Big Battle in the Cloud Accounting Market? No, It’s Still a New Frontier

Isaac M.O'Bannon for CPA Practice Advisor writes: There has been a lot of activity in the online accounting market over the past few years and, according to some vendors, there is a big battle being waged for the minds (and wallets) of small businesses.

While there is certainly a battle, how big is it really? Looking at the really big picture, cloud accounting vendors are actually still on the edge of a vast frontier. After all, there are more than 11.5 million small businesses 1-20 in the United States, according to the latest available Census Bureau statistics. If you include “non-employer” businesses, generally independent contractors, that number rises to about 32.8 million.

Now, when you look at the number of users that the primary developers of online small business accounting software report, you can see that they’ve barely tapped this potential market. Even the definitive leader in the space, the proverbial giant Intuit, has only about 575,000 businesses (with an average of approximately three users each) using its QuickBooks Online system.

Current Online Accounting Users (paying):

• Intuit QuickBooks Online: 1.75 million
• Xero: 250,000
• Kashoo: 150,000
• Less Accounting: 100,000

(Note: The numbers above represent users, not individual businesses. Many business entities using a program have multiple users. Also, cloud accounting makers FreshBooks and Wave report 5M and 1.5M users, respectively. However, since they do not disclose what percentage of these are paid users versus free or dormant accounts, the numbers cannot be accurately positioned against these other vendors, who provided the paid user numbers above.)   -SNIP-

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DBSync Now Supports the “New QuickBooks Online”

DBSync, a leading provider of cloud replication and integration services, is pleased to announce that DBSync software now supports the new QuickBooks Online. This update to the DBSync platform is designed to allow a seamless integration between client’s CRMs (Salesforce, Microsoft Dynamics CRM), eCommerce and databases with QuickBooks Online.
QuickBooks Online is moving to a new platform and new API for all QuickBooks Online customers. Keeping in view this update, DBSync also has upgraded the adapter for the new QuickBooks online.

This software update benefits both existing and potential DBSync users:
-Current DBSync users will find a seamless transition when they migrate to the new API.
-Prospective customers will not have to write in-house connectors since DBSync provides a ready-made solution. This manifests itself as significant cost savings during mandated API migrations. 

• Improved increase of speed of communication with the

“DBSync is committed to help clients do better business seamlessly with continuous enhancements and upgrades aligned to industry trends,” says Rajeev Gupta, CEO of DBSync. “As an industry leader, we take these developments very seriously.”
DBSync features and benefits: 

•     Avoid double entry and manual coding
•     Increase information-sharing between applications
•     Reduce accounts receivable and days outstanding
•     Provide sales and customer service representatives with key information, including        customer sales history and up-to-date product data
•     Easily integrate CRM, eCommerce and databases

Supported QuickBooks editions include QuickBooks Online, QuickBooks Pro, Premier, Enterprise versions.

Find us at -

Intuit Marketplace : http://marketplace.intuit.com/AppID-3305-Overview.aspx

Salesforce AppExchange : https://appexchange.salesforce.com/listingDetail?listingId=a0N300000016bTHEAY

Microsoft Pinpoint: http://pinpoint.microsoft.com/en-us/applications/dbsync-for-ms-crm-integration-quickbooks-intacct-and-more-12884927428


Read more: http://www.digitaljournal.com/pr/1777339#ixzz2vE3m6A9s

Ten Facts about Capital Gains and Losses

When you sell a ’capital asset,’ the sale usually results in a capital gain or loss. A ‘capital asset’ includes most property you own and use for personal or investment purposes. Here are 10 facts from the IRS on capital gains and losses:

1. Capital assets include property such as your home or car. They also include investment property such as stocks and bonds.

2. A capital gain or loss is the difference between your basis and the amount you get when you sell an asset. Your basis is usually what you paid for the asset.

3. You must include all capital gains in your income. Beginning in 2013, you may be subject to the Net Investment Income Tax. The NIIT applies at a rate of 3.8% to certain net investment income of individuals, estates, and trusts that have income above statutory threshold amounts. For details see IRS.gov/aca.

4. You can deduct capital losses on the sale of investment property. Youcan’t deduct losses on the sale of personal-use property.

5. Capital gains and losses are either long-term or short-term, depending on how long you held the property. If you held the property for more than one year, your gain or loss is long-term. If you held it one year or less, the gain or loss is short-term.

6. If your long-term gains are more than your long-term losses, the difference between the two is a net long-term capital gain. If your net long-term capital gain is more than your net short-term capital loss, you have a 'net capital gain.’ 

7. The tax rates that apply to net capital gains will usually depend on your income. For lower-income individuals, the rate may be zero percent on some or all of their net capital gains. In 2013, the maximum net capital gain tax rate increased from 15 to 20 percent. A 25 or 28 percent tax rate can also apply to special types of net capital gains.  

8. If your capital losses are more than your capital gains, you can deduct the difference as a loss on your tax return. This loss is limited to $3,000 per year, or $1,500 if you are married and file a separate return.

9. If your total net capital loss is more than the limit you can deduct, you can carry over the losses you are not able to deduct to next year’s tax return. You will treat those losses as if they happened that year.

10. You must file Form 8949, Sales and Other Dispositions of Capital Assets, with your federal tax return to report your gains and losses. You also need to file Schedule D, Capital Gains and Losses with your return.

For more information about this topic, see the Schedule D instructions andPublication 550, Investment Income and Expenses. They’re both available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources:

• 1040 Central
• IRS Tax Map
• Tax Topic 409 - Capital Gains and Losses
• Publication 544, Sales and Other Dispositions of Assets
• Questions and Answers on the Net Investment Income Tax

IRS Issues 2014 Inflation-Adjusted Vehicle Depreciation Dollar Limits

Rev. Proc. 2014-21  The IRS has released the inflation-adjusted limitations on depreciation deductions for business-use passenger automobiles, light trucks, and vans first placed in service during calendar year 2014. The depreciation limits for passenger vehicles are identical to the limits for 2013 (apart from the first year limit, which no longer includes first-year bonus depreciation). The depreciation limits on trucks and vans have increased by $100 for of the first three years.

ExactCPA Take Away.Congress has not extended bonus depreciation to the 2014 tax year in the case of passenger vehicles. This means that although several of the limits have been adjusted upward for inflation, the total amount a taxpayer may deduct for a vehicle placed in service during 2014 is effectively $8,000 lower than for a vehicle placed in service during 2013, unless Congress provides retroactive relief this year.

Background

Code Sec. 280F(a) imposes dollar limitations on the depreciation deduction for the year the taxpayer places the vehicle in service in its business, and for each succeeding year. Under Code Sec. 280F(d)(7), the IRS adjusts for inflation the amounts allowable for depreciation deductions. In Rev. Proc. 2014-21, the IRS has provided depreciation limits for passenger automobiles, light trucks and vans.

Passenger automobiles

The maximum depreciation limits under Code Sec. 280F for passenger automobiles first placed in service during the 2014 calendar year are:

• $3,160 for the first tax year;
• $5,100 for the second tax year;
• $3,050 for the third tax year; and
• $1,875 for each succeeding tax year.

Trucks and vans

The maximum depreciation limits under Code Sec. 280F for trucks and vans first placed in service during the 2014 calendar year are:

• $3,460 for the first tax year;
• $5,500 for the second tax year;
• $3,350 for the third tax year; and
• $1,975 for each succeeding tax year.

Comment

Sport Utility Vehicles (SUVs) and pickup trucks with a gross vehicle weight rating (GVWR) in excess of 6,000 pounds continue to be exempt from the luxury vehicle depreciation caps based on a loophole in the operative definition. Congress in 2004 placed a $25,000 limit on Code Sec. 179 expensing of heavy SUVs but has not extended it to Code Sec. 280F.

Leases

Lease payments for vehicles used for business or investment purposes are deductible in proportion to the vehicles business use. However, lessees must include a certain amount in income during the year that the vehicle is leased, to partially offset the amounts by the lease payments exceed the luxury automobile limits.Rev. Proc. 2014-21 includes tables that identify the income inclusion amounts for passenger automobiles, trucks and vans with lease terms that begin in calendar year 2014.

References: FED ¶46,274; TRC DEPR: 3,504.05.

UK: New KashFlow Products Simplify Online Accounting and Payroll for Small Businesses

UK accountancy and payroll software leader IRIS is today launching the new version of its cloud-based accounting software, KashFlow. The product is now available in three editions to meet the unique business needs of companies of different sizes, priced to be within range of even the smallest organisation.

It features a major upgrade to its look, feel and revolutionary responsive design that automatically optimises the application for the device through which it is being viewed - whether that's a mobile phone, tablet, laptop or desktop computer.  What's more, the latest version of the pioneering UK online bookkeeping application integrates seamlessly with the new KashFlow Payroll, also being launched today, enabling small business owners to completely control their finances.

Work effortlessly with your accountancy partner

KashFlow enables small businesses to focus on their day-to-day priorities by removing the complexity associated with accounting and payroll. At a glance, it provides information about business performance without the need for advanced financial expertise. But when that expertise is needed, KashFlow customers can now work effortlessly with their accountancy provider, as KashFlow is now integrated with the IRIS Accountancy Suite, used by 50 per cent of UK accountancy firms, to prepare tax and accounts for their SME clients.

Intuitive responsive user interface design

Due to its revolutionary new responsive design and user interface, users can now access KashFlow from any Internet-enabled device, such as a smartphone, tablet, laptop or desktop PC; the application will dynamically optimise itself for the device in use. The new design avoids time wasted downloading and regularly updating mobile apps. Business owners can now work where, when and how they like.

Available in three editions

Each of the new editions can be trialled for free and each enables easy creation, customisation and editing of invoices; raising of quotes, estimates and pro-forma invoices; automation of reoccurring purchases; management of customers and suppliers; and a wide range of reporting, banking, credit control and accounting capabilities.

There are three simple pricing options available ensuring sole traders never need pay for more than necessary, while larger employers have access to all they require. The 'Starter'edition offers value for money for freelancers, contractors and low-transaction businesses at £5 a month whilst the 'Business' edition is ideal for growing organisations and limited companies. At £10 per month it supports multiple users, unlimited multi-currency invoices and bank transactions. 'Business + Payroll' edition is only £15 a month, and includes all the benefits of the 'Business' edition plus the newly integrated KashFlow Payroll product for up to five employees.

Introducing KashFlow Payroll

The 'Business + Payroll' edition includes the new KashFlow Payroll suite, a fully integrated online payroll solution that shares information seamlessly with KashFlow at the touch of a button. This saves users time while improving accuracy and removing the duplication of effort associated with running separate bookkeeping and payroll systems. It also provides support for the latest legislative changes such as Real Time Information (RTI), removing the headache of reporting to HMRC and other UK legislative bodies.

Liz Sleightholm of ITG Instructor Training Limited says, "KashFlow makes accessing your accounts from anywhere far more straightforward - emailing professional looking invoices and remittances is simple. I have worked as a company accountant for many years for large organisations and have used numerous accounting systems and KashFlow is ideal for small and medium-sized businesses, it is also great for those without much accounting experience."

Phill Robinson, IRIS CEO says, "Small businesses have enough to contend with on a day-to-day basis without having the additional worries of UK government legislation or struggling to keep their accountants updated regularly. Our new version of KashFlow will help small businesses focus their time and energy on what they do best rather than wrestling with accounts, payroll and dealing with the tax man.

"We are passionate about making the flow of information between businesses, accountants and government as easy and efficient as possible. We know that online solutions are perfect for this, with over 93,000 users already subscribing to our cloud-based applications. Our new KashFlow editions, and KashFlow Payroll ensure small business owners can benefit just as easily and effectively as larger firms."

More details, including sign up for a free 14 day are available at http://www.kashflow.com

QuickBooks Online Twice the Size of Xero – and Adding 45,000 Businesses a Quarter

Aimy Chen for BoxFreeIT writes: Intuit has revealed for the first time the number of customers using its cloud accounting program Quickbooks Online. The program added 45,000 paying customers in the last quarter which brought the total to 561,000 paying businesses globally, Forbes reported.

Intuit rival Xero had less than half the number of customers at 250,000, of which 100,000 were Australian businesses.

Although Intuit has sold Quickbooks Online for more than 10 years it hasn’t received as much attention as its desktop programs. But the company recently refocused its accounting software business around the potential of its cloud program. Intuit dominated the US market for small business accounting software and had amassed a customer base of 5 million businesses with a broad range of financial products and services.

Xero recently raised $180 million from prominent investors to launch an assault on the US market where it is estimated to have less than 50,000 customers. The company was hiring senior executives in preparation for a listing on the US stock markets to add to its New Zealand and Australian public listings.

Visit BoxFree IT to comment by clicking here.

1. Margaret Carey says:

   March 6, 2014 at 2:10 pm

   Interesting numbers, however what Intuit doesn’t reveal is how many of those 45,000 customers are conversions from the desktop version as opposed to totally new to accounting software or conversion from another product. Are they robbing Peter to pay Paul? We know every Xero customer is a brand new one to Xero. Also not revealed is how many of those 45,000 are US-based versus the rest of the world. Intuit has a large share of the SMB market in the US so has brand awareness there. I would love to know the number of paying QBO customers in Australia – this is a closely guarded secret – need a Wikileak to expose.

   Reply
   • Sholto Macpherson says:

     March 6, 2014 at 4:04 pm

     Good comments, Margaret. I’m not sure whether it matters if they’re new to Intuit though. I imagine (no data to prove) that it would be easier to churn businesses from desktop accounting software or Excel to a cloud accounting app than from one cloud accounting app to another. The step up is huge from desktop, less so between clouds.

     Re: Wikileaks, I’ll see whether Mr Assange will oblige.

     Reply
   • Mike Block CPA says:

     March 6, 2014 at 9:29 pm

     Insiders previously said that QuickBooks desktop lost more than 800,000 users. That means QuickBooks Online cannibalized about half the desktop losses. That is a disaster for Intuit, since Xero is still growing more than twice as fast as QBO in percentage terms. QBO and QB desktop now have less than 10% of the small / medium desktop and online accounting program market, counting companies like Yodlee (a Xero partner). Intuit also has bought back more than a billion dollars a year in mainly insider stock for more than four years. Buy-backs exceeded adjusted lifetime earnings after a $320 million Digital Insight loss and accelerated buy-backs may exceed its net worth. The big difference: Xero stock is up 5500% (yes 55 times), while Intuit is up 200%.

     Reply
2. Mike Porter says:

   March 6, 2014 at 2:57 pm

   Or another take, Xero and Quickbooks are now adding customers at a near identical rate (though Xero’s growth rate is accelerating faster and should overtake Quickbooks additions shortly) . This despite Xero operating predominantly in much smaller markets and with about 10% of Intuits employee base, as it notes, it’s significantly more efficient at customer acquisition. If you were putting odds on the outcome, i think the bookies are calling the odds via Xero’s share price. It’s the leading favourite. Intuit’s share price has also gone well, as there’s a new rick vein to be tapped by both companies of recurring SaaS revenue. Win win for both companies, they’ll both do well. Win win for the accountants via competitive product development. and Win win for the users as it’s transforming the SME technology experience.

   Reply
   • Sholto Macpherson says:

     March 6, 2014 at 4:05 pm

     Well said, Mike. Everyone loves a win, win. How many accounting companies can win though? Two? Three? Four? More? Last count we’re up to about seven in Australia.

     Reply
   • Richard McLean says:

     March 6, 2014 at 7:12 pm

     Mike – not sure this statement is correct these days …..it’s significantly more efficient at customer acquisition.” I think it may well have been but the Xero business has had significant cost growth and the cost of people to sales is pretty horrid –http://www.asx.com.au/asxpdf/20140131/pdf/42mfhbzd78ntb9.pdf

     I am sure that many are betting on the share price and it has been a huge performer but will this last….

     I think the continued comparison of Xero and Intuit is unhealthy for the market and from where I sit all the “noise” is coming from Xero supporter… I think an open mind and sensible competition should replace all of this noise so we can all concentrate on getting on with it…

     I do agree with Mike – well done to Intuit and Xero for continuing to invest in the great market.

nChannel Releases SAGE Connector, Helps Sync with eBay

nChannel released its Sage Connector to help retailers, manufacturers, distributors more easily manage their data between Sage 100 and eCommerce, online marketplaces (eBay/Amazon), POS, etc.

nChannel, creator of the cloud-based Multi-Channel Operations Management platform, announced the release of its Sage Connector to help retailers, manufacturers and distributors more easily manage their data between Sage 100 and eCommerce, online marketplaces, point-of-sale, and other business systems.

As commerce continues to shift to the web, the Sage connector will enable companies to manage and streamline data processing, improve productivity, and reduce the cost of operating multiple sales channels while still providing a consistent customer shopping experience. nChannel’s Sage connector provides the Sage 100 ecosystem (formerly known as MAS90/200) with a conduit to the nChannel Any Channel Operations Management (nCOM) platform, where users can merchandise items, process orders, manage inventory, collect customer data, execute accounting and purchasing activity, and analyze real-time sales data all from a single point of access. 

“Selling through multiple channels creates welcomed growth, but with it also comes unwelcome costs and challenges,” explained Steve Weber, President & CEO of nChannel. “Sage users who use nCOM to connect Sage to their sales channels get much more than a data integration tool. nCOM’s management capabilities allow them to increase revenue by properly merchandising more products in more places while realizing significant and immediate operational efficiencies.”

nChannel’s nCOM with Sage Connector capabilities include:

-Merging item data from Sage, spreadsheets, and image files to publish complete, searchable item information on the web
-Support for standard, kit, and serialized item types
-Mapping to eBay and Amazon-specific categories
-Web order integration via work order or sales transaction
-Order fulfillment
-Creating new customers, updating existing customer records, or consolidating customer ship-to’s under a single Sage customer
-Inventory synchronization in real-time
-Integration to drop ship suppliers

Other nCOM connectors in the nChannel library include Magento; Shopify; AspDotNetStorefront; Amazon; eBay; Microsoft Dynamics RMS, GP, NAV and SL; OpSuite and QuickBooks. nChannel continually develops Connectors based on customer demand.