For this startup, dominance of Japan’s $3.7 trillion personal finance market is not enough / Japanese cloud accounting platform Money Forward

•  J.T. Quigley for TechInAsia.com writes: 

Are people obsessed with money? No. People are obsessed with disposable income. Disposable income is the cash in your pocket after all legally required payments for things like taxes and pension have been deducted from your salary. Disposable income gets you dinner and drinks with friends, extra savings in your bank account, a new TV… or even a chance to re-create the hedonism of The Wolf of Wall Street in the comforts of your own home. With so many options, it is no wonder that planning how to use disposable income is a national pastime the world over. Money Forward founder and CEO, Yosuke Tsuji, created his company to make the process as easy as possible. Judging by the company’s strong user growth – rapidly approaching one million user accounts – he’s on his way to succeeding. 

Capturing market share 

Established in December 2012, Money Forward entered a growing market. According to OECD figures, Japan’s national disposable income was on an upswing, hitting US$3.7 trillion in 2012. The company seeks to become a one-stop shop for any individual wishing to track and plan their finances. It does this by creating partnerships with approximately 1,400 financial institutions in Japan. Users can then link their financial accounts (banks, credit cards, securities, Coiney, etc.) to their Money Forward account and see the full glory, or sobering reality, of their financial health. Once the user’s financial accounts are linked, any changes to their savings or securities will be pushed to Money Forward where they can be fully analyzed. 

Data analysis is another area where Money Forward creates value. As Tsuji explains, “You can simulate your data from the past six months into the next three years… the customers can see the best card from their data.” 

Command one market, conquer the next 

The service provides near total-coverage for all financial institutions in Japan. With 1,400 out of 1,585 financial institutions in the Money Forward fold, even users who have never stepped foot inside of a mega-bank can enjoy top-class service and benefits. The message certainly seems to have gotten out, as the company’s free app for Android was rated the number one finance app for 2013 by Google Play. iOS users are also flocking to the service on iPhone and iPad. In total, Money Forward expects to announce the acquisition of its one millionth user this summer. Tsuji asserted that this milestone will cement the company’s top position in Japan as measured by user accounts. 

Despite the company’s success as a personal finance management system, it also started offering enterprise services in January 2014. It currently offers a cloud accounting service covering tax accounting. Tsuji’s rationale for this strategy is that traditional face-to-face accounting services are destined to be digitized. He noted that, “Microsoft Outlook was replaced by Gmail and local servers were replaced by Amazon Web Server database, so accounting services, accounting systems will be replaced by a cloud system.” Tsuji’s aim is high – to turn Money Forward into the number one cloud service for business. Though the functionality is currently limited to just accounting, additional enterprise-focused services for invoices, salary payment, and expense reports are expected to be released in the coming months. 

The new services dovetail perfectly Tsuji’s ultimate goal. He says, “I want to make the world [without] manual input. Just connect everything.” Competition in this market is fierce and its burgeoning rival Freee is making strong inroads as well. Seeing if Money Forward has the ability to replicate its success in its intended enterprise expansion bears watching as 2014 progresses.

How Do I Know if I Should Amend My Tax Return?

Philip Taylor for TurboTax writes: Have you ever began clearing the clutter after you filed your taxes and found a 1099 or W-2 for that side job you did for a short time. Or maybe you received a K-1 after the tax deadline which is a common occurrence.

Whether you forgot, transposed numbers, or you received essential paperwork after you filed, you can still amend your tax return, but here are some things you need to know about whether you should amend or not.

You don’t need to amend if you:

• E-filed your tax return and it was rejected.  You can simply go into your tax return and add the missing info and resubmit it.
• Made a small math error.  The IRS will correct small math errors, however using tax software prevents math errors.
• Forgot to attach forms and schedules.  The IRS will request them.

You can amend your tax return if:

• Your tax return was already accepted by the IRS.  Don’t amend your tax return unless it has been accepted by the IRS.
• There is a change in filing status, income, dependents, credits, or deductions.
• You are expecting a tax credit or refund.  You have to amend within 3 years, after the date you filed your original tax return or within 2 years after the date you paid the tax whichever is later.

Legally married same-sex couples may also want to consider amending the last 3 years tax returns as a married couple as a result of the DOMA ruling if you are expecting a tax refund for those years.  TurboTax has an online tool to help you figure out if it’s beneficial for same-sex couples to amend prior year’s tax returns.

Amending Basics

Although you can fill out an amended tax return with tax software, you cannot e-file an amended return. An amended tax return must be physically mailed to the IRS.

There is a limited amount of time that you have to file your amended tax return. You need to file your amended tax return, within 2 years from the date of which you paid your tax or within 3 years from the date of which you filed your original tax return which is now being amended.

Deductions and Credits

If there are any tax deductions or credits that you didn’t realize you qualified for, you can reclaim these tax benefits by submitting an amended tax return.

The same is also true if you have mistakenly applied credits and/or deductions that you haven’t qualified for. No matter whether you’ll get more or pay more, these oversights should be corrected with an amended tax return.

Dependents and Filing Status

The last two areas that may necessitate an amended return to the IRS are the dependents that you’ve claimed (or failed to claim), and your filing status.

As for dependents, the situation is similar to that of the tax deductions and credits oversight. If you’ve missed claiming a dependent on your original tax return or if you mistakenly claimed an unqualified dependent, you need to file an amended return to correct your tax return.

As for filing status, the IRS will allow a status switch from married-filing separate to jointly, however switching from married-filing jointly to married-filing separately is not allowed once the tax due date has passed.

Individuals are, however, given the freedom to change their filing status from widow/widower to head of household, if their situation fits the criteria.

Retroactive Tax Planning After Windsor

Brian P. LeBlanc, CPA, MBA, and Christine P. Andrews for the AICPA write: Retroactive Tax Planning After Windsor 

EXECUTIVE SUMMARY

Married same-sex couples must now file their federal income tax returns as either married filing jointly or separately, but they have a choice whether to amend their federal income tax returns for open years during which they were legally married. The tax return calculations have many variables, such as the allowance of certain credits, such as the adoption credit, which is now not permitted for same-sex married persons who adopt their spouse's biological child.        The article has specific examples of a same-sex couple and the different amounts of tax they would pay depending on whether they amend their prior-year returns. A tax return engagement usually does not begin with the question, "Should this couple amend prior-year returns?" But the Supreme Court's holding that Section 3 of the Defense of Marriage Act (DOMA)1 was unconstitutional triggers just this question for same-sex married couples. DOMA, which was enacted on Sept. 21, 1996, defined the word "marriage" as a legal union between one man and one woman as husband and wife. DOMA further defined the word "spouse" as a person of the opposite sex who is a husband or a wife. This legislation in effect barred federal recognition of same-sex marriages for all purposes, including Social Security survivors' benefits, insurance benefits, immigration, and income tax filing. [snip]   The article continues at the AICPA.org, click here to continue reading.

“Know when to do it yourself and when to get someone else to do it for you” — Interview with Peter Karpas, CEO of North America, Xero

 Interview with Peter Karpas, CEO of North America, Xero

San Francisco Small Business Week writes: 

What role does your organization play in supporting small businesses?  

         

At Xero we make beautifully-designed online financial accounting tools.  We make it easy for business owners to stay on top of their finances no matter where they are, and to get quick, real-time insights to make smarter business decisions. In my role here as CEO, I talk to a lot of business owners and it’s very clear that none of them have gone into business because they want to do accounting or follow up on unpaid bills. I’ve heard time and time again how busy they are and as a result their finances slip through the cracks — they lose checks or quite simply forget to bill or follow up on an overdue payment. And when they do get paid, they often don’t have real-time insight into their cash flow to know if they’re going to have enough funds in the bank to buy extra inventory or hire a new employee. These are the important problems that Xero solves for small businesses.

Running a successful small business is hard work. What are some of the key challenges that face small business owners today? 

            

The two biggest challenges are getting customers and getting cash flow. But what really stops a small business from growing is cash flow — that’s why it’s so important. As a small business it’s hard to get loans, but if you have a healthy cash flow you can spend money on marketing, hire people, get more inventory, etc. — any of the things people can do to make their business thrive.

What is the best piece of small business advice you would like to share with our audience? 

The biggest single piece of advice I’d give small businesses is to know when to do it yourself, know when to do it with assistance, and know when to get someone else to do it for you. Many small business owners I talk to want to do it themselves. They think they are saving money by not hiring a bookkeeper or accountant. So they spend their weekends doing accounting when they could be growing their business or spending quality time with their family. Then there are other things that they should do themselves but they outsource them instead. So think hard and make thoughtful choices about what you do or do not do. But always keep in mind, the more you do yourself, the less able you are to scale.

What is the next big thing that will shape small business?     

The rise of cloud and mobile is transforming small businesses today. To simply be able to access your information and data from anywhere on any device. And we’re still in the infancy of the impact that these tools have on society and small businesses. As smartphone penetration and internet bandwidth increases, cloud and mobile tools like Xero get more robust. So now you see even non-tech oriented businesses such as brick and mortar stores giving salespeople tablets so they can provide better customer service by walking around with customers and ringing up orders in the middle of the store. This data is then immediately synced with the store’s point of sale system, and with the power of the cloud it is seamlessly transferred to the accounting solution. There’s no more waiting until the end of the day to account for that day’s sales. It’s happening in real-time and immediately going to all the right places without having to waste time manually re-entering data at the end of a busy day or week.

San Francisco is a hotbed of entrepreneurial activity. Can you share one brief story about how your company is helping San Francisco businesses to thrive?

As more startups, artisanal, and established businesses in San Francisco turn to mobile and the cloud, Xero is helping them take full advantage of these tools to save time and better run their businesses. We serve a variety of businesses here in San Francisco including specialty boutiques, creative agencies, cafes, tech startups, non-profits and restaurants. I believe helping these kinds of businesses succeed helps keep San Francisco’s unique flavor and culture alive.  You can read and watch videos of the types of businesses we help at: http://www.xero.com/us/customers/.