- Todd William for Business to Community writes: I’ve heard that online marketing for accountants is very difficult and it is hard to get your message across in a marketplace where the cheapest provider of tax services often shouts the loudest. One way to showcase your business is to be aware of your online reputation and work to strengthen it. Reputation management will enable your business to achieve success beyond word-of-mouth marketing and help you win new business from a simple Google search. Below are some tips on how to manage your online reputation and find online marketing success.
- 1. Read online reviews. Not just of yourself, but of your competitors, too. Check out Yelp.com, AngiesList.com, and Citysearch.com to see what your customers are saying about you. Are the reviews positive? Great, you know you’re on the right track in providing excellent service to your clients. And if you see any negative reviews, use them as an opportunity to better yourself in a particular area. Reply to the negative reviews (some sites allow you to do this privately, which is always preferred, or you can do it publicly) and respond directly to the negative feedback. Work with the customer to get them to give you another chance to make it right. Even if you’re not given the chance, demonstrating your willingness to face the problem head-on will give you credibility in the online world.
- 2. Ask clients to give you an online review. To ensure that there are more positive reviews than negative, ask your clients to review your services online. But, don’t proactively offer this option to every single client; rather, ask those with whom you’ve developed a great rapport and who was really happy with your work. The positive reviews will attract new clients.
- 3. Network via LinkedIn, Twitter and Facebook. Start a Facebook page just for your business and use it to engage with your clients. Offer incentives to your clients, like early bird discounts during tax season, and deals if you’re retained for multiple projects. Social media management services are also available to help busy professionals. To prevent your clients from learning too much about your personal life, be sure to set your personal Facebook account settings to private.
- 4. Start an accounting blog. Use this as an opportunity to educate your audience and gain new clients. Corporate reputation management experts have been using blog marketing to help clients spread their message and build a loyal following. Offer troubleshooting tips, from how to file your taxes to taking advantage of deductions and credit available to the small business owner to how to set up your payroll system. Don’t give away all your secrets, but give enough information to make yourself stand out as a credible industry expert.
- 5. Hire an online reputation management firm. When in doubt, ask for expert help. A top-rated online reputation management firm can help you push positive mentions of you to the first page of a Google search, while burying any negative mentions.
- Todd William is a reputation management expert and the founder and CEO of Reputation Rhino LLC, a leading online reputation management company. Todd works with individual and business clients to promote, protect and defend their online reputation using the latest technology and an experienced team of public.
Monday, July 29, 2013
Christmas in July Tax Planning
Roger Russell for Accounting Today writes: Last week, one of the “girlie” cable channels had a weeklong Christmas-in-July event, where they showed Christmas movies the whole week. (In case you’re wondering, it’s my wife, not me, who watches this particular channel). But the thought occurred that if it’s time to start thinking about Christmas, then it’s also time to begin considering end-of-year tips and planning strategies to offer clients as we approach the beginning of fall.
“This year it’s more important than ever to plan ahead because of all the new tax law changes,” said John Vento, a New York-based CPA and CFP. “Of course, 99 percent of what you can do has to be done before the end of the year, so now is a good time for clients to take stock of their financial situation and take the necessary steps to minimize their tax liability.”
Vento, whose recently published book “Financial Independence—Getting to Point X” incorporates tax planning strategies for professional advisors, cites the 3.8 percent Medicare tax. “It’s important for clients to know whether or not it will apply to them, and, if possible, being able to maneuver your investments to minimize exposure to that tax.”
The Medicare tax will be imposed on unearned income over $250,000 for joint filers. This includes interest, dividends, royalties and rental income.
Vento advises clients to check with their HR department to fully understand the extent of benefits available to them. “For employees, the bulk of write-offs they can get is through their employer,” he observed. “If they can get tax-free benefits, they should try to maximize them. They should take advantage of their tuition reimbursement plan and fully fund their 401(k) plan. If they’re 50 or older, they should take advantage of the catch-up provision, which allows them to contribute an additional $1,000 to their IRA. They should also check out the provisions where benefits are paid out in pretax dollars, such as tax-free reimbursement of child care, and even transit passes.”
The energy efficiency credit, which was slated to expire at the end of last year, has been extended for one more year. While it may be renewed, there is no guarantee, so clients should be advised to make any necessary improvements that qualify for the credit this year.
Vento noted that if you find a job for your dependent children to help fund some of their living expenses, each child can earn up to $6,100 in 2013 without having to pay any federal income tax.
Some others among the hundreds of tips Vento offers:
• If you are not subject to the Alternative Minimum Tax, consider accelerating your personal tax deductions by paying any state or city estimated income tax payments that are due in January before December 31. Making these payments a few weeks early can reduce federal income tax liability by as much as 39.6 percent of this early payment.
• If your clients are planning a wedding, they may want to consider postponing it until January to avoid the marriage penalty faced by many married couples where both husband and wife are earning good amounts.
• Taxpayers should adjust their exemptions on Form W-4 so that they are not overpaying or underpaying the taxes withheld from their paycheck.
• Under the Affordable Care Act, there are limited opportunities to deduct medical costs. Starting in 2013, the deduction may be limited to only the amount that exceeds 10 percent (7.5 percent for taxpayers over 65 through 2016) of AGI. This is why having medical insurance through an employer and a Health Savings Account are important, because they allow the taxpayer to pay for these costs in pretax dollars.
• Insurance premium costs for long-term care policies may be partly or fully deductible depending on age and AGI limits.
• If taxpayer’s child has a part-time paying job, consider establishing a Roth IRA in the child’s name. The child can withdraw money from it to pay for college, and the withdrawal will be taxed at the child’s tax rate, which could be as low as zero if structured properly.
• If the taxpayer is starting a business as a corporation, take advantage of Section 1244 stock. If the business fails, up to $50,000 of the loss can be deducted against ordinary income if the taxpayer is filing as single, or up to $100,000 if filing jointly.
Rich Tales: Xero’s Rod Drury more than triples his fortune in a year, but can he keep it? / In just the past year, Xero founder and CEO Rod Drury has more than tripled his fortune from $NZ120 million ($104.7 million) to $NZ400 million ($349 million).
Myriam Robin for SmartCompany writes: At its May profit announcement, the subscription accounting software company revealed it had more than doubled its operating revenues to $NZ39 million a year, largely driven by its successful inroads into Australia.
The market lapped it up, notwithstanding the fact that the company posted a $NZ14.4 million loss.
Last Friday, the stock traded at $NZ17.89, a smidgeon below its record high. This means the company’s total market capitalisation was $NZ2.06 billion, a whopping 53 times its operating revenues. By comparison, Apple’s price-earnings ratio is currently sitting at around 11-12.
This has prompted plenty of questions as to whether Xero is really worth so much.
At the profit announcement, Drury alluded to these concerns.
"There's no doubt the company has delivered for many shareholders already and it's natural that some may think the business is mature and the value captured,"he said.
"However, we believe we're just at the beginning of a massive market shift as small businesses globally realise the benefits of connected cloud solutions."
That points to the underlying reason for Xero’s meteoric rise. Buying Xero shares is a bet on the cloud.
Cloud computing is revolutionising plenty of industries. And it makes particular sense in accounting.
Xero’s entirely-online accounting systems automate and feed in plenty of data which business owners would have previously had to update manually. For example, bank account details allow businesses to keep automatic track of the money going in and out and its impact on their bottom line.
The multi-million-dollar accounting software market is dominated in Australia by MYOB and Reckon. Neither of these has traditionally run cloud-based offerings. Now, they’re beginning to, but Drury often points out his rivals are hampered by their need to offer hybrid solutions to customers using their legacy products. MYOB has offered cloud-only accounting solutions since 2010, but Xero has been doing so since 2006.
Its big-name investors, who own most of the company, believe it can take on the titans. One of those investors is PayPal founder and tech visionary Peter Thiel. Another is MYOB founder Craig Winkler, whose 15.7% stake is in Xero is just shy of Drury’s.
For investors questioning whether Xero is a bubble stock, they can draw some comfort from the fact that at least Drury has plenty of skin in the game.
Tax strategy saves time-share industry tens of millions
Jason Garcia for the Olrando Sentinal writes: Marriott Vacations Worldwide Corp., the world's No. 2 time-share seller, recently discovered an easy way to cut its U.S. tax bill: Pay some of it later.
The Orlando-based company, whose brands include Marriott Vacation Club and The Ritz-Carlton Destination Club, will defer approximately $40 million in federal and state income taxes this year by taking advantage of laws allowing people and businesses to spread out tax payments that stem from sales financed over time. The company expects to defer another $10 million in payments annually for at least the next few years.
A number of other large time-share developers — including Wyndham Worldwide Corp., Hilton Worldwide Inc. and BFC Financial Corp., parent company of Bluegreen Vacations — say they use the same method to push back some of their tax payments. It has become an important way to free up cash for the industry, which carefully structures its sales to legally qualify for the favorable tax treatment.
Marriott Vacations' immediate tax savings — nearly triple the $16 million profit the company reported last year — are a window into the lucrative world of corporate-tax planning. Across the country, businesses of all types are using sophisticated strategies to defer and reduce their corporate-income tax bills, collectively saving hundreds of billions of dollars a year.
The result: Although the United States' 35 percent corporate-income tax rate is now the highest in the developed world, many companies actually pay far less. A new study by the watchdog arm of Congress found that large, profitable U.S. corporations paid income taxes in 2010 at an effective rate of 12.6 percent —about one-third the statutory rate.
Marriott's time-share business, which was spun off from hotel giant Marriott International Inc. in late 2011, hopes to find further tax savings in the future.
"As part of standing up our new tax process in connection with the spinoff, we are focused on opportunities to improve cash taxes, as well as reduce our overall effective tax rate," Marriott Vacations Chief Financial Officer John Geller said this month during a conference call to discuss the company's second-quarter earnings.
The average time share costs about $19,000, according to research by the American Resort Development Association, and units sold by premium brands such as Marriott typically cost even more. Many buyers chose to finance their purchases through the developer.
When that happens, the time-share company can choose to pay its income taxes on the profits stemming from those financed sales using what's known as the "installment method." Instead of the full amount of income tax in the year a sale occurs, the company pays it over time as the buyer pays back the principal on the loan.
The move has no bearing on a company's public profitability, as they can still immediately report the full profit to investors. The choice affects only the separate set of books the company maintains for tax purposes.
Financing underpins much of the time-share industry's sales. Marriott Vacations finances approximately 45 percent of its time-share sales, typically through 10-year loans that carry interest rates of about 13 percent.
While installment taxes are commonplace across the industry, few outsiders understood just how lucrative the practice was — until Marriott announced this month that it would start using the technique.
Primarily because of that shift, Marriott Vacations was able to more than double its projected free cash flow for 2013, from about $60 million to about $130 million. While Marriott will still have to pay the taxes eventually, deferring them frees up cash now for the company that could be used now in a variety of ways.
"Money's worth more today than it is tomorrow," said Jeff Hansen, Marriott Vacations' vice president for investor relations.
Robert Higginbotham, an analyst with the investment bank SunTrust Robinson Humphrey, said the move will help the company with its plan to return cash to shareholders, either through dividend payments or share repurchases — a move he said investors are eagerly awaiting.
"To the extent that they generate cash flow, investors are going to look for some of that cash to come back to them, or they're going to look for that cash to be profitably deployed," added Robert LaFleur, a lodging-and-gaming analyst with the investment bank Cantor Fitzgerald L.P.
Michael Duncan, senior vice president and controller of Orlando-based Wyndham Vacation Ownership, said Wyndham has been using the installment method for many years. Wyndham is the market leader in the time-share industry, with about 11 percent of all units, according to SunTrust research, and annual revenue of about $2.3 billion.
No. 2 Marriott Vacations owns about 7 percent of all time-share units and generated about $1.6 billion in revenue last year.
Duncan declined to say how much income tax Wyndham defers annually, though he said his larger company's savings were proportional to Marriott's.
A spokeswoman for Disney Vacation Club, the time-share arm of the Walt Disney Co., would not discuss the unit's taxes. Representatives for Starwood Hotels & Resorts Worldwide Inc. did not respond to requests for comment. Both companies' time-share businesses are also headquartered in Central Florida.
Analysts say one reason Marriott Vacations may not have employed the strategy sooner is that it was overlooked when the company was still a division within the much larger Marriott International, which focuses on hotels. The time-share business began trading as a standalone company in November 2011.
Using the installment strategy has become trickier for the time-share industry as it has evolved away from selling one- and two-week "intervals" in individual resorts and settled instead on selling amorphous "points" that buyers can use at a variety of locations. The Internal Revenue Service has cracked down on at least one time-share developer using the installment strategy after the agency decided the sales were more akin to leases than actual property sales.
To comply with the IRS' interpretation, some time-share developers, such as Marriott, sell their points to buyers in perpetuity. Others sell through contracts of 50 years or longer, often with renewal options. Developers must also transfer the full benefits and obligations of ownership to buyers, such as the right to resell the points.
Time-share tax attorneys are now grappling with how to preserve their installment-tax status even as they develop shorter-term products, which are becoming more popular with consumers.
Sage One Gets Enhancements to Appeal to More Small Businesses
Anita Campbell over at Small Business Trends writes:
Annual customer conferences are typically a time to announce new products and enhancements to existing products. And the 2013 Sage Summit is no exception.
The software company announced this week that Sage One, its cloud-based accounting, project management and invoicing solution for small businesses, is getting enhancements.
According to Mike Savory, Sage One Product Manager for Sage North America, an iPhone app is coming in August. The mobile app is something business owners asked for so that they can perform work on the go, no matter where they are.
Then the fourth quarter of 2013 will see the introduction of Sage One Accountants Edition. This is a module that will allow a business owner’s accountant or outside bookkeeper to log in securely to the business’s financial records on the Sage One cloud platform. There will be no charge for an accountant to use the Accountants Edition. It will make the product more efficient for small businesses so that they don’t have to manually pass accounting records back and forth with their outside accountants.
A Canadian version of Sage One is also coming in the fourth quarter of 2013. It will have bilingual (French and English) support, as well as integration with Canadian banks.
Adding High End and Low End Editions
In addition, two new levels of the product will be launched. This autumn will see the launch of Sage One Basic in the United States. Sage One Basic will consist of a streamlined, online invoicing and payments application. It will carry a lower price point than the existing product, which is priced at $24 per month.
In 2014 a higher-end level is coming, called Sage One Extra. Sage One Extra will be a “true multi-user system” says Savory, and will add additional features.
According to Connie Certusi, Executive Vice President and General Manager of Small Business Solutions for Sage North America, Sage One Extra will be more attractive to somewhat larger small businesses. Currently the sweet spot for Sage One is for a small business with under 10 employees, although businesses up to 20 employees may also use it today. Sage One Extra edition will include more inventory management capability and other features appealing to the larger end of that range, up to around the 25-employee business, Certusi said. The addition of Sage One Payroll in 2014 will also increase the appeal to small businesses that have a number of employees.
Sage One at Sage Summit 2013
Sage One: A Young Product
Sage One was launched in the United States in the spring of 2012. Since then it has seen several enhancements. Among the added enhancements is the ability to accept mobile payments and electronic payments on invoices, as we reported in February.
The company also added bank integration this year. Customers can now download transactions from over 10,000 banks in the United States and import them into the Sage One online system (avoiding manual keying of data for each banking transaction).
Behind the scenes the product was also completely reworked to use a common global technology platform. Savory told us in an interview, “That’s not something customers see, but it’s important because it will allow us to speed up product enhancements going forward.” Sage has a presence globally. In the past each Sage country unit more or less created its own technology – now they will share common technology on the back end. ”On the front end there will always be product differences because of differences in the way business is conducted in different countries, different languages, different tax jurisdictions and different currencies,” Savory said.
Enhancing the product is something that goes on continually, Savory added. ”We employ ‘agile development’ and make a regular stream of product improvements every two weeks, based on customer feedback.”
Analysts and small business experts we talked with at the conference generally were positive on Sage One and the product direction. However, they see Sage North America as having work ahead of it to increase market adoption.
Said Laurie McCabe, an analyst and Partner in the SMB Group, “CEO Pascal Houillon has been proven right in his strategy of unifying under one brand name [Sage] in order for Sage North America to gain market awareness and grow. One of Sage’s challenges is how to get new customers. Sage One is one of several answers. With that product they’re drawing in the small business that today is using paper or spreadsheets.”
But, she adds, Sage One’s current situation demonstrates how much work is left, as well as how much opportunity is available. Out of Sage’s two million customers worldwide, about 10,000 use the Sage One product — “a small number when you think of how many millions of very small businesses are in the United States. It demonstrates a market opportunity. But to capture that opportunity the company needs to increase awareness. They also need to be found in every app marketplace out there — the Google Apps Marketplace, and more.”
Expert Barry Moltz agrees that Sage North America needs to “get the name out there” more. ”Awareness among really small businesses is the key.”
Sanjeev Aggarwal, Founder of the SMB Group, suggests that one avenue toward expanding awareness could be developer partners. Sage One is now poised for developer partners to “add value to the product.” He adds, “Sage has created the building blocks for developers to step up and extend Sage One by adding features and integrating with other products.”
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