Xero : Cloud control a lesson in flying / CLOUD operators need to show investors the money

Richard Hemming for The Australian writes: .....(excerpt)...The cloud is lucrative because it means small and medium-sized businesses don’t have to spend thousands on servers and software. It’s all owned and managed directly by companies that manage the software remotely from data centres, which means the customer doesn’t have to spend much money upfront on software or on the upgrades.

Arguably the most successful cloud operator on the Australian Securities Exchange is Xero, which sells its services to small and medium-sized accountants. At $24.28, its shares are below their March high of close to $43, but the company’s market cap is still over $3 billion, and it is yet to make any meaningful sales, let alone earnings.

But if Xero doesn’t start seeing some big money made in the US soon, its stock will continue to decline. This problem is already afflicting others in the sector.  [snip]  To read the full article @ The Australian Click Here. 

The author Richard Hemming is an independent analyst who edits www.undertheradarreport.com.au.  

Past Imperfect: Fixing Previous (Tax) Preparers’ Goofs

Jeff Stimpson for Accounting Today writes: It’s probably one of the most frustrating and time-consuming jobs in tax prep: fixing the mistakes of preparers who mangled a business or individual return before you saw it.

Many problems seem to stem from bad communication. “The greatest number of items I find is the number of items that the previous preparer didn’t ask the taxpayer about, [and] leaving out of the return many deductions,” said Paul French, an RTRP (Registered Tax Return Preparer) in Johnston, Iowa.

His examples of missed deductions include home offices and business mileage, “especially where the taxpayer’s employer reimburses for business miles driven but the employer reimburses at less than the IRS-allowed limit.”

“Calculating depreciation incorrectly, [and] taking bogus employee business expense deductions,” are among the mistakes seen by Stephen DeFilippis, an EA at the DeFilippis Financial Group in Wheaton, Ill.

Delmar Gillette, an RTRP at Newport News, Va.-based Economic Planning Services, sees previous preparers most often not setting up a depreciation schedule correctly or not using various carryovers: “Long- and short-term losses, passive losses, charitable carryovers, not picking up the taxable portion of the prior-year’s state refund.” 

Laundry lists

Marie Young, an EA at TaxTalk Inc., in Arden, N.C., and preparer of individual returns for more than 20 years, noted some of the biggest but simplest mistakes for individual tax prep:

• Failing to carry forward prior-year losses for capital losses, but also including suspended rental losses.
• Self-employed health insurance premiums.
• Depreciation for rental properties.
• Failing to capitalize expenditures for rental properties. 

Regarding partnerships and corporations, the balance sheet is not required for some entities based on revenue and assets.

“I find the most errors when a preparer does not prepare the balance sheet,” Young added. “Other errors on business tax returns include deductions for non- deductible insurances, as well as for automobile improvements and equipment, rather than capitalizing the asset.”   [snip]  The article continues @ Accounting Today, click here to continue reading.