AU DIGITAL FIRST: Why The Take-Up of Cloud Accounting is So Slow in the US

 Stuart McLeod for DigitalFirst.com writes: I’ve spent the best part of the last six years – four of those in Australia and the last two or so in the United States – talking to accountants. Not many people can write such a ridiculous sentence, but here I find myself contributing six times a year to Air New Zealand’s profitability and over the key markets for Xeroand now, arguably, Intuit.

Having just started a new company again, Americans ask me why would you ever worry about Australia and New Zealand when the US market is so big. Aussies and Kiwis ask me why their Northern Hemisphere counterparts don’t understand the benefits of cloud accounting. Quite the paradox really.

Here’s why.

Outside of the states of California and New York, the adoption of technology is typically mired in regulation and incumbent interests. The best example of this is the continued proliferation of bank checks (or cheques).

America also has a large population of people without bank accounts, estimated to be in the tens of millions, mostly illegal immigrants. This is one reason why the adoption of internet banking remains at much lower rates than in other countries.

When we first arrived in San Francisco in late 2012 we used internet banking to transfer some funds to a supplier of handyman services or similar. The bank turns that request in to a check which it physically mails to the supplier. In the US, that’s electronic banking for you.

This glacial pace of technology adoption by business has not altered the thinking of the user like it has elsewhere. For example bank feeds, while terribly useful, aren’t the whole picture of the operator’s account. Many businesses still employ a manual process of check approval before they’re posted in the mail to vendors.

Bill.com’s own numbers suggest a low number of purely electronic transfers throughout the US.

So the benefits of cloud aren’t able to be fully realised. More importantly the shift of mindset has barely even begun.

Intuit’s transition of revenue from desktop to cloud is currently being executed extremely well.

While I’m sure they’ll disagree, the education process that facilitates this transition is not as strong as it needs to be. It’s not just about moving from a desktop application to a tab in Chrome; the life changing differences are profound and critically important. And they need to be emphasized effectively and broadly to the accounting market.

Most accountants and especially tax providers are very transaction oriented and typically interact with their client only once a year. Sure, tax returns keep the client out of jail, a very important goal in life, but it doesn’t add any value to their business.

I remember vividly Rod (Drury, Xero CEO) and Hamish (Edwards, ex-Xero co-founder) and Wayne (Schmidt, ex-Xero national sales manager) explaining to anyone who would listen about why this is such a terrible business model for accountants. This education process is critical to cloud accounting adoption and it’s not being executed well enough by any vendors in the US, yet.

Arguably, until recently, the cloud based tools have not been available in order to facilitate broad adoption. While Quickbooks Online was first released in December, 2000 its functionality and user interface was dwarfed by its desktop cousin. The enormous cultural transition that is required from being a CD shipping company to a cloud company should not be underestimated. Few if any large organizations have made this transition successfully.

All of these reasons are why the adoption of cloud based accounting has been slow in the US. I expect that over the next few years the pace of the transition will quicken as the benefits are realised and the competitive landscape heats up.

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Intuit CEO Sells $23,972,000 in Stock (INTU)

SleekMoney.com writes: Intuit (NASDAQ:INTU) CEO Brad D. Smith sold 260,000 shares of the company’s stock on the open market in a transaction that occurred on Wednesday, November 26th. The stock was sold at an average price of $92.20, for a total transaction of $23,972,000.00. Following the completion of the sale, the chief executive officer now directly owns 123,377 shares of the company’s stock, valued at approximately $11,375,359. The transaction was disclosed in a filing with the SEC, which is available at this link.

Several analysts have recently commented on the stock. Analysts at Morningstar reiterated a “standard” rating on shares of Intuit in a research note on Monday, November 24th. Separately, analysts at Deutsche Bank reiterated a “hold” rating on shares of Intuit in a research note on Friday, November 21st. They now have a $85.00 price target on the stock. Finally, analysts at Barclays raised their price target on shares of Intuit from $90.00 to $92.00 in a research note on Friday, November 21st. They now have an “equal weight” rating on the stock. Two research analysts have rated the stock with a sell rating, five have issued a hold rating, six have assigned a buy rating and one has given a strong buy rating to the company’s stock. Intuit has a consensus rating of “Hold” and a consensus price target of $91.57.

Intuit (NASDAQ:INTU) traded up 0.27% during mid-day trading on Monday, hitting $94.12. 1,808,699 shares of the company’s stock traded hands. Intuit has a 52 week low of $69.02 and a 52 week high of $95.42. The stock has a 50-day moving average of $87.4 and a 200-day moving average of $83.35. The company has a market cap of $26.871 billion and a price-to-earnings ratio of 32.62.

Intuit (NASDAQ:INTU) last posted its quarterly earnings results on Thursday, November 20th. The company reported ($0.10) earnings per share (EPS) for the quarter, beating the consensus estimate of ($0.20) by $0.10. The company had revenue of $672.00 million for the quarter, compared to the consensus estimate of $620.80 million. During the same quarter in the previous year, the company posted ($0.06) earnings per share. The company’s revenue for the quarter was up 8.0% on a year-over-year basis. Analysts expect that Intuit will post $2.48 EPS for the current fiscal year.

The company also recently announced a quarterly dividend, which is scheduled for Tuesday, January 20th. Investors of record on Friday, January 9th will be paid a dividend of $0.25 per share. This represents a $1.00 annualized dividend and a dividend yield of 1.06%. The ex-dividend date is Wednesday, January 7th.

Intuit Inc (NASDAQ:INTU) is a provider of business and financial management solutions forsmall businesses, consumers, accounting professionals and financial institutions.

When Are Pet Expenses Tax-Deductible?

Rebecca Lake for SmartAsset Blog writes: When you’re trying to score a break at tax time, maxing out your deductions can potentially lower your bill or result in a bigger refund. Apart from the standard write-offs for things like mortgage interest or business travel, you may be able to claim more unusual expenses, including the cost of taking care of a pet. The IRS has certain rules about when pet expenses are tax-deductible, so if you’ve got some furry friends at home, here are a few scenarios where you might benefit.

You Require a Pet for Medical Reasons

Service animals can take many different forms, including dogs, cats and even miniature ponies. If you’re required to have a guide or therapy animal because you have a diagnosed medical condition, such as blindness, epilepsy or post-traumatic stress disorder, you may be able to deduct the cost of its care as a medical expense on your taxes.

In order to meet the IRS standards, though, your pet must be trained and certified as a service animal. The kinds of expenses you can deduct include the cost of training, food, grooming and veterinary care. For 2014, the deduction is limited to the amount by which your medical expenses exceed 10 percent of your gross income, or 7.5 percent if you’re over 65.

You Use a Guard Dog for Your Business

While you can’t technically put a dog on the payroll, you may still be able to deduct the cost of its care as a business expense if it’s used primarily to guard your premises and inventory. The IRS doesn’t allow you to write off the cost of buying the dog itself, but you can use the deduction for things like food, training, boarding and medical care. Keep in mind that it only applies to the dog’s working hours, not expenses incurred during the animal’s down time.

You Foster Pets in Your Home

Volunteering with a service animal agency or pet rescue organization is a great way to give back, and it can also pay off at tax time. If you foster pets, either in your home or on your property, you may be eligible to claim the deduction for unreimbursed expenses. That covers food, shelter, veterinary bills, grooming costs, litter and bedding materials. These expenses would qualify as charitable donations, which are deductible up to 50 percent of your adjusted gross income.

You Move for a New Job

Changing jobs can be a hectic experience, especially if you have to move. Fortunately, the IRS allows you to deduct some of the costs of moving, including amounts you pay to transport your pet to your new home. Specifically, you can write off the money you pay to have Fido shipped by air, sea or rail. Deductions for moving expenses have to meet the time and distance criteria, so you need to be sure your situation qualifies before claiming it on your taxes.

You’re a Professional Breeder

If breeding and selling dogs, cats or other animals is your primary occupation, there’s good news: not only can you deduct food, medical bills and boarding costs, but you can also write off any other ordinary and necessary expenses that running your business entails. This includes things like advertising, costs relating to the business use of your home, and travel expenses. If you breed animals as a hobby, you only qualify for the deduction if your expenses exceed 2 percent of your adjusted gross income and you itemize.

You’re a Law Enforcement Dog Handler

Some of the cost that goes along with maintaining a police dog may also qualify for a tax deduction if you’re not reimbursed for these expenses through your job. If the dog lives in your home when not on-duty and you’re responsible for buying its food or purchasing a kennel, you can generally claim them as a job-related expense.

3 Tips for Cutting Your Tax Bill

The number one rule when it comes to claiming deductions for pet care is to make sure you’re documenting your expenses carefully. If you include something that you know is deductible but you don’t have documentation to support it, you may run into trouble if you’re audited. You don’t want to end up in the doghouse with Uncle Sam, so hanging on to all of your receipts is a must.

Up to One in Six Taxpayers in Jeopardy from Expired Tax Benefits

Analysis by The Tax Institute, the independent research arm at H&R Block (NYSE: HRB), shows tax benefits for individuals and small businesses that expired in 2013 could impact as many as one in six taxpayers. The Tax Institute estimates five of the more popular expired breaks benefiting individuals delivered more than $87 billion in tax benefits in 2013.

These benefits, that include the state and local sales tax deduction, mortgage insurance premium deduction, educator expenses deduction, tuition and fees deduction and the mortgage debt relief tax benefit, are often referred to as the “extenders” because they are part of proposed legislation that would extend up to 55 tax breaks that expired last year. The Tax Institute identified another two benefits as particularly significant to individuals and families – the nonbusiness energy property credit and the charitable IRA distribution provision.

“Unless Congress renews the expired tax breaks, taxpayers of all types and across all incomes will lose tax benefits they’ve used in the past,” said Kathy Pickering, executive director of The Tax Institute at H&R Block. “Taxpayers should prepare themselves and their tax returns for the changes that are ahead and look at other tax benefits for relief.”

Affected taxpayers include:

• Residents of the seven states with no income tax – including Florida, Texas and Washington – who itemize their state and local sales taxes. These residents have been able to deduct state and local sales tax from federal returns, similar to taxpayers who deduct their state income tax when itemizing.
• Homeowners who pay mortgage insurance have used the mortgage insurance premium deduction, which may help taxpayers unlock itemization of their deductions, leading to greater tax savings.
• The average teacher spends $356 out-of-pocket on classroom supplies and has been able to use the $250 educator expenses deduction to reclaim some of those expenses.
• Finally, taxpayers who face foreclosure and receive protection through the mortgage debt relief tax benefit. Without this provision, taxpayers may find their debt discharge results in taxable income.

Taxpayers should prepare for changeFive times in the past 10 years, Congress has extended expiring tax provisions or retroactively renewed expired tax benefits anytime between November and January.

“No matter what Congress does or does not do, taxpayers will face changes this tax season,” said Pickering. “These tax breaks expired more than 10 months ago, so either taxpayers will face the loss of these tax benefits or face late changes by Congress.”

Taxpayers should prepare for the possibility Congress does not renew all of the expired tax benefits. Taxpayers should familiarize themselves with the expired tax breaks they have used in the past. Then they should identify alternative benefits, if any, they may use in their place. While some taxpayers may be eligible to claim alternative credits, they are not identical substitutes and have unique qualifications and restrictions.

Key 2013 Numbers and Facts

• The expiration of the state and local sales tax deduction will impact one in every 14 taxpayers. More than 10 million tax returns used this deduction to the tune of $17.5 billion.
• More than 4.5 million tax returns used the mortgage insurance premium deduction for $6.2 billion in tax benefits.
• The educator expenses deduction for teachers totaled more than $996 million on almost 4 million returns.
• On more than 2 million tax returns, students used the tuition and fees benefit to deduct $4.5 billion.
• The mortgage debt relief tax benefit impacted a little more than 500,000 tax returns, but delivered more than $58 billion in relief.
• Taxpayers, using two residential energy credits – one of which is expiring – claimed almost $1.5 billion in energy-efficient improvements. Taxpayers who increased their home’s heating and/or cooling efficiency can no longer claim the nonbusiness energy tax credit.
• The charitable distribution provision allowed taxpayers to rollover IRA distributions tax-free to charitable organizations. IRA distributions were reported on 14.2 million tax returns; these taxpayers will no longer have an option to save on taxes by making qualified charitable distributions from their IRAs.

AccountingSuite Ready for the Future of Money / AccountingSuite is ready for the future of money. AccountingSuite will demonstrate its Bitcoin and digital payments integrations at the Future of Money & Technology Summit.

AccountingSuite will demonstrate its Bitcoin and digital payments integrations at the Future of Money & Technology Summit, held tomorrow, December 2, in San Francisco, California at the Hotel Kabuki. AccountingSuite is a proud exhibitor and sponsor of the Summit.

“AccountingSuite is ready for the future of money. Our customers use multiple currencies, digital currency and digital payments on AccountingSuite right now,” said Kurt Kunselman, Co-Founder.

“Today, businesses can purchase computers at Dell, office furniture and equipment at Overstock.com, and internet and TV from Dish Network with Bitcoin. Ten years from now, digital currencies and digital payments will be mainstream because businesses want to simplify and lower transaction costs,” added Mr. Kunselman.

Currently AccountingSuite allows users the following real-time capabilities:

• Pay vendors in Bitcoin with Coinbase— CoinBase’s Wallet and Vault are secure places to keep bitcoins and make payments
• Pay vendors digitally through Dwolla — Dwolla’s digital payments are faster and cheaper (Only 25 cents) than checks and e-checks
• Invoice customers and get paid through Stripe — Stripe makes it easy for businesses to set up merchant credit accounts on the fly

For a demonstration of AccountingSuite’s ease-of-use and digital payment features, visit the AccountingSuite booth at The 5th Future of Money & Technology Summit, held 9 am to 5 pm, December 2, 2014, at Hotel Kabuki, 1625 Post Street, San Francisco, California. For more information about the Summit, please visit FutureofMoney.com.

About AccountingSuite:

AccountingSuite is all-in-one software for accounting, inventory, order management, time and project tracking. The suite is cloud-based and bank-level secure. AccountingSuite gives companies access to critical financial information from desktops and tablets.

The AccountingSuite vision is to give companies, employees and business partners easy, secure access to information that often makes the difference between gaining new customers and losing them to the competition.

AccountingSuite is based in San Francisco, California. AccountingSuite provides easy-to-use, no-nonsense, scalable business software for startups, entrepreneurs, and growing companies to manage their finances and day-to-day operations. Visit AccountingSuite.com.

7 Cloud-Based Accounting Software for Small and Medium-Sized Businesses

CloudWave.com writes:

If you’re a business owner, accounting is one of the most crucial activities that, whether you like it or not, must be carried out, or you risk dragging your business down until it disappears from the face of the earth.

In the past, the most common method of keeping financial records was manually. Bookkeepers and accountants, commonly pictured as glasses-wearing math nerds, created reports, maintained the journals, tracked accounts receivables, monitored accounts payables, updated the ledgers, among many other activities. Because everything was mostly manual, finding errors was a dreary task, and mistakes could mean long hours of checking and rechecking, calculating and recalculating.

Nowadays, with the emergence of various cloud-based accounting software, what once was a tedious task has become easier, less expensive, and more connected with other critical business processes to streamline information flow throughintegration.

That said, here are seven accounting software to check out:

Xero

Xero offers an intuitive interface without falling short on capabilities, while doing away with accounting-related jargon that get non-accountants stumped.  Key features include online invoicing, file attachments, mobile access, free automatic updates, smart reports, unlimited users, and unlimited email support. Two or more users can access the service simultaneously from different locations using any computer or mobile device, making it more flexible and convenient than other desktop packages.

Pricing plans start at $20 per month with a 30-day free trial period.

FreeAgent

FreeAgent is an accounting solution excellent for freelancers and small businesses.Its built-in features include invoicing, PayPal integration, fixed asset depreciation, VAT reporting, Dropbox integration, and contact management. Users can input all their transactions, which makes the year-end process quicker and easier while also allowing the accountant to maintain a real-time view of the company’s financial position. Users can also import their bank statements directly into FreeAgent for easier transaction input and reporting.

You can test drive the software free of charge for 30 days. After which, the cheapest plan is at a monthly $20.

QuickBooks

A user-friendly web-based financial software designed by Intuit (developers of tax software that revolutionized tax payments) to help small businesses stay organized while complying with accounting standards, QuickBooks has a data hub for storing important data such as customer information, inventory-related files, and income and expense reports. It also offers payment tracking through automated online banking, bills management, and estimates creation.

QuickBooks can be used on both web and mobile platforms. All data stored is securely backed up, and users can export data to Excel spreadsheets anytime. After the 30-day free trial, paid plans start at $26.95.

Save 20% off Intuit QuickBooks Pro

Intacct

Now used by over 30,000 users, Intacct is a cloud-based accounting software that provides financial management and consolidation to small and mid-sized businesses. It helps finance professionals boost effectiveness and drive growth for their organizations. Intacct supports core accounting, revenue management, order and billing, time and expenses, purchasing, project accounting, multi-currency management, financial reporting, and global consolidation functionalities. Its efficient quote-to-cash process eliminates manual data entry and gives real-time business visibility through easy-to-create control panel reports.

Intacct pricing starts at $425 a month, which includes US-based support, 24/7 operations, upgrades, and enhancements.

KashFlow

KashFlow is a cloud accounting application mainly for small businesses or those that have staff in different locations. Since the software can be used on smartphones, it allows users to issue quotes through email even outside the office. In the event of a computer breakdown, data remains safe as it is hosted on secure servers. Devoid of the usual accounting jargon, non-accountants need not be intimidated. KashFlow is easy to set up, with no download required.

The starting plan, Starter, is set at £5 per month.

Sage 50

An accounting software ideal for small to medium-sized businesses, Sage 50accounting solutions make processes easier, more reliable and minimize the amount of time spent on accounting, enabling financial professionals to focus on further growing the business. Features include financial consolidation, electronic bills payment that speeds up cash flow and reduces costs, budget control, accurate financial records that are easy to understand, job costing and invoicing, as well as inventory management and purchase order automation.

Pricing starts at $259.99 with a 60-day trial period.

PHC FX

PHC FX is a web-based accounting software that offers paperless invoicing for painless billing and business management, enables users to finish projects and reach targets on time, boosts team productivity, and provides stellar customer support. Users can track accounts, time and money usages, and access important information, such as the company’s actual financial status – anywhere, using any device. PHC FX offers a full-featured free trial for 12 days, with paid subscription starting at €9.98 per month.

Final word

By automating tedious accounting processes, day-to-day business operations become more manageable. Accountants and business owners now spend less time performing routine, time-consuming accounting tasks to focus on more value-adding activities like interpreting statistics, providing sound financial advice, and sustaining and growing the business.

For more cloud-based accounting solutions, visit Cloudswave’s library of the best accounting software based on expert reviews.