Monday, June 23, 2014

Top 12 takeaways for developers at Scaling New Heights 2014

David @ Intuit writes: WOW! What an incredible event. Scaling New Heights 2014 (SNH14) was again life changing for so many attendees, me included. My mind hasn’t stopped racing since, and via some post show conversations, the same is true for many others that attended the event. These pictures from Grant Wickes almost capture the energy of the event.

I’ve attempted to capture the top developer takeaways from the conference. For those of you that were at SNH14 please add your takeaways in the comments below. For those of you that didn’t attend, feel free to chime in too.

In no particular order, here are the ones I think developers need to be the most aware of.

1) It isn’t 1300 accountants attending, its 350k+ small businesses. Scaling New Heights (SNH) attendees are the most influential of the 100k QuickBooks ProAdvisors. Many of them have large practices (100+ clients), and are looked upon as leaders in their own local communities when it comes to their QuickBooks expertise. Many even run Meetup.com QuickBooks groups for other accountants, or provide QuickBooks training to Small Business Owners. I could argue that their sphere of influence reaches 500k small businesses.

2) You didn’t close any sales, and are OK with it. The sales cycle to the accounting community is about 15 months. For example, If you engaged any accountants for the very first time this week, they may put one of their clients on your app this summer/fall as a test. Then from December to April they are heads down working almost forgetting about the client they put on your app. (NOTE: Do not try to talk to them or sell them anything at this time.) Then they go on vacation post 4/16, and before you know it, it is the start of the summer accounting show season.

Fast forward to Scaling New Heights 2015 (SNH15), they see you again, and remember they put a client on your app, they go home and check in with the client. If you are lucky, the client has rave reviews about your app, and it’s QuickBooks integration. Now, in the summer of 2015, they start making plans on rolling your app out to the rest of their clients. So sometime in the fall of 2015, they put many of their clients on your app. Now you finally get to see the ripple effect of your sales efforts.

3) Accountants know more about your app and QuickBooks than you do. If you aren’t already closely working with a few ProAdvisors, you need to be. The better your product solves small businesses problems and integrates with QuickBooks, the more successful your app will be. ProAdvisors can help you in this area. There isn’t much more I can say on this topic, but I do have a few accountants lined up to make future blog posts on topics like: How they view your app card, Why they choose your app, What makes a good QuickBooks integration, Why they sometimes give an app a 2nd chance, and Why a demo is not enough.

4) Accountants like to have fun (even party a bit). Accountants are some of the hardest working people you will ever meet. Many of them hardly take vacations, get away from the office and/or their families. So when they attend events like SNH, they are there for not only certification and training, but they go to connect to some of their best friends in the accounting world. These are the folks that really understand them, and they feel comfortable letting their hair down a bit with them. As a developer you need to understand this, and work to encourage them to relax and enjoy themselves. The last thing they need is for you to be shoving a hard sell down their throats. Just be their friend, and make the event fun for them. Dare i suggest even throwing a party for them?

5) You need to ensure you are speaking the correct language. I can summarize this with one story. InvoiceZoom.com (a new developer to the QuickBooks scene) and I were chatting a bit about them integrating with QuickBooks Online, and getting onto Apps.com. Just one huge problem, their app is for A/P. To illustrate my point, I had three ProAdvisors come over to the table we were sitting at, and I asked them “Does invoice mean A/R or A/P”, all three said “A/R”. Long story short, within the next 24 hours the developer purchased the domain BillZoom.com and is re-branding their entire app. The best part is that they now own two awesome domains.

6) You need to play the game. I am surprised at how many developers just build an app, toss it onto Apps.com, then just hope for success. This is not possible. You need to play the game. You need to be in it to win it. You need to earn each customer one at a time. You need to attend events like SNH, QuickBooks Connect, and the Sleeter Conference. You need to devote time to winning the hearts and minds of the accounting community. You need to provide incredible customer service (it is Software as a SERVICE remember). You need to get your customers to LOVE you and leave you great reviews. You need to get your brand out there, if people don’t know you exist, they won’t find you. You need to make sure you have an identity (What do you stand for?). I have seen a few apps play this game at a high level, and they are now winning, in a game that they weren’t even in a short 15 months ago.

7) If you aren’t SaaS and have Open API, you may not be in this game much longer. Every Small Business is different, and their needs will be met differently. For some, having your app integrate with QuickBooks is the right solution, but for others having another app integrate with your app is the right solution. The apps that are working with other apps via their Open API are starting to rise above the rest of the pack.

Another way to paint this picture. Historically speaking, reporting/dashboard tools have been a mainstay with accountants. In the future not all the data of a small business will live in QuickBooks. If an accountant’s chosen dashboard/reporting tool can’t read data from your app, do you think that accountant is going to put their clients on your app? Probably not.

I would highly recommend taking a look at The Small Business Web Manifesto. I could easily see a future in which the accounting community only chooses apps at live up to said manifesto. The last thing an accountant wants to do to their client, is to get them into a situation in which they can’t work with the data as easily as possible.

8) It is possible to move your company from desktop to SaaS. One of your fellow developers has successfully done this. PaloAlto Software started in 1988 way before SaaS, and way before QuickBooks for that matter. Their latest product LivePlan, is one of the leading SaaS apps on Apps.com. In the near future, I will be having someone from their company do a guest blog about this journey.

9) QuickBooks Online will never have feature parity with QuickBooks Desktop. As an app developer, this is good news. You can fill the gaps. Using QuickBooks Online with a few apps that a business owner needs may actually be better than QuickBooks Desktop for running their business. Lets face it, the way people use QuickBooks is changing.

In the late 2000s an Small Business Owner would buy QuickBooks Desktop from a big box store, set it up for their business, then adjust their business processes around QuickBooks Desktop, possibly working in it 8 to 10 hours a day. So if I had a pet sitting business, I was forcing QuickBooks to be something it wasn’t, and QuickBooks was forcing me to adjust my business to it.

Now using QuickBooks Online with other small business SaaS apps, a small business owner is going to use a specialized industry solution app (e.g. PowerPetSitter) to run their business 8 hours a day, and maybe just pop into QuickBooks Online for an hour or so, to do the accounting things that don’t make sense for the app to do.

It will be the accountants job to match the correct apps with the correct client, it is no longer a one size fits all world.

10) Deep down, we all care about small business. For some of you, you’ve owned a small business in the past, your are currently a small business, or your parents owned a small business. Whatever the reason, we are in this space because we care about it. I did witness two incredible examples of this level of caring while at SNH, both by Apps.com developers.

The first one was ZenCash, they let every attendee get professionally taken head-shots in their booth. Each accountant will get an email with amazing photos that they can use on their business cards, website, and ProAdvisor profile. For many of the accountants, this was probably their first time getting anything like this done before.

The second one was Fundbox, they actually brought a real QuickBooks user’s product, to give away as booth swag. To be honest, it all most made me tear up, sometimes it is easy to get lost in the shuffle of our day jobs building software, it was nice to see the downstream impact on a small business owner’s life from the efforts made by all of us.

I tip my hat to both apps and their teams, it reminded me that what we do is important.

11) QuickBooks Online and Apps.com have some serious momentum. In previous SNH events it was sometimes difficult to chat with an accountant that had actual clients on QuickBooks Online (QBO), but now I think every accountant I spoke with has a few clients on QBO. I even spoke with a handful that have 100% of their clients on QBO. In regards to Apps.com we pushed 6 apps LIVE in the last 10 days leading up to SNH14, and now have 70 apps that connect to QuickBooks Online.

12) The team and I are extremely thankful for all of you. Hopefully, at least once, during the craziness of the expo floor, the IPP town hall, our developer reception, or at a party, someone from the IPP team gave you a big hug. I feel like I missed so many of you. So, for those of you I missed, I am sending you a virtual hug, and saying thanks for being apart of #TeamIntuitApps.
Posted on 3:24 PM | Categories:

Bitcoin Reportability And Taxation

Kevin Bergesen for Holland & Knight writes:  June 30 is the deadline for taxpayers with a connection to foreign financial accounts to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR).  As this is the first year in which all FBARs must be electronically filed, the IRS, which conducted a webinar on June 4, spent a great deal of time discussing the e-filing requirements. (Please see  PowerPoint presentation.)

During the webinar, Rod Lundquist, a senior program analyst for the Small Business/Self-Employed Division at the IRS, indicated that bitcoin do not need to be reported on the FBAR.  Lundquist was quoted by Bloomberg BNA as saying, "At this time, FinCEN has said bitcoin is not reportable on the FBAR, at least for this filing season."
While this is likely welcome news for taxpayers who own bitcoin, the IRS also recently provided taxpayers with much needed clarification as to their taxability. On March 25, 2014, in Notice 2014-21 (the "Notice"), the IRS released guidance explaining that bitcoin would be treated as "property" and not as "currency" for federal income tax purposes. The notice clarifies that taxpayers must maintain records of their basis in bitcoin at the time of acquisition and must track and report any gains realized upon the sale or other disposition of bitcoin as taxable income.

What is bitcoin?

To the extent it can be defined simply, bitcoin is a form of currency that exists in a limited supply and can be stored digitally and transferred directly to any other computer (or compatible phone, tablet, etc.) without passing through a centralized financial institution. Bitcoin is not backed by any centralized bank or any physical commodity.
The Notice describes bitcoin as "[a] digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value." Because bitcoin has a monetary value in "real" currency, and can act as a substitute for "real" currency, bitcoin is further classified as "convertible" virtual currency.

Bitcoin is Not Currency

The Notice clearly states that for U.S. federal income tax purposes, the IRS will not treat bitcoin as currency, but rather as property, and will apply existing tax principles to determine the timing and character of income, gain, or loss, in the same manner as these principles are applied to the sale or exchange of securities or other property.
This means that gains and losses on the disposition of bitcoin will not be treated as "exchange gain or loss" and will not be ordinary in character. This is bad news for investors who hold depreciated bitcoin and were hoping to take exchange losses as ordinary losses, but is good news for investors who hold appreciated bitcoin and hope to take advantage of capital gains treatment.
For those individuals holding bitcoin for sale in a regular trade or business ("miners" and "dealers"), income resulting from the sale of such bitcoin will be taxed as ordinary income. However, for most investors who merely "trade" in Bitcoin, gains or losses will be capital and not ordinary.

Increased Burdens on Taxpayers

The Notice states that taxpayers who invest in bitcoin are obligated to report capital gains or losses upon the sale or other disposition of these assets. The burden on the taxpayer is twofold: he or she must (i) maintain a record of his or her basis in the bitcoin, and (ii) determine the fair market value of the bitcoin at the time they seek to sell or otherwise dispose of it.
The second prong is reasonably straightforward. The amount realized at the time of disposition is equal to the U.S. dollar value of the assets received in exchange for the bitcoin. The fair market value must be determined by reference to the bitcoin/U.S. Dollar price quoted in an online exchange. Unfortunately, there is no official exchange, and considerable inconsistency exists among exchanges. The Notice provides little guidance except to state that the bitcoin to U.S. dollar conversion must be made "in a reasonable manner that is consistently applied."

The first prong is far murkier and will likely cause headaches for the average person seeking only to hold bitcoin as an investment or use bitcoin to pay for goods or services. If a taxpayer does not maintain separate accounts (known as virtual wallets) for each of his or her bitcoin having a different basis, it will be difficult to properly identify basis upon a partial disposition from the virtual wallet. The IRS would likely respect "First In First Out" or a similar methodology, but has not yet provided any guidance on this issue. Until a universal methodology is adopted, taxpayers with mixed-basis virtual wallets should maintain detailed basis records in order to defend against any accusations that they are committing fraud by shifting basis within a virtual wallet or deceitfully selecting high-basis currency for sale.

Penalties for Noncompliance?

The tax treatment described in the Notice has full retroactive effect, and thus penalties may be due for those taxpayers who have taken positions inconsistent with the Notice on their previously filed returns, including underpayments attributable to bitcoin or failure to timely or correctly report bitcoin transactions. Further, the IRS has given no indication that it will show any leniency and has cited that the generally applied reasonable cause standard should apply to any taxpayers seeking abatement of penalties. Taxpayers who sold bitcoin in recent years should amend these returns if bitcoin income was not properly disclosed.

Legislative Response

In response to the Notice, Texas Congressman Steve Stockman proposed H.R. 4602, The Virtual Currency Tax Reform Act, aimed at authorizing the IRS to treat virtual currencies as currency rather than property. Because current law allows U.S. taxpayers to ignore de-minimus gains and losses in foreign currencies, this treatment would eliminate the basis-tracking and reporting burdens for the vast majority of bitcoin investors.
Posted on 8:06 AM | Categories:

BoxFreeIT (Au) : Is Intuit’s acquisition of Invitbox a game changer?

Lisa Callaghan, CEO of Interactive Accounting for BoxFreeIT writes: Intuit announced on May 14 that it had bought the cloud-based accounts payable processing tool Invitbox. Invitbox’s huge advantage over similar tools like ReceiptBank and Shoeboxed is that it imports into Xero an accounts payable invoice with line by line details.

For any business that needs to separate an invoice into different account codes, this tool is a dream that can save hundreds of hours a year in bookkeeping. The future of accounting software is paperless, bookkeeping-free accounting software that will utilise APIs (programming interfaces), rules and two-way integration with banks to do all the heavy lifting.

Invitbox inputting line items to Xero
Invitbox inputting line items to Xero

It’s such an exciting time if you’re a small business owner or a geek accountant like myself. The emergence of Xero several years ago ignited a revolution in small business accounting and the relationship with your advisor. MYOB was left red-faced when Xero entered the market and in just a few years showed how MYOB had failed to really innovate with its cloud offering MYOB Live.
Today small business is spoilt for choice as Intuit, Reckon, Saasu, MYOB and Freshbooks all compete in the market space. For the last three years Interactive Accounting has been a 100 percent Xero-based accounting firm as we believe it’s the best cloud accounting solution on the market.

That’s why buying Invitbox is a game-changer. If Intuit integrate Invitbox within its product its going to make Xero’s release of Xero Files look second rate. If your accounts payable invoices magically and automatically imported with every detail and correctly coded into your accounting software – would that not be life-changing? Hell YES!

Xero’s CEO Rod Drury’s reaction on Twitter to the news last week got my attention. Sometimes it’s hard to read tone with tweets but this one had me wanting to ask Rod, “Is that a hint of jealousy I detect?”
Rod Drury Receipt Bank Invitbox Tweet
Roger Gregg, CEO of Invitbox, and his team have been great friends of ours at Interactive Accounting. We even had a joint staff Christmas party with us last year at Paddington Bowling Club. I have a huge amount of respect for the work Roger and his team have achieved in just over two years.

It’s a testament to their innovation that won them last year’s Xero Emerging Add-on award and caught the eye of a big US-based software company like Intuit. That’s impressive, well done!
I understand that at present Invitbox will continue to have an open API and still integrate with Xero. Any business who wants to show line by line items on their bills in Xero should definitely use this product and sign up for a trial.

But the real winners here are small business owners and accountants. I look forward to sitting here on the sidelines, having a front row seat to watch these cloud accounting products hit it out on the playing field as they compete for your business through innovation.
I’m a long standing advocate of Xero but the delayed release of promised core features like Quotes, Report Packs, Payroll/General Ledger integration feels like its development has stalled. Perhaps this is just prognostic of its rapid growth and US focus. Nonetheless it’s allowing the others to catch up in Australia. Interactive Accounting is committed to promote and support only the best cloud accounting software on the market.

With Intuit’s acquisition I can see that one day in the not too distant future we will support additional online accounting programs.

Ladies and gentlemen, we just got a giant leap closer to the future of accounting where transaction details automatically and seamlessly flow in and out of our accounting software requiring very little manual input. Simple, easy and accurate.

This article was written by Lisa Callaghan, CEO of Interactive Accounting, a Gold Xero partner.

BoxFreeIT is an independent news site covering cloud software for Australian and New Zealand businesses which launched in July 2011. The site is published by Sholto Macpherson, a business technology journalist in online and print media for over 11 years. BoxFreeIT operates in accordance with the MEAA (Australian Journalists Association) Code of Ethics.

The only Australasian site dedicated to cloud software, BoxFreeIT attracts 12,000 unique visitors a month and is adding 2,000 visitors a month. A total 65,000 unique visitors have visited BoxFreeIT in 2012.   The site has built up a strong following of accountants and bookkepeers exploring cloud accounting programs such as MYOB Live Accounts and Account Right Live, Xero, Saasu and Intuit QuickBooks Online, as well as SMEs interested in cloud software.

Posted on 8:05 AM | Categories:

Constant Contact & Xero (Click to View)

Xero writes: With Xero’s online accounting software in the cloud and Constant Contact’s marketing know-how — your valued customer data now becomes a powerful marketing tool. Start with your existing customer sales information and resource Xero’s Smart Lists feature to assemble a tailored contact list using a variety of filters. For example, use Smart Lists to compile a list specific to seasonal sales, geographic location, items purchased, price range or other variable. And now that Constant Contact is integrated with Xero, you simply take your Smart List to create and launch targeted email marketing campaigns, announcements and promotions. Xero and Constant Contact put you in control of your marketing efforts — and offer an easy, seamless and smart way to reach key audiences and grow your business.
Posted on 8:03 AM | Categories: