Tuesday, July 30, 2013

Are Cloud Based Accounting Apps Ready For Prime Time? 5 Things You Should Know / QuickBooks Online, Sage One, Xero and FreshBooks are competing for the Tier 1 small market. Intacct and NetSuite are competing for the bigger guys. What’s the difference?

Gene Marks for Forbes writes: It was just only a few years ago that when a client asked me to recommend them a cloud based accounting application I had few options to offer. And now, seemingly out of the blue, there are many. Many good ones.
QuickBooks Online, made by Intuit INTU -0.56% (my company sells QuickBooks products), was for a while only a glorified bookkeeping application but the only game in town. Now it has not only evolved as better business system, but it also finds itself competing against other, low cost online accounting applications with a growing list of features. For example there’s Sage One, from Sage (another client of mine). And Xero. And FreshBooksIntacct and NetSuite.  For a business looking to take its accounting to the cloud there are at least these six major players providing options for you. And more up-and-comers too. But are these cloud based accounting applications ready for prime time? Should you feel comfortable taking your critical financial information and handing it over to these companies? Can these applications provide the same level of features and functionality that you’re now getting with your old-school, legacy, on-premise, but functioning accounting system? Should you make the switch?
If you’re a startup? Yes. If you’re an established company with a decent on-premise system then probably not yet. But soon. Why? Because the world of cloud based accounting applications is rapidly changing. The costs are coming down and the functionality is improving. So if you’re thinking of switching to a cloud based accounting system sometime soon then here are five things you ought to know.

1. You really don’t need to worry too much about security and uptime. Yes, they’re relatively secure and probably more secure than your own internal network (and definitely more secure than mine). The vendors either host data themselves or, like FreshBooks and Xero, use services like Rackspace. “Our service availability performance has been 99.99% since launching in 2007,” Jamie Sutherland, President of Xero U.S. told me. “Our service availability for the current calendar year is 99.998%.” Each application promises a certain amount of storage space and you can purchase more at a very low cost. You’ll have protection at the user level and most of these applications will also have further access protection against users who wish to export data or read/write in certain fields. The risk of some kid from Malaysia (or some secret military agency from China) hacking into your data and using it for nefarious purposes is always there, but that risk will never go away. All of the companies provide you with options for externally backing up your data or getting a database copy. Just be careful – like with any company offering cloud based services you’re still exposed if that company suddenly goes belly up or you have a serious billing dispute that causes them to cut off access to your data. Think about that before you sign any long term contracts.

2. There are two types of customers for cloud based accounting systems: Tier 1 (small) and Tier 2 (bigger than small). Most of the vendors I’ve talked to divide them up between those with less than 10 users and those with more than 10 users. QuickBooks Online, Sage One, Xero and FreshBooks are competing for the Tier 1 small market. Intacct and NetSuite are competing for the bigger guys.  What’s the difference? The vendors selling to the smaller market are doing so directly and are offering less features in their product (see below). Intacct and NetSuite have channel partners and accounting firms who are usually needed to implement their systems because of the complexity. And as you’ve probably guessed the cost of the Tier 2 products are more expensive than the Tier 1 products.

3. No one’s figured out migration. They may talk a good game, but none of these vendors have really come up with a seamless way to migrate data from your old system to theirs. Even if it’s their system. “It’s our biggest obstacle,” admits Sage One Product Manager Mike Savory. “Migration can be complex and expensive.” So you better watch out – if you want to get anything more than a basic list of customers and vendors into your new system you’re going to meet up with some challenges. Expensive challenges. Your most cost effective strategy will likely be to keep the detailed historical data in your old system for reference purposes and just journalize your opening general ledger into the new system.

4. The cost can be potentially higher than you think. Why? Most of the Tier 1 applications range from $20-$40 per month per user, and this usually doesn’t include payroll. A three user QuickBooks Online system therefore could cost you $1,440 per year or $4,320 over three years. However a three user, on-premise version of QuickBooks Premier has a one-time cost of $1,999. Of course there’s optional maintenance and support you can buy later. And you do need a server to stick it on. But for many established companies the annual cost of using a cloud based accounting system significantly exceeds the cost of just buying an on-premise version (or simply upgrading their existing software). Not only that, but there are less features.

5. Yes, there are less features. All of the vendors boast about their great user interface. But that’s tough to judge. The Tier 1 cloud based products offer general ledger, billing, payables, and a little project and inventory management. Most of the on-premise applications still offer a lot more. For example Sage 50, Sage’s on-premise small business accounting product, offers way more options for the typical small business than Sage One, like better reporting, dashboards, purchase and sales order management, deeper inventory controls, automation, assemblies and job costing. This is mainly due to two reasons: the cloud based products are still relatively new and are playing catch up and the vendors are targeting these products at the very smallest of companies which, for the most part, don’t require all this stuff. “This is why we’re offering “hybrid” solutions to our customers” Sage’s EVP and GM of Small Business Solutions Connie Certusi told me. “That way our customers can get the benefits of Sage 50 while taking advantage of cloud based features as they need.” Many of the cloud based providers, like Xero, offer programming interfaces to their products to help developers build connections to other products too. Intacct and NetSuite meanwhile, do provide the advanced functionality that you would expect from a full-blown cloud based ERP (Enterprise Resource Planning) system. But you’ll pay. NetSuite, for example, could cost a 5-10 user company anywhere from $5,000-$15,000 per year depending on requirements, services and modules needed.
So are cloud based accounting systems ready for prime time? Definitely for startups and for very small companies who want to keep their infrastructure at a minimum.  They’ve matured. And their vendors are placing big bets on their future. They are investing heavily in mobile functionality like workorders, T&E and quoting. They are adding features and integration to other applications, particularly customer relationship management applications. And as the cloud gets faster and more reliable I would expect to see not only their prices continue to come down but their functionality increase so that more and more larger, Tier 2 companies will have to seriously consider the benefits of migrating away from their existing in-house systems. Probably not in 2013 or even 2014. But that day is not as far away as you may think.
Posted on 7:04 AM | Categories:

11 up-and-coming cloud accounting applications / Summary: The playing field is becoming rather crowded as cloud startups vie for attention among SMBs against venerable offerings from Intuit, Microsoft and Sage.

Heather Clancy for Small Business Net/ZD Net writes:  I couldn't help but notice that No. 3 on the wish list of cloud services desired by accidental IT managers is accounting and financial applications.


Like customer relationship management (CRM) records, company's financial records are the sort of thing that it is convenient to be able to access regardless of location. Wouldn't it be good to know if an account is falling beyond in payments, especially if you are about to go ask them for more money? And woudn't it be easier on everyone if you and your managers could approve expense submissions on an ongoing basis, rather than creating a bottleneck in the process?
Naturally, all of the well-known SMB accounting vendors -- including Intuit, Microsoft and Sage -- are nurturing cloud-hosted editions of their applications. But there are also a slew of startups approaching this space, most of them with strong mobile access propositions as well as ties into other cloud applications for small businesses, including Google Apps.
The cloud accounting service providers might not have the legacy credentials that can be boasted by the big guys, but they are gaining traction as options for small businesses that might be looking for something a bit different or just something simpler. 
FinancialForce.com - The San Francisco-based company, which has backing from Salesforce.com, is 100 percent focused on accounting and finance applications that are integrated with venerable CRM platform. It's probably more than a really small business will need, but the service has the advantage of both an impressive integrator network as well as a whole ecosystem of related applications that can be plugged into its platform.
FreeAgent - As the name suggests, one focus of this solution is freelancers who need a straightforward way to handle invoicing and bookkeeping. It "plays nicely" with Google Apps, PayPal, Basecamp (the project management service) and Capsule (CRM). There's also a module for multicurrency invoicing (which makes senses as the company behind it is from the United Kingdom). The monthly subscription is $24 per month.
Freshbooks - The Toronto-based service provider got its start as a billing alternative (the founder accidentally saved over an invoice in another accounting system), but it includes modules for expenses, time tracking and more. There are strong mobile applications for Apple iOS (smartphone and tablet) and the service now boasts 5 million users. Pricing starts $19.95 per month, although you can try it for 30 days for free.

Intacct - Based in San Jose, Calif., the 14-year-old cloud financial management software company just reported a 38 percent increase in bookings for its fiscal year ended June 30, 2013. It counts around 6,000 organizations as its customers. This is not exactly a simpler solution -- one of its strengths is a whole suite of integrated financial management applications for things like inventory management, vendor management and financial reporting. But it is probably a good option for fast-growth organizations, as the company has a big network of CPA firms and VARs that can create customized installations. Some trivia: the company's name is literally a mashup of the word's "Internet" and "accounting."
Kashoo - Vancouver-based Kashoo has made its mobile application (especially the iPad version) an integral part of its simple service. As of early May 2013, it had more than 100,000 users -- and it counted almost 50,000 downloads of the mobile app. (There is also an Android edition.) Pricing starts at $15 per month; there are also some fees for the in-app services offered within the mobile application. 
Monchilla - Simplicity is the rallying cry for this service provider, which launched in 2012 and is being used by thousands of businesses (as of March 2013). The company uses recurring financial information that is already being generated by financial institutions and banks, and it includes a complete payroll module. The company is realistic, so it offers ideas for ways that you can integrate the service with Intuit QuickBooks. Or not. The pricing is simple: You pay $5 per company per month. "I use it to track expenses and invoices, run payroll through direct deposit, calculate monthly and quarterly taxes, reconcile transactions with our bank account and to run reports," writes Todd Storch, office manager with Rock Therapy Services, who contacted me after I requested a testimonial. "The ability to project your future bottom line by entering recurring (or estimated) income and expenses is a great feature that sets Monchilla apart from other accounting software."
Outright - The company was founded by two ex-Intuit employees, who were looking for one place to capture and organize the financial data for their own startup businesses. One of the top applications in the Google Apps marketplace, there are more than 200,000 small businesses using the software. The service was acquired by Go Daddy in 2012, and Outright delivers the behind-the-scenes bookkeeping for the Internet company's small-business customers. The basic service is free. Pricing starts at $9.95 per month if you want feautures such as sales tracking and reporting.
Rhino Accounting - The biggest plus of this very simple, free application from Vancouver-based Rhino Computing is that it can be completed integrated with a Google Apps accounting. For example, it will recognize your Google Contacts database. Eventually, there will be paid add-on modules, but if you need something super simple to start, Rhino is one of the "most installed" services in the Google ecosystem.
Wave - Wave Accounting is part of a family of cloud applications from a Toronto-based developer. It includes all the basic accounting features you would expect, including payroll integration, and can be connected to information from PayPal and Shoeboxed. The service is free, but there is a catch: You'll have to view offers from companies like Amex, Staples and Dell that are using it as a way to advertise their services and products for small businesses. 
Xero - There is a strong mobile component to this extensive set of core accounting modules, which include payroll, multi-currency support, reporting dashboards, and inventory insights. The multinational company has also been big on negotiating useful integrations, such as itsrelationship with payment processing service Stripe. Xero has more than 111,000 "paying" customers and 200,000 users in 100 countries. Pricing for small businesses starts at $19 per month.
Zoho - The Zoho Books service is just one in the Pleasanton, Calif., company's extensive suite of online applications for small businesses. It handles the tasks you would expect, including fees from financial accounts, unlimited invoicing, expense tracking, financial reports, reconciliation and multi-currency support. The subscription is $24 per month. (You can pay as you go, although you will receive a break if you buy a whole year upfront.)
Posted on 7:03 AM | Categories:

A Quick 529 Tax Tip That Could Save You Big Money / Many states allow account holders to withdraw contributions shortly after making them, meaning you could get a tax break for adding money you plan to spend on college this fall.

Adam Zoll for Morningstar writes: Question: My son will be entering college in the fall, and I own a 529 college-savings account in his name. Rather than pay tuition directly to the school, can I add the money to the 529 so I can claim the state tax deduction and then withdraw it to pay tuition?

Answer: At first blush your idea might strike some readers as far-fetched. Surely states wouldn't give someone a tax break just for putting money into a 529 account for a few days, right? But the surprising answer is that many states do allow this, imposing no waiting period on 529 withdrawals and allowing account holders to deduct contributions from their state income taxes regardless of how long the money is held in the account. For families with near-term college expenses, this 529 tax loophole can be a relatively easy way to lower their state income tax bill in the process of paying tuition, room and board, and other college-related costs.


The idea is rather straightforward. Let's say a family with a child attending school in the fall plans to pay all or a portion of tuition out of pocket. Rather than paying the school directly, the family instead adds the funds to an existing or newly opened 529 account in the student's name and then withdraws them shortly thereafter to cover the tuition payment. This allows the family to deduct the amount of the contribution from their state income taxes, assuming their state offers a tax break on 529 contributions, they haven't already maxed out their 529 deduction limit for the year, and their plan has no waiting limit for withdrawals.
The higher the state income tax rate and the higher its 529 tax-deduction limit, the more this strategy is likely to pay off. For example, Illinois allows residents to deduct up to $20,000 per year in contributions to its 529 plans (for a couple filing jointly, or $10,000 for an individual) and has a flat income tax rate of 5%. If a family contributed $20,000 to one of the state's 529 plans and then withdrew the money for tuition this fall, it would gain a tax break of $1,000 ($20,000 x .05).


First, Know the Rules But before embarking on this strategy it is important to remember a few key considerations. First, it's important to check with the 529 plan to find out what its rules are regarding when contributions may be withdrawn. Plans may impose a waiting period of a few days or weeks before withdrawals may be made to ensure that the contributed funds have cleared.
The decision as to whether to allow tax breaks for 529 contributions that are withdrawn after only a short time in the account varies from state to state, but most states do not impose a waiting period, according to FinAid.org, a college-savings website. Some states impose a one-year waiting period before 529 contributions may be withdrawn or limit the tax deduction to the amount of contributions minus withdrawals.
For residents of the 34 states that offer state income tax breaks for contributing to a 529 plan (usually for in-state plans only), this loophole could amount to tax savings of hundreds or even thousands of dollars.


Keep in Mind Federal Tax Breaks, Other ConsiderationsOnce you've confirmed that your state does not impose a waiting period before withdrawing 529 contributions, and that you are eligible for a state income tax break on contributions, there are a few more details to keep in mind.
  • Money in a 529 college-savings plan must be used for qualified college expenses, which include tuition, fees, room and board (if enrolled at least half time), books, supplies, and computer equipment used for educational purposes.
  • Expenses paid for by using a 529 plan are not eligible for federal tax breaks such as the American Opportunity Tax Credit or Lifetime Learning Credit (see this earlier Short Answer column for more details on these tax breaks). The first of these, which is available to singles with modified adjusted gross incomes lower than $90,000 and joint filers with incomes lower than $180,000, could save you up to $2,500 on your federal taxes if you qualify, which is likely far more than you'd save on your state taxes by paying for the same expenses using money added to a 529. Therefore, before using the 529 strategy described above, think about how you can coordinate federal and state tax breaks to maximize your savings or ask a tax professional for help.
  • Pay attention to your state's tax-deduction limit on 529 contributions. Some states allow residents to deduct $20,000 or more per year in 529 contributions--Colorado's annual limit is a staggering $350,000--while others have very low annual limits--Maine only allows a deduction of $250 per beneficiary. The lower the limit (and the lower the tax rate you pay), the lower your potential savings.
  • The state tax break is only for the year the 529 contribution is made. If you add money this year in anticipation of withdrawing it in early 2014, the tax break for your contribution will only apply to this year. If you've already hit your state's 529 tax-deduction limit this year, you might want to wait until after Jan. 1, 2014, to contribute money you won't need until then.
  • Invest short-term 529 contributions safely. Even for a holding period as short as a few days, make sure any money earmarked for upcoming college expenses is invested in a cash-equivalent investment such as a money market offered by the plan. The last thing you want is for your tax-saving move to result in the loss of principal if the stock market happens to take a dip while your funds are invested in the 529.
  • Finally, keep an eye on plan fees. If you are opening a new account or choosing a new investment option within the plan, there could be maintenance fees associated with the move, so factor those into your calculations. Likewise, paying a sales load for an advisor-sold plan probably doesn't make sense in this instance.
Not all college savers will be able to take advantage of the 529 tax-savings loophole involving short-term contributions. But for those who can, doing so can provide at least a little relief when it comes to paying college expenses. Whether you save enough to cover a few textbooks or even just a few nights of pizza at the dorm, you might find the payoff well worth the effort.
Posted on 7:03 AM | Categories:

How to double your estate-tax exemption

Melody Juge for MarketWatch writes:  Let's take a look at the portability provision of the federal estate-tax law and see how it could potentially double your federal estate-tax exemption.


1. What is the portability provision
The portability provision is the allowable transfer of the federal estate-tax exemption from the estate of the first spouse to die to the estate of the second spouse to die.
This portability provision was set to expire in January of 2013 as part of the fiscal cliff. Not only did the provision not expire but there is no expiration scheduled as of this writing. I checked with Beverly Hills estate-planning attorney Randy Spiro and asked if there was anything about this provision that we should be especially attentive to.
Randy said, "Currently our administration in Washington is attempting to change the limits on the $5.25 million federal estate tax exemption to $3.5 million but interestingly enough, portability isn't on the table."
2. Double your federal estate-tax exemption
The maximum federal estate-tax exemption for people dying in 2013 is $5.25 million per person and that amount will continue to be indexed for inflation in 2014 and beyond.
For couples who are legally married, the federal exemption of $5.25 million may pass directly from the first-to-die to the surviving spouse, thus providing a federal exemption upon the second spouse's death that will increase from $5.25 million to $10.5 million.
The only way this opportunity to double your estate-tax exemption can be realized is if IRS Form 706 is filed timely — that is within nine months of the first-to-die.
The surviving spouse may receive a six-month extension by filing Form 4768 — within nine months of the first spouse's death. The extension will provide the surviving spouse with a total of 15 months to file Form 706.
3. Beware of potential complications
Estate-tax planning and the interpretation of the provisions, laws and rulings relating to it can be challenging. Just the calculation of the gross and net estate-tax liability can be complicated as it relates to your particular state's laws on estate and inheritance as well as federal estate-tax laws.
A simple error in calculation can cost the named heirs hundreds of thousands of dollars in additional tax and the lack of awareness of the need to timely file Form 706 after the death of the first spouse can create serious repercussions for the ultimate beneficiaries.
4. Plan well
Many people don't establish formal estate plans but create wills and trusts and assign an executor to their estate. Without a professional estate plan created by an attorney who specializes in estate tax planning, important considerations can be overlooked.
Here is an example:
The adult children of a surviving spouse who are the heirs to an estate have just been told that the federal estate tax due and immediately payable is $300,000 but could have been zero if only Form 706 had been suggested and timely filed for the first spouse to die.
Here is a simple calculation that supports the above example:
Form 706 wasn't filed therefore there is no portability of the federal estate-tax exemption for the first spouse to die. The value of the estate on the death of the second-to-die is $6 million minus $5.25 federal estate-tax exemption = $750,000 x 40% estate tax = $300,000 federal estate tax due.
So imagine being hit with a $300,000 federal estate tax bill that could have been avoided by the timely filing of Form 706.
Here is the same scenario applying the timely filing of IRS Form 706:
Form 706 was filed timely at the first death which allowed the $5.25 million federal estate-tax exemption to be passed to the surviving spouse. The value of the estate on the second-to-die is $6 million; there is $5.25 million federal estate-tax exemption granted from the portability provision on the first death plus $5.25 million federal estate-tax exemption allowed on the second-to-die, this equals a $10.5 million total federal estate-tax exemption available. There is zero federal estate-tax due on this $6 million estate because of the election to use the portability provision which was allowable due to the timely filing of Form 706 on the death of the first spouse.
Estate tax planning can be complicated. Please seek your own professional legal and tax guidance for each particular situation. The fees that you will be charged will be minimal compared with potential penalties and taxes due for miscalculations or misinterpretation of the IRS code as it relates to your estate tax liability.
Posted on 7:02 AM | Categories:

Family Businesses Are Taxing

Carrie Hall for Forbes writes: Taxation has never been so multifaceted, and failing to consider all the elements could prove costly to your family and your business. It’s important to make sure your executives know the ramifications of their decisions and take a holistic approach to tax planning.
Are you expanding? Plotting investments? Sorting out financing and liquidity? Tax laws affect all of the above and factor heavily instrategic plans for family businesses in particular.
Without careful consideration, the following tax factors could cause you to stumble.
Personal tax
You may have business interests, homes and assets around the globe. Liabilities can surface in multiple countries based on residence or asset location. Failing to consider your international affairs can erode your wealth and impact the disposition of your estate. Safeguard your family and your business for future generations by ensuring your tax advisor is globally integrated and understands how to best serve your interests in each jurisdiction and collectively.
Corporate tax
Whether you’re restructuring or acquiring another business, identify the most efficient tax structures that will apply. Prepare for global tax and legal changes and the potential implications for your company. This will enable you to capitalize on fiscal stimuli and incentives, such as climate change program tax credits or “green” research.
Tax controversy
The fine print of complex laws and the gray areas with multiple answers, such as valuation, can give rise to tax controversy. Resulting litigation and penalty costs can be steep. Adding international tax controversy and risk management to your strategic plan could yield multiple dividends and provide greater certainty and flexibility. You may be able to free up cash and reduce your tax compliance costs.
International issues and transfer pricing
There are a host of potential tax policy changes and international disclosure agreements that could affect your international footprint. Many tax administrations are adopting new policies and approaches to improve compliance through service and enforcement. And they’ve accelerated international collaboration. Set a clear strategy for cross-border tax controversy and risk management that syncs with your performance improvement and expansion plans.
Family trust management
Proactively managing your tax plan and weighing your succession planning options could potentially reduce your tax burden and exposure to tax controversy. The tax benefits of trusts can be attractive, but you’ll want to heed strict rules to protect them from inheritance or gift taxes. Many countries have estate tax treaties that offer exemptions or reduced tax rates on transferred assets.
What are your ideas for effective tax management? How do you keep liabilities to a minimum?
Posted on 7:02 AM | Categories:

New “QuickBooks Connections” Conveniently Restructures Accounting Management Platform / Square 9 Softworks takes accounting processes to the next level with an end-to-end solution to streamline financial document workflow.

Square 9 Softworks, announced today the release of QuickBooks Connections, a comprehensive solution for automating small business accounting practices. Integrated with QuickBooks®, the number one rated small business accounting program, Square 9’s QuickBooks Connections features a series of tools to help users best facilitate their company specific accounting processes.
QuickBooks Connections features QuickBill, which increases payables efficiency through a single step process for document capture and bill creation. Through a specialized workflow activity, users automatically create bills within QuickBooks using data extracted by SmartSearch during invoice capture, thus driving even greater value from their investment in document management.
Coupled with integrated scanning and direct access to financial documents from within QuickBooks, Square 9’s QuickBooks Connections combines convenient document capture with accessibility through any web or mobile device. “In recent years we put our focus on enterprise class integrations with products like Great Plains and Navision,” Stephen Young, President and CEO of Square 9 explains, “but with more than four million users and 85 percent of the SMB market, we felt QuickBooks was a platform we couldn’t afford to ignore any longer.”
The solution showcases KeyFree Indexing, an advanced data extraction tool that pulls high value information from the vendor invoice with minimal effort. It then releases that information to QuickBooks to generate a bill, thereby eliminating the need for duplicate data entry. SmartSearch combined with Square 9’s QuickBooks Connections provides additional tools for streamlining accounts payable processes including automated invoice approval routing. Also featured is a workflow activity for instant invoice matching with packing lists and purchase orders prior to payment to ensure compliancy of Generally Accepted Accounting Principles (GAAP).
QuickBooks Connections fully supports organizations of any size, as a formulated solution to manage critical document information with simplicity. By automating the course of financial records and facilitating the activities of the accounting department, Square 9’s QuickBooks Connections delivers a value-driven solution to streamline administrative content.
To see the solution in action, a four-minute video is provided at http://www.square-9.com/quickbooks-connections.
About Square 9 Softworks:
Square 9 Softworks is an award winning developer of scanning and document control solutions that enables its customers to realize their dream of a paperless office. With solutions for document workflow and mobile document delivery, Square 9 has helped companies of all sizes to get control of their paper intensive processes with solutions that meet the rapidly evolving needs of the business community.
SmartSearch, Square 9’s flagship document management software has been recognized continually for its innovation including Buyers Laboratory’s coveted five star rating in 2013 and Winter pick award for Outstanding Enterprise Document Management Solution in 2013.
Square 9 Softworks distributes its solutions internationally through a network of highly skilled channel partners from its corporate offices in New Haven, Connecticut. For further information, visit http://www.square-9.com/.
Posted on 7:02 AM | Categories:

10 innovations that can save money for small businesses / New and evolving technologies are creating unprecedented opportunities for smaller companies.

Jack Wallen for Tech Republic writes: Innovation drives technology forward, making the business world run more smoothly and providing ways to save money. No business knows this more than the small business. Without the kind of cost savings innovation brings, many of them would close their doors for good. Here are some specific ways technical innovation is helping smaller businesses thrive.

1: Linux and open source

 Linux and open source have not only matured into a business-ready platform, they have pushed innovation forward on a number of fronts. From the server all the way up to the desktop, Linux and open source have helped force the competition to reevaluate how the user and business interact with hardware and customers. The Linux desktop has proved that more can be done with a user interface than the worn-out Start button/task bar metaphor. And with the power of the Linux server, businesses can work with tools like customer resource management, human resource management, and other platforms they might not otherwise have access to. Along with this innovation comes considerable cost savings.

2: Electronic invoicing/receipts

Electronic invoicing and receipts have started invading small businesses, and with good reason. The ability to email receipts to customers helps businesses save the cost of receipt printer paper -- and on printers altogether. Although it may seem like a negligible cost at first, over time all that paper adds up. And the continued growth and evolution of electronic invoicing is making it more efficient for small businesses to get paid. And speaking of getting paid…

3: Mobile payment systems

Mobile payment systems have finally become mature enough to be used, reliably, by any small business. You really see these popping up in the restaurant industry and small boutique shops. Apple iPads are quickly establishing themselves as the new world cash register system, and nearly any smartphone can now accept payments thanks to tools like the Intuit's GoPayment. With these new, reliable, cost-effective payment systems, your business can easily travel, and it can quickly and effortlessly take payments for services and products.

4: Blogging platforms

Blogging shouldn't be shoved off your radar simply because it has empowered everyone to seem like an authority on every subject known to man. Blogging platforms can enable your company to easily and cheaply connect to your customers and audience in ways never before possible. And with platforms like WordPress, you have at your disposal a wide-range of add-ons that can transform that simple blogging platform into a full-blown business-centric, content-driven Web site. So don't pish-posh blogging platforms and the innovations they bring.

5: Crowdfunding/crowdsourcing

Many startups are using crowdfunding and crowdsourcing to fund and/or expand their projects and help them get off the ground. Services like Kickstarter and Fundable focus on just that – helping you fund your project. Although this sounds like professional panhandling, you'd be surprised at how many people and companies successfully achieve their goals this way. Without the help of innovative and well-crafted services, this wouldn't be nearly as easy.

6: Social media aggregation

Social media aggregation is one of the easiest forms of keeping your finger on the pulse of your customer/client base. Using various tools, you can keep abreast of what your client base wants. You can also quickly post to multiple social networking services to announce specials, promotions, and much more. And what business would be willing to turn down free marketing? Ultimately, the innovation of social network (and the aggregators that make using them easy) has helped bridge the gap between company and client faster and better than most other technologies -- at little to no cost.

7: Cloud-based groupware

If you don't want to pay for an Exchange server and your needs are fairly minimal, cloud-based groupware could be the answer. Both Google and Zoho are amazing platforms for your groupware needs. Small companies may be able to get by with the standard Gmail and Drive. Larger companies might need to turn to the more enterprise-focused Google Apps. Zoho offers numerous tools on its platform – a la cart -- that can have you and your business expanding in a variety of ways without having to drain your company budget.

8: Tablets

Tablets offer an inexpensive way to get your employees and your business mobile. Not only do they allow for serious work to be done on the road, they enable you to conduct transactions more efficiently, thanks to the myriad software titles available. Combine powerful productivity tools with invoicing and payment software, and modern tablets provide a complete office-on-the-go experience. Eventually, the tablet will completely replace the laptop as the go-to hardware for mobile business users.

9: DSLR cameras

DSLR cameras and video-editing software have come a long way, even though they've been around for a while. With these tools, you can create professional-looking marketing content in-house. And the DSLR cameras aren't limited to still photography. With amazing sensors and lenses, DSLR cameras can shoot HD movies brilliantly. You can take your marketing to the next level and create perfect YouTube-ready commercials to help promote your business. Video-editing software doesn't have to come in the form of Final Cut Pro -- that will run you more than $1,000 USD. You can opt for the open source OpenShot and still get great transitions, titles, effects, and much more.

10: 3D printing

3D printing is offering a world of promise for many markets. These amazing devices enable the small business to easily fabricate products that can serve as three-dimensional mock-ups or even as the final product. 3D printers have come far in the last few years, and the results are close (if not dead on) to a finished product. From clothing, to casts, to models, to -- well, just about anything. Compare this to the price of having mock-ups and products machined, and the cost savings is apparent. On top of that, you can easily "print" one-off products geared specifically to individual customers, which will set your business well apart from others.

Endless innovation

Innovation -- even when it's the evolution of an existing product -- means businesses can work more efficiently and more cheaply. Not all of these innovations make sense for your business, but many do. And as each day passes, even more innovations will come to light to expand the world of business and IT even further.
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