Starting A Business: Tips For Using QuickBooks Online

Tom Taulli for Forbes writes:  One of my clients uses a spreadsheet to keep track of the finances for his business. But as should be no surprise, it has turned out be more of a hassle than its worth.

So he asked me about getting a software package. The good news is that there are many great solutions available – and the pricing is generally affordable. But for me, the solution I have the most experience with is QuickBooks Online.

OK, what are some of the steps that a small business owner can take to get lots of value from the software? Here are some tips:
 
Cloud: For small businesses, this is really the ideal approach. You can access the software so long as you have access to the Net (which seems to be everywhere nowadays!) As a result, there is no need to back-up files or maintain any IT infrastructure, such as a server. You also do not have to manage multiple versions of the software since it is automatically updated.

Mobile: QuickBooks Online allows you to access and manage your accounting from your smartphone or tablet. Since many small business owners are often outside the office – or don’t have one – this is a tremendous convenience. You can also setup alerts and email periodic reports, such as on your cash balance or customer payment activities.

Invoices: QuickBooks Online makes it super-easy to create invoices and have them automatically sent. You can also provide an option for your customers to pay, say via credit card or ACH.

As you can see, accounting is more than just about tracking information. It can be a powerful tool to improve your business. And yes, one of the best ways of doing this is making sure you get paid!

Activity Log: This shows the activity in your QuickBooks account like logins and financial transactions. It’s a good idea to keep an eye on this feed. If you see unusual activity – say lots of checks going out – there could be fraudulent activity.

What’s more, you should provide limited login rights to your employees. For example, a person should not have the ability to record a transaction and also send out a payment. This simple “internal control” should help reduce the possibility of fraud.

Apps: QuickBooks has third-party software you can add to your system. Just some of the functions include inventory management, CRM and project management.

Perhaps one of the most interesting apps is Bill.com. It allows you to make your business “paperless.” That is, you scan your bills and they are automatically sent to QuickBooks.  The app then provides for approvals, storage of contracts, check printing and updates to the cash flow projections.

Tom Taulli operates MasterCFO, which helps early-stage companies with accounting, payroll and taxes.

Obamacare Will Be a Boon for Paid Tax Preparers

Mark Lin for the Motley Fool writes: Obamacare, introduced with the aim of providing quality affordable health care, will add significantly to the population of new tax filers and increase the complexity of tax filing. As a result, tax-preparation service providers such as H&R Block(NYSE: HRB  )  and JTH Holding (NASDAQ: TAX  ) are expected to be key beneficiaries. In contrast, the impact on tax preparation software company Intuit (NASDAQ: INTU  ) is less certain.

Reform driving the need for paid tax preparationTwo key tax-related implications of the Affordable Tax Act are the advanced tax credit and the tax penalty. Firstly, the government is providing the lower income population with advanced tax credits for their health insurance coverage needs. In return, a beneficiary is bound by law to file a 2014 tax return in 2015. Secondly, a person who neither meets the government's baseline health coverage requirement nor is exempt will incur a tax penalty when they file a tax return in 2015.

Without going further into the nitty-gritty details of the tax act, it is obvious that more first-time tax filers will come on board in 2015. Also, more people will require assistance to file their tax returns, given the complexity of calculations and the likelihood of new IRS documentation.

Online and offline marketing efforts Most people are naturally confused about what the Affordable Care Act means to them, along with the potential tax implications. In today's world, it is typical to simply search for answers on the Internet before even speaking to family or friends. JTH has introduced its own web portal complete with commonly asked questions and a tax subsidy calculator. The website address (http://www.health caretaxinfo.com/) makes it easy for potential clients to knock on its doors from a search engine optimization, or SEO, angle. Although the website address of the portal is titled in a generic manner, 'helpful' links to JTH's Liberty Tax Service are displayed prominently on the site.

Of course, not everyone is Internet-savvy and some will still prefer to meet face-to-face to discuss their tax issues. Consequently, JTH has also organized seminars for individuals and small business owners to educate them. According to JTH's recent poll of 800 clients, about 25% of them are without health insurance coverage, which is a clear indicator of the potential demand for its services. JTH's online and offline marketing efforts should put the company in a good position to seize the associated growth opportunities.

Size and brand advantages Similarly to JTH, H&R Block has gone all-out to reach out to its current and potential customers through a health micro-site, digital ads, and focus groups. However, H&R Block has a slight edge over JTH for two reasons.

Firstly, H&R Block has a larger base of clients than JTH; it is the largest tax preparer in the U.S. while JTH is third. Since it is easier to sell new services to existing clients, H&R Block has an edge in churning out incremental revenue opportunities from this entire exercise. H&R Block is fully capitalizing on that by sending each of its clients a customized health report based on the tax information they submitted. This report will allow its clients to determine their eligibility for advanced tax credits and other government assistance programs, and estimate insurance premium costs and potential tax penalties.

Secondly, the specialized and customized nature of tax filing services suggests that people will feel safe leaving their tax filing needs in the hands of a trusted retail brand like H&R Block. This situation favors the incumbent, H&R Block, which has the most recognizable brand in the space.

Choosing between DIY software and outside tax preparersIntuit has updated its TurboTax software for the most recent changes resulting from the Affordable Care Act. It also set up a portal titled TurboTax AnswerXchange, which boasts a list of more than 700,000 frequently asked questions, or FAQs, relating to the Affordable Care Act. By answering a series of simple guided questions, users of the portal are also able to find out if they are required to be insured, and if yes, what the approximate cost will be.

While I don't deny that all this is very helpful, Intuit may not be able to capitalize on the increased tax-filing needs that result from the Affordable Care Act to the same degree as its tax-preparer peers. New tax filers are unlikely to commit time and effort to learning a new tax preparation program such as TurboTax.

Even for seasoned tax filers faced with new IRS forms and difficult calculations, there will still be a steep learning curve for new features or modules to tackle the new filing requirements. In fact, there is likely to be a shift in market share from do-it-yourself tax filing to paid tax preparation services, to the dismay of Intuit.

ConclusionJTH estimates that there will be an increase of between 1.5 million to 2 million tax filers this year as a result of the Affordable Tax Act, which suggests that future growth prospects look very promising. Unfortunately, the positives have been largely factored into the stock prices of both JTH and H&R Block, as they trade at the high end of their 52-week trading range. Investors will be rewarded for their patience if they wait for better entry prices.

Tax-aware investing is extra important now

Robert Powell of USA Today writes: For pre-retirees and especially for retirees, it's not what you earn, but what you keep — especially in the wake of tax changes for 2013. Here are five things you can do to improve your after-tax returns in response to increasing tax rates. If you're an investor and are already in a high tax bracket, your taxes have gotten higher. The American Taxpayer Relief Act of 2012 (ATRA) increased the top tax rate on dividends from 15% to 20% and the top rate on ordinary income and short-term capital gains from 35% to 39.6%. The tax increase applies to couples with more than $450,000 in taxable income and single filers with more than $400,000 in taxable income.

And the 2010 Affordable Care Act (ACA) added a 3.8% Medicare surtax on the net investment income of those high-earning taxpayers. And that tax, which includes income from interest, rents, dividends and more, can increase the total tax rate to as much as 23.8% for long-term capital gains and 43.4% for ordinary income.

Given those changes, tax-aware investing is more important than ever before, say Robert Keebler and Peter Melcher, both partners with Keebler & Associates, and the co-authors of "Increased Tax Rates and Investment Strategy," an article just published in Investments & Wealth Monitor.

No. 1: If you're affected by ATRA and ACA, increase investment in tax-favored assets.

Tax-favored assets produce tax-exempt income, are taxed at lower rates, or defer taxes. For example, if you've invested in taxable corporate bonds, you could switch to tax-exempt municipal bonds.

And in the wake of ATRA, Keebler and Melcher say there is no tax rate advantage to growth stocks over dividend-paying stocks. Most dividends — that is, qualified dividends — continue to be taxed at the same rate as capital gains (20% at the highest marginal income tax rate) instead of at ordinary income rates (39.6% at the highest marginal income tax rate) following ATRA, and stock gains and dividends are both subject to the net investment income tax, Melcher says. On the other hand, the capital gains can be deferred while the dividend income can't.

So, high-income investors might want to look at how their interest income is taxed vs. capital gains. Interest income is taxed at 43.4%, while capital gains on stock sales are taxed at 23.8%. In other words, stocks retain a higher percentage of their return after tax — 76.2% vs. 56.6%. And this makes stocks a more tax-efficient investment, say Keebler and Melcher.

As for assets that produce greater tax-deferral, Keebler and Melcher recommend tax-efficient mutual funds, which are managed to minimize capital gains and dividend distributions. You might also consider index funds, which typically do little trading, and often pay little in capital gains distributions. And exchange-traded funds don't have to sell securities to meet investor redemptions, and also have low capital gains distributions.

Consider, too, using buy-and-hold strategies for your investments. Generally, say Keebler and Melcher, the lower a portfolio's turnover ratio, the greater the after-tax returns will be.

To be fair, total turnover may not be the best measure of tax efficiency. What counts, say Keebler and Melcher, is net turnover — capital gains that can't be offset with capital losses.

Remember, when contemplating these tactics, the goal is not to minimize taxes but to maximize after-tax return, say Keebler and Melcher. You shouldn't let tax considerations drive your entire investment strategy.

No. 2: Manage gains and losses from year to year.

If you want to save 19.6% on your tax bill consider holding your assets to take advantage of long-term capital gain rates — for at least one year and one day. Long-term capital gains are taxed at a maximum capital gains rate of 23.8%, while short-term capital gains are taxed at ordinary income tax rates, up to 43.4%, including the Medicare surtax.

If you've made many purchases over time, you can use the last-in, first-out method to account for gains in stock sales. It means that when you sell part of your holdings, you assume that you're selling the shares you've held the longest. Once you choose this method, which works best when stocks are rising, you can't switch.

You can also reduce your tax bill by selling your losing stocks, Keebler and Melcher say. Let's say it's December and you face a big tax bill from assets sold at a gain during the year. To avoid this bill, you would sell enough assets with capital losses to net out the capital gains, or at least to reduce them. Be sure to wait 31 days before buying back the stock sold at a loss. Otherwise, the IRS will deem the sale a wash sale, and you won't be able to claim the loss.

Two notes of caution when using loss harvesting. One, you'll bear the risk that the stock price will rise during the 31 days you are out of the market. And two, it's better to harvest gains when rates are low and harvest capital losses while rates are high.

No. 3: Carefully construct your portfolio.

Building a portfolio that maximizes after-tax returns vs. one that maximizes pre-tax returns is not the same.

Keebler and Melcher say investors should allocate their assets among stocks, bonds and cash with an eye toward trimming tax bills. "In tax-aware investing, asset allocation is done in the usual manner, except that after-tax values are used for the assets instead of pre-tax values," say Keebler and Melcher.

No. 4: Manage asset location.

Once you decide how to allocate your assets, you'll have to decide how to distribute those assets across taxable accounts, tax-deferred accounts, and tax-exempt accounts to minimize total taxes. To do this, you'll have to rank the tax efficiency of each asset in the portfolio. Junk bonds, for instance, tend to be the least tax-efficient assets, while tax-exempt municipal bonds tend to be the most tax efficient.

Next, you would put your least tax-efficient assets in your tax-exempt and tax-deferred accounts. And then you would put all remaining assets into taxable accounts.

No. 5: One last note.

If you have your doubts about tax-aware portfolios, consider this: Tax-aware portfolios generate on average 2 percentage points more in returns than portfolios that ignore taxes, say Keebler and Melcher. And that means more for you and less for Uncle Sam.

Deloitte Makes Big Cloud Move With SaaS-based CloudMix

Rob Wright for CRN.com writes: After several years of inching toward the cloud, Deloitte finally is making a big splash in the market.

Last month at DreamForce 2013, Deloitte introduced CloudMix, which ties together disparate enterprise cloud applications into a single preintegrated solution. CloudMix is the first offering from Deloitte's Emerging Technologies practice, which was created earlier this year to focus on new opportunities in emerging tech markets.

"We're a big company and we're focused on traditional consulting and technology services," said Paul Clemmons, principal at Deloitte Consulting and head of its Emerging Technologies practice. "But we have an aggressive strategy to expand into new areas, and we've identified a number of key areas to go after. And cloud is one of them."

CloudMix essentially takes preconfigured enterprise cloud apps and SaaS offerings such as Salesforce and delivers them in a packaged, preintegrated solution; Deloitte also provides on-premise integration with existing legacy software platforms.

"We'll be doing both on-premise and cloud because the reality is, the cloud isn't for everyone. Plus, there is a ton of legacy enterprise software out there," Clemmons said. "But the thinking is, over time, customers will isolate those on-premise systems in the future and move more to the cloud."

Deloitte has explored cloud solutions prior to CloudMix, but this arguably marks the biggest move yet for the consulting giant. Instead of getting into public cloud hosting or Infrastructure-as-a-Service, Deloitte is trying something different that will service the company's customer base especially well.

"The challenge we've seen over the last few years is that enterprise software isn't monolithic, and there are a lot of choices now beyond just SAP (NYSE:SAP) and Oracle (NSDQ:ORCL)," Clemmons said. "It's very complex and confusing, and some software is cloud-enabled and some isn't. It became obvious to us that our clients needed something to help solve that problem."

Virtually all of Deloitte's customers use copious amounts of enterprise software, Clemmons said, and the vast majority of them also are looking to lower costs and reduce complexity through cloud computing. Therefore, CloudMix could kill two birds with one stone, with Deloitte managing the SaaS offerings from afar.

"We take care of it all -- the support, delivery and integration of the cloud software," Clemmons said. "It's a managed services model for SaaS."

CloudMix had been deployed for several customers already, Clemmons said, but the solution is in the early stage of its evolution with about 20 vendor partners currently in the fold. Those vendors include major players like Salesforce, NetSuite (NYSE:N) and Workday, as well as smaller SaaS vendors like Apttus and MuleSoft. "We have formal alliances with a few companies, and we're in the process of vetting a lot of vendors," he said.

In addition to adding more SaaS vendors to CloudMix, Deloitte said it will look to expand the offering with more customized and tailored cloud solutions, as well as business processes and capabilities.

"It's pretty exciting," Clemmons said. "It's a new model for Deloitte, and it's a new model for the market."