ budget a small business can turn their horizontal accounting software into a vertical accounting powerhouse.

The Tech Accountant

DSL- "Do Suppliers Lie"

Many entrepreneurs operate their businesses from home or use a home office to conduct part of their business activities. Having a secure and fast Internet connection in your home office is critical to the success of your business, but there may be times when you are not getting what you pay for. Are DSL suppliers lying to us about the speed of the service we receive? I found this out the hard way and the brief video outlines my problems.



The Tech Accountant

QuickBooks Helping IRS Audit Your Books?

The IRS and Intuit are joining forces to make it easier to audit your small businesses. This information was provided from a recent liaison meeting. Does this allow auditors the ability to review QB data that is NOT within the audit scope allowing the audit to be expanded? Let me know your thoughts.



ISSUE:

I was informed yesterday by a Revenue Agent that a national directive has been issued to all Revenue Agents to obtain a copy of the QuickBooks file for any taxpayer being audited who uses QuickBooks. Apparently each audit group has one license from Intuit.

What I plan to do is to use the utility feature to condense prior years so that no detail can be accessed. My audit is for 2008, but obviously other periods can be opened if they want. Hopefully this is not their intention....I have asked for a copy of the directive.

My main concern is the cost of audit representation for our clients if the IRS goes crazy with this. I would love to get your thoughts on this.


RESPONSE:

There have been some substantial changes in the last six to twelve months regarding the issues raised. The IRS has purchased 1500 to 2000 licenses from Intuit and will have one agent trained and licensed per group to assist others in the examination of taxpayers who use QuickBooks. Agents are instructed to obtain a copy of the taxpayer's data base for the year under examination only when it is necessary. This examination tool will not be used in all cases - it is the judgment of the examiner.

IRS has found that many taxpayers do not save hard copies of their records or the copies they have are incomplete. The Service also found that taxpayers reuse an old version and over write the prior year. The examiner may request the data base to verify the integrity of the internal controls. A definite problem could arise where a client thinks they have turned off the internal audit feature to avoid  tracking of adjusting entries but the program does not totally delete these items.

If the qualified representative (power of attorney) considers the Revenue Agent's request for the data base as totally unnecessary, he/she should speak to the agent's group manager. If the taxpayer/representative refuses to provide the data base and the revenue agent/manager determines it necessary, a Summons to obtain the information would be issued.

I spoke with our SB/SE national Technical Advisor for electronic records in our Exam Special Processes unit regarding the issue stated below. The Revenue Agent referenced in the question may have been referring to a memo issued by Monica Baker, the Examination Director, in late April announcing the implementation of the QuickBooks software availability to Revenue Agents. However, there is no written directive that has been issued instructing Revenue Agents to request the electronic data file in every instance where the taxpayer uses QuickBooks or other electronic records.

While Rev Proc 98-25 provides the authority for the IRS to request electronic records, in most cases (with exceptions), the Service will generally request the data file if some sort of electronic system was used. It is indeed up to the agent's and manager's judgment at the group level to make the request.

Although the data file generally retains information from the date of initial input to the date of backup which could obviously include multiple years in addition to the actual audit year, agents are instructed to look at the information only for the year under exam. If there is a decision to expand the examination to prior/subsequent years, then information for those years could be reviewed. As mentioned, using the cleanup utility condenses prior year information into a summary, rather than a detailed, format.

As the software finds its way into RA groups and more agents are trained in its use, we could definitely be seeing a trend in the way exams are conducted since so many small businesses use QuickBooks.


Gerry Kelly-Brenner
ID #94-06950
Senior Stakeholder Liaison Specialist
SBSE Communications, Liaison & Disclosure

Internal Revenue Service
1301 Clay Street, Suite 1090S
Oakland, CA 94612

The Tech Accountant

Just Checking

I came across a pretty interesting article today regarding making payments with checks versus using a new technology called "Peer-to-Peer" payments. Feel free to check out the article here.

Then take our poll (on the left) and let me know your thoughts.

The Tech Accountant

Using your “INTUITion”

Well one of the worst weeks for Intuit the makers of QuickBooks software is behind them (not without another “outage” on Saturday)and although I did get a chance to read all the comments from various media and social media outlets I will not provide an opinion regarding what happen. I will only provide questions/comments on how Intuit can possibly use their Intuition in the future to create better transparency and show that they actually care about their customers.


According to Brad Smith, CEO of Intuit in a statement from their website:

“I want to share with you what we know at this time about what happened. The disruption occurred during a routine maintenance procedure. An accidental but severe power failure during that procedure affected our primary and backup systems, taking a number of Intuit’s websites and services offline.”

Question Mr. Smith, would your intuition tell you not to setup redundant servers in the same location as your primary server? This is still the main question that is on everyone’s mind.

Some also feel that Intuit did not handle the outage in a manner befitting a large corporation. Specifically many individuals felt that they were left to find out information on their own since calls and e-mails to Intuit only provided canned statements that they were “working on” the problem. Personally from what I saw on social media, there was more “support” there than via taking the corporate route. Again intuition would tell one to handle P/R in a more efficient manner.

Well those are some of the issues that Intuit has to deal with at the present time. All in all their products work for most small businesses owners but as for recommending their cloud based offerings at the present time would require more research. Bottom line….cloud computing is here to stay. Small business owners interested in moving to the clouds should do their due diligence before selecting a cloud vendor.

Be sure to voice your opinion or check out the comments on Intuit’s website.

The Tech Accountant

Intuit and Sage not ready for SaaS?

I was initially going to post a video today about ways to use Sage’s Peachtree small business accounting software for your small business, but their rival Intuit and their problems will put that post to the back burner for awhile. Now back to Intuit’s problems. Today I received an e-mail from Intuit that stated the following:


“I wanted to make you aware that there is currently a large outage in the San Diego Data Center and as a result many of our sites such as Intuit.com, Quickbooks.com, Intuitwebsites.com, Payroll.com, Payments, TurboTax, etc. are down. Intuit is actively working the problem. I'll send out an update when I hear about a resolution.”

The outage is surely affecting millions of small business owners (since QB has the largest share of the small biz market) who can’t have their businesses grind to a halt. The question is when will Intuit have the problem resolved and is this something we can expect from Intuit in the future?

Earlier in the month Sage (the makers of Peachtree) also had an outage of their online systems that affected their e-mail, order entry system and customer relationship management (CRM) software. The outage lasted 22hrs and according to the e-mail that I received they isolated the issue and are working to fix the problem. You can find more information here.

With a vast majority of small business vendors taking their products/services to the clouds (online) via software as a service (SaaS) will these “outages” make small businesses push away from using cloud based solutions?

Feel free to let us know if you are losing time and money due to the Intuit's or Sage's outages.

The Tech Accountant

S-Corp’s…a change may be a coming

Those professional small business owners that have organized their businesses as S-Corporations may want to take a look at the American Jobs and Closing Tax Loopholes Act of 2010. Contained within that bill is a little provision that will have a big consequence for professional corporations that are organized as S-Corps. Professional corporations consist of doctors, lawyers, architects, engineers and the like and if the new law is passed, the profits for these small business professional corporations will be taxed (currently proposed to be 15%).


Why Professional S-Corps should care?

Currently S-Corps owner/shareholders can minimize their tax liability by taking part of their earnings from “reasonable compensation” and the rest from distributions from profits. Reasonable compensation is taxed thru payroll and distributions are not subject to payroll taxes. With the passage of this bill, distributions will now be taxed. There are tests that must be tried to see if your S-Corp will be deemed a disqualified S-Corp so be sure to speak with your tax advisor to see if your S-Corp is considered disqualified.

What’s a Professional S-Corp to do?

Now is the time to contact your senator and tell them your thoughts about the proposed changes for professional S-Corps. If the bill is finally passed, there may be a chance that some professional S-Corps will close down in the coming years.

The Tech Accountant

Save the Paper...IRS does not want it

The IRS does not want your paper anymore. Attached is an audio file below that outlines how the IRS is moving toward a paperless processing environment. By embracing less paper the IRS can save millions. If it save them millions just think how much it can save you and your small business. Enjoy.



The Tech Accountant

Mixing Business with Pleasure

Most of the time accountants are advising their clients to be careful when mixing business expenses with personal expenses. Whether it is comingling business and personal funds or paying for personal expenses with business funds mixing of business and personal is a sure fire way to get a visit from your friendly IRS auditor.

When may you ask is it ok to mix business and personal? Typically it is ok to mix the two when the expense has a valid business purpose. Take for example summer travel. If your travel is necessary to the operation of your business entity and the destination is a typical vacation spot, you will technically be mixing business with pleasure (so that’s way most my accounting conferences are in Vegas).

Below is a brief audio on mixing travel business trips with pleasure. Enjoy.

The Tech Accountant

The IRS is Open this Saturday

For many taxpayers that are having problems with the IRS, speaking with them is one of the last things they want to do. However this may be the best course of action to resolve one’s tax problems. If you fall into one of the following categories, the IRS will be available to help you this weekend. If you:

• received a notice seeking additional information
• cannot pay a tax balance due
• need assistance with offers-in-compromise
• are struggling to complete a certain IRS form or schedule

Be sure to stop by the IRS website to locate which tax office in your state will be open this coming Saturday to assist you.

The Tech Accountant

Tired of Your Business Running You? Turn the Tables with Technology

Increase productivity, save money and improve your social media reach/marketing in your small business with this week’s tech tools video. If you are tired of having your business run you when you should be running your business watch now and change how you run your business.





The Tech Accountant

Protecting Your Business

According to a recent report by the Association of Certified Fraud Examiners (ACFE) occupational fraud continues to be on the rise in the US and countries abroad. The 2010 Report to the Nations on Occupational Fraud and Abuse provides a wealth of information on workplace crimes, how much they cost businesses and how they were detected. The charts and graphs outlined on this link revealed some surprising statistics:

• Financial statement fraud schemes made up only a small percentage of cases, they were the most costly
• Most fraud perpetrators were from the accounting department
• Anonymous tips were used the most to detect fraud as opposed to audits

So what is a company to do to prevent fraud? One of the most important things to do is to closely monitor your business and keep an eye on all aspects of operations. For small business owners it may be difficult to implement the more traditional control functions (such as separation of duties in the accounting department) but the use of technology can assist the small business owner with controlling fraud. Just recently JP Morgan Chase Bank has released a free fraud protection service for small business account holders that will:

• Control check payments and returns with Reverse Positive Pay
• Keep tabs on your account activity with Security Alerts
• Get Paperless Statements to keep your statements from being intercepted in the mail

Check with your bank to see if they offer similar protection services so that you can make you small business more secure.

The Tech Accountant

Who's Afraid of the Clouds

Looking for a way to save money and increase productivity in your small business? Don't be afraid of cloud computing or software as a service (SaaS) solutions. Many small business owners (SBO's) are reluctant to move their systems over to the clouds citing privacy and security issues as the major reasons. If this is the case maybe the SBO's should take baby steps toward the cloud instead of jumping in head first. Here is a funny little video that may tap into the feelings of many SBO's about the changing world of technology and where they will fit in it. Enjoy.

The Tech Accountant

Microsoft Office Web Apps…the new player

There has been a great deal of talk about the release of Microsoft’s Office 2010 product recently and I wanted to give everyone out there in blog land a brief overview of what the new software can do. One of the major additions to the software is the ability to view, share, and edit Office files (Word, Excel, PowerPoint, and OneNote) files from virtually anywhere via Office Web Apps. The changes in Office 2010 are an attempt by Microsoft to go after the Google Apps market as the battle between the two seems to be heating up.


If you are a small business owner and are in the market for new productivity software, be sure to also take a look at this PCMag.com article that puts Google Apps up against Microsoft Office Web Apps and make the decision for yourself. Would love to hear what others think on the subject.

The Tech Accountant

Spreadsheets or Cloud - Tax Planning Made Easy

 
The Tech Accountant

Digital Image Risks

If you have not heard or seen the reports on tv lately. There is a risk associated with using a digital fax, copier, scanner in your business. Basically the digital images are stored on the equipment's hard drive (yes copiers and the like have hard drives) and once the equipment is sold can be access by those wanting to steal confidential information. If you have not seen how this can be done or who is at risk be sure to watch the video below



The Tech Accountant

The Timothy Geithner Approach

Many tax preparation software out there comes with an accuracy related guarantee that goes something like if there are errors found on your return, the software provider will take full responsibility for resolving the problem. I guess to some that may give them a little reassurance that they can prepare their own taxes without the assistance of a competent professional. Well the IRS also has a saying and it goes a little something like this:

"Taxpayers have a definite responsibility to file an accurate tax return...."

So it is up to the taxpayer (not the software) to file an accurate return. If you think that is not the case here is what can happen if you attempt to blame your errors on the software.

The Tech Accountant

Source: Kiplinger

Business Development Workshops

Last evening I had the pleasure to sit-in (and contribute) to a business development workshop aimed at helping those interested in starting their own businesses get the tools they need to start off on the right track. The workshops are being put on by John C Riley of The E-mail Specialist/Atlanta Professional Business Network and Marc Parham of Partec Consulting Group, Inc. The 2-hour workshop last night was a first in a three part series that will take place every Wednesday at the East Point Library for the next few weeks. Last night’s workshop dealt with the legal aspects of starting a business, business plan development, and marketing your business. Next week we will dive deeper into the business planning aspect of start-up and help aspiring entrepreneurs write their business plans. Following are a few pictures from last night’s workshop and we would like to assist more individuals that want to start their own businesses. The next workshops are as follows:

Business Development Workshop Part II – Wednesday May 5th 2010 6-8pm

Business Development Workshop Part III – Wednesday May 12th 2010 6-8pm

For more information regarding these free workshops feel free to contact John, Marc, Michael, or myself via the website links listed in this post.

The Tech Accountant

Marc and John

John discusses marketing

Q&A session

Michael Hickman talks about library resources

You Have Choices in the Cafeteria

Thanks to the IRS and Notice 2010-38, small business owners (SBO’s) with cafeteria plans now have guidance on how to provide the recently passed tax free health coverage for employees with children. The employees’ children must be under the age of 27 and are eligible for the tax benefits from March 30th 2010. The term “child” can mean a son, daughter, stepchild, adopted child or eligible foster child. Those SBO’s that have cafeteria plans may allow their employees to immediately take pre-tax salary reductions to provide coverage to their employee’s children.

According to IRS Commissioner Doug Shulman the changes will “make it as easy as possible for employers to quickly implement this change and extend health coverage on a tax-favored basis to older children of their employees.”

The Tech Accountant

New HIRE Form

For those small business owners that will be adding employees in the future, there is a new proposed form that will need to be filled out to ensure that your new employees qualify for the HIRE Act's tax break.

To view the draft of the form click here.

The Tech Accountant

Tax Credit Window Pains

Use this video to gain insight into the energy efficient tax credit and how to use it to minimize your window pains.

Hire Ground for SBO’s

New bill signed into law for SBO’s looking to hire new employees.

The Hiring Incentives to Restore Employment Act (HIRE), also known as the "jobs bill," signed by the President on March 18, 2010, is a plan to create jobs by providing a temporary tax break to small businesses that hire the unemployed.

How is it planned to help SBO’s (2 Ways)

Payroll tax exemption– SBO’s that pay wages after March 18, 2010, and before January 1, 2011, to qualified individuals are exempt from the (i.e., the Social Security portion) of the FICA employment tax for those qualified unemployed workers they hire.

Watch Your 1st and 2nd Qtr. Payroll Tax Forms (Form 941)

For wages paid prior to April 1, 2010 (1st Qtr.), the exemption comes in the form of a second quarter credit. That is, wages paid prior to April 1 that would otherwise qualify for the exemption are subject to regular payroll tax rules. However, the amount by which an employer’s payroll tax would have been reduced under this provision will be treated as a payment against tax in the second quarter of 2010.

Business Tax Credit

Tax credit for retaining new hires– For tax years ending after March 18, 2010, a business tax credit equal to the lesser of $1,000 or 6.2% of wages paid to the worker during the 52 consecutive weeks of employment, and is allowed for each employee in the taxable year in which the 52 consecutive week period is first satisfied will be allowed for each qualified individual.

The Tech Accountant

Entrepreneur Insight Teleconference - Start Your Business Right

I recently had the pleasure to be a guest speaker on a local teleconference recognizing small businesses and entrepreneurs and how they got their start. The main point was to introduce the speakers "P.I.P.E. H.I.T." strategy to help aspiring entrepreneurs transition from the workforce to working on their own. Good information is packed in this 30 min teleconference. Enjoy.

Fire and the Clouds- A Client Story

As many of you out there in blog land know, I am a supporter of using technology to make life a bit easier for myself and my clients. One of the more common technology products that I currently use is a cloud (online) backup and data storage solution. We have been using it for quite some time now and since it has been integrated within my firm’s daily processes, we think nothing of it. At least until recently…

A client of mine had a house fire back in 2009 and is still in the process of putting their life back together. As I met with him and his wife recently, we were all trying to piece back their businesses and personal financial information only to find out that the majority of their statements and contracts were destroyed. Luckily this client was having us scan all of their important financial data since 2004. I was able to pull out my trusty smartphone and login to our data storage and pull up everything we needed to get their taxes completed and provide them copies to recreate their records.

As I was leaving, the client told me that from now on he wanted to have me scan every piece of paper her ever receives. That way he would have no worries.

Just another example of how cloud data storage can save you and your small business. Stop by our website for more information on how you can protect you and your business.

The Tech Accountant

3 Ways Accounting Systems Can Save Your Small Business

Small Businesses are the backbone of our economy. Being that small businesses play such an important role in the American economy, typically what affects the economy will affect the small business owner. In the wake of large businesses financial scandals that are changing the way the government and regulatory agencies mandate new regulations, one would think what are the consequences if small businesses fall prey to similar scandals. The small business owner must take these issues into consideration for accurate financial reporting is not only a “Wall Street” problem, but a “Main Street” problem.

When a small business owner tries to tackle the financial problem alone, they are usually too caught up in the activities of bringing in new business to take any time out to “look over the books” or balance the checkbook. It is also difficult for the small business owner to stay current on all the new changes in the tax law that may affect their business. Despite all the government talks of tax simplification Congress has made more than 5000 changes in the federal tax law since 1986. Small business owner must take into account these issues to ensure a solid future.

Typically a small business owner may attempt to alleviate the problem by purchasing an easy-to use software program to in a sense “do the work for them”. This usually only puts the small business owner back into the same loop of trying to bring in new business at the same time managing day-to-day activities. The time training on the software and entering the data alone could be spent on revenue producing activities which is why often time a small business needs to develop a system of financial record keeping.

How Accounting Systems Help

When a small business utilizes an accounting system in conjunction with an accounting software package, all financial issues can be addressed. This will ensure that the most prudent course of action is taken when making business decisions. At the same time the small business owner can focus their efforts on the revenue producing activities that will help the company grow. The three main ways an accounting system can help a small business owner are:

• Have more efficient tax planning- By preparing year round
• Improve cash flow- By knowing where the business stands at all times
• Have better insight as to where it is going- By utilizing accurate reports for decision-making.

Tax Planning

By utilizing an accounting system, a small business will be able to uncover potential tax savings they can apply throughout the year instead of only at tax time. An accounting system that closely monitors the potential tax implications of various transactions during the year will assist the small business owner with the timing of those transactions to reap the best tax benefit.

Cash Flow

Cash is the life-blood of any business especially a small business. Without cash the business will suffer and will possibly be forced to cease operations. By implementing an accounting system a small business’ cash flow position can be improved. The system can provide the small business owner with the numbers beyond just the bank balances so cash and/or financing needs can be addressed efficiently and effectively.

Management Controls

Many small businesses operate under a blindfold when it comes to planning for the future. By having an accounting system in place, the small business owner will have a better grasp on where they are and where they plan to go. By focusing on the business growth strategy, in conjunction with financial reports the accounting systems can “forecast” potential business scenarios before they occur. This will empower the business owner with the necessary information they need to stay in line with their strategic vision.

Accounting Systems are Important

By implementing an accounting system a small business can improve its tax planning, effectively manage their cash flow, and improve their management controls. It will also allow the small business owner to spend more time on revenue producing activities. Small business is a contact sport, it is important for the small business owner to make new contacts, cultivate their present contacts, and keep in contact with their bottom line. By using an accounting system, small businesses can effectively manage these contacts and continue to be the backbone of the economy.

The Tech Accountant

Start Your Business Right

As the economy continues to decline, many people are looking for other ways to make a living. Jobs are still hard to find for most and the opportunity to start your own business is becoming a viable option. For those that are interested in hanging out their own shingle, there are some very important steps one must take before starting their business to better of chances of success. As I was going through some of my group discussions on Linked In, I came across a lady named Silvia Johnson who operates a coaching and consulting firm in the San Francisco Bay area. She will be conducting a 60 minute teleconference on March 10th to help those people who would like to start their own business on the right track. Be sure to stop by her site for more details and to sign up for the teleconference. Hope those in blog land can make the call.

The Tech Accountant