Cloud Technology Has Business Advantages

Author: Keith Huggett

Any change in business operations should come with a careful analysis of how it will affect the company, both financially and culturally. This is particularly true for crucial financial functions like bookkeeping and accounting, as changes in these systems can have a larger impact. Switching to a new system is always daunting, but the benefits are often well worth the effort.

Consider the ways that cloud-based accounting can improve your business:

• Lower costs: Cloud-based systems are generally less expensive than purchasing accounting software, especially when you factor in lower IT costs, software and license renewals and time saved.
• Improved security: If you have all of your financial data stored on one desktop or laptop computer, you could be in for a devastating surprise if it is lost, stolen or damaged. Even with regular backups, key financial information could be compromised. With cloud-based accounting, all of your data is stored on remote servers, so even if hardware is damaged, your financial information is always protected.
• Flexible access: Cloud-based accounting systems give you the ability to access your information from anywhere, including your mobile device. It is also easy to add multiple users with customized permissions so key personnel can readily access the reports they need, when they need them, without waiting for another person to do it.
• Better business processes: Financial data entered into a cloud-based accounting system is automatically updated so that every user has access to the same information in real-time. This means less travel for your CPA, more accurate reporting and the ability to make faster decisions.
• More time: Improvements in efficiency will allow you and your employees to focus on more strategic efforts, rather than the mundane details of bookkeeping. Your IT staff will also have more time to dedicate to larger organizational issues.

If you are ready to make the switch to cloud-based accounting, let The Tax Office Inc. guide you through the process. We'll help you select the right package and set up your back office support system so you can free up more time to manage your business, not your bookkeeping. Contact us here for any cloud-based accounting questions.

Keeping Track from Donations to Taxes

Author: Keith Huggett

While nonprofits are not in business to make a profit, careful bookkeeping must be done. Often donors who make contributions want to know how and where their money is being used. If there is any sign of financial irregularities, donors may choose to donate to a different organization.

Tax Exempt Status & Receiving Donations

Have the proper forms been filed to attain tax exempt status? As with all things tax related, the requirements differ from state to state. Because the IRS only allows charitable donations to IRS designated tax exempt organizations you can see why this is a critical step. In most states, before you can accept donations, you will have to file Articles of Incorporation and appoint a Board of Directors to oversee the organization.

Tracking Donation and Recording Expenses

Having a solid accounting system in place to record donations and expenses is a must because donors require receipts in order to claim their deductions at tax time. Expenses should fall into two categories: program expenses and administrative expenses. Your program expenses are those expenditures made to support the organization's mission.  Administrative expenses are those that are made in order to run the non-profit organization, overhead and fundraising.

Tax Returns

Most charities file IRS Form 990, the return for tax exempt organizations. If the total amount of donations is less than $50,000, IRS Form 990N may be filed instead.

The tax specialists at The Tax Office, Inc. have the answers to your tax questions. Contact us now, for a free, no obligation tax consulation for your non-profit organization.

Cloud-Based Accounting Has Many Advantages

Author: Keith Huggett

Still unclear on the concept of cloud-based -- or virtual -- accounting? It simply means sharing applications and data over the Internet.  Instead of residing on your PC's hard drive or network, your financial software and records are stored on remote servers maintained by your provider. This is also called hosting.

There are numerous advantages to managing your business accounts this way; here are the top three:

Virtual accounting allows access from anywhere, 24 hours a day.

Need to pull up some numbers while on a business trip? How about share real-time financial data with business partners and employees located across town or many miles away? Cloud-based solutions allow 24/7 remote access to your data by anyone with a web-enabled computer or supported mobile device and login credentials. Your CPA can perform analysis and reporting  for you without leaving his or her office.

Cloud computing is easily scalable.

The host company handles the physical infrastructure in virtual accounting systems, and can quickly allocate resources like storage and processing power as your business needs grow. Hardware issues are no longer a matter for your internal IT staff to handle, and it only takes a few clicks to add or remove users in a cloud-based software system.  Contrast this with the hours -- or even days -- it might take an inhouse IT professional to install the hardware and software needed to set up new users.

Data security and regular backups exist in the cloud.

A reputable cloud solution provider will use 128-bit data encryption and offer antivirus and firewall protection. It will also perform regular backups to ensure that data is fully recoverable in the event of a disaster. An added plus: Software upgrades are automatically handled by the vendor, and you don’t have to worry about maintenance.

Cloud computing can be a daunting subject at first glance. At The Tax Office, we will gladly take the time to explain how our virtual accounting solutions can mesh with your existing operation and allow you to focus on growing your business. Contact us today; we would love to work with you to design on an optimal solution for your company.

How to Prepare for the Switch

Author: Keith Huggett

Ever lost a significant chunk of critical financial data stored on your hard drives or network? If so, you know how difficult and time-consuming it was to recover. You may even have lost sales during that period because of your information breakdown.

Recent studies indicate that a loss of 20 megabytes of accounting data costs around 21 labor days and $19,000 to reinstate and/or re-enter. And when 44 percent of data failures are directly attributable to hardware malfunctions, you can easily see the rationale for moving your data to a cloud-based accounting service, which will store your applications and data on remote servers that use the Internet to exchange information with you. Specialists at these firms are committed to remote network security, integrity and backups.

However, the last thing you want is to lose your data while making the transition to cloud-based accounting. Here are a few tips to help keep your data safe.

• Back up data securely before the move. Though it's rare, problems can crop up during the transition, causing corruption or loss of data. Having a backup will allow you to restart the process.

• Do not work on data while you are in transition. Data that is in flux is not safe, and can cause system problems.

• Make sure that your inhouse employees are properly trained. Studies show that 32 percent of data loss can be attributed to human error. Staff should be thoroughly trained on the transition to cloud-based accounting and know how to use the new system.

• Although your data will be housed on cloud-based servers, your employees will likely access information and work through laptops, tablets and PCs. To avoid data corruption due to viruses, be sure that all hardware is properly protected with antivirus and anti-malware software. Free programs like Microsoft Security Essentials and Malwarebytes provide easy protection against this type of data loss.

For more information about making the transition to cloud-based accounting, contact us at The Tax Office today. We're experts in both technology and accounting, and we'll offer the support you need every step of the way.

Virtual Bookkeeping Full of Advantages for Businesses

Author: Paul Cantelli

As a small-business executive, you're probably used to doing a lot of things for yourself. Thanks to  the advent of cloud computing, you can shed some of your IT management duties. One of the most exciting applications of cloud computing is in cloud-based accounting. Moving your books to the cloud will help your business in three different ways.

Increased security

How secure is the server that holds your accounting system? Do you have all of the latest computer security tools and software to keep hackers away from your business' most sensitive data? Is your server located in a weather-proofed building with backup generators and multiple layers of physical security to keep criminals from stealing it?  If you're using cloud-based accounting, the answer to every question is a resounding "yes." One of the key benefits of transitioning to the cloud is that your data gets access to the kind of multi-layered security that only the largest companies can afford on their own.

Better access

Cloud-based accounting makes it easier for everyone who needs access to get to your accounting data. This means that your employees can get access to the applications that they need wherever they are, you can access your reports when you are out of the office on business and your accountant can log in to review, complete and correct your books without you having to send them a data file. Many cloud accounting systems even offer access through secure smartphone and tablet apps, letting you truly have anytime, anywhere access.

Lower cost

As you know, traditional accounting software requires the purchase of an expensive software license, a server to run the software and additional cost to keep the server running and upgrade the software periodically. Cloud-based accounting bundles all of these services into a single low cost, usually billed monthly.

The tax and accounting professionals at The Tax Office Inc. have considerable expertise with today's cloud-based accounting systems. Contact us for help deciding if moving your accounting to the cloud is right for you and, if so, how to accomplish the transition.

Cloud Technology Can Streamline Business Management

Author: Paul Cantelli

Anyone responsible for running a business can feel chronically frazzled – there are just too many things that need your attention. You can’t do it all and do it well, too. Switching to outsourced accounting can save valuable time that you could – and probably should – be spending on your most critical activities.

Especially when it comes to managing your financials you can’t afford missteps. You need accuracy and timeliness to effectively direct daily operations and make smart decisions.

Outsourced accounting ties it all together.

Working in the cloud allows you to streamline all aspects of your accounting – data capture, retrieval, calculations and reporting. Cloud-based outsourced accounting easily integrates QuickBooks and Intacct accounting functions, accounts receivable and payable, payroll and periodic taxes and reporting, ensuring compliance with no slip-ups or risk of penalties.

You’ll have information at your fingertips to support annual and long-term tax planning as well as ongoing business performance analysis. That can help save money at tax time and improve your day-to-day operations.

Outsourced accounting does more than efficiently keep your finances on track.

Working in the cloud is faster and more accurate. You’ll benefit from:

• Uploading data or accessing files 24/7, from anywhere, assuring the mobility and flexibility essential to effectively manage any type or size of business these days.
• Top-flight security that safeguards your confidential or proprietary information.
• Automatic back-up and easy retrieval.
• Increased productivity, replacing manual labor with automation that eliminates mistakes, duplication of effort and time wasted on mundane, repetitive tasks.

You’ll save time on meeting travel and document transport and save money by eliminating the need for new technology, software, upgrades, IT time, storage, even office space. And you can hire the very best people, regardless of their location, because you’re working in the cloud.

The cloud may be invisible but it’s a solid business management tool, especially when it comes to accounting. Contact our experienced professionals at The Tax Office Inc., who can advise you about the most advantageous ways to adopt outsourced accounting, freeing you up to refocus your time and energy on your most important job -- running your business. 

Cloud Technology Requires A Learning Curve

Author: Paul Cantelli

All new technologies come with a lot of questions and a period of adaptation; cloud-based accounting is no different. In fact, because valuable financial data is involved, there tends to be even more questions and concerns. If you are exploring cloud-based accounting for your business, arm yourself with answers to the following common questions.

• Is cloud-based accounting secure? Data in the cloud is typically protected with advanced security procedures and encryption methods. You can also ensure data security by granting specific permissions to individual users. This can be even more secure than desktop software. With cloud-based systems, unauthorized personnel don't have the ability to log on and view financial data. With a desktop solution, this is not always the case.

• Where does the information go? When you enter financial data into your accounting application, it is stored and backed up on remote servers, usually several. This data is then available in real time to all users who access the application.

• What happens if the Internet goes down? Cloud-based accounting solutions generally require web access, but so do many of your other vital business functions. The beauty of the cloud is that you can access the data and software from anywhere, so if the Internet goes down in the office, you have the option to access and manipulate information from your laptop, or perhaps even your smartphone or tablet computer.

• Can we meet all of our accounting needs in the cloud? Yes. You can process payroll, pay bills, send invoices, submit time sheets, process credit cards, enter travel expenses, file tax forms and easily share up-to-date information with your accountant in the cloud. In fact, cloud-based solutions are much more versatile than desktop software, allowing you to integrate systems across your entire business.

If you have more questions about accounting in the cloud, or you want to get started, call us at The Tax Office, Inc. We can help you select and implement the cloud-based accounting solutions that make the most sense for your business and help you address any questions or concerns from your staff. Contact us today to learn more.

New Business Owners Have Several Choices for Accounting Services

Author: Keith Huggett

Starting a new business is a tremendous challenge. You have to design and create products and/or services, establish a brand, find customers, fill orders, etc. You also need to figure out what you spend and what you take in, maintain a positive cash flow, perhaps deal with payroll and certainly manage your tax obligations.

If you don't have the accounting expertise necessary to do this, there are a number of ways to handle your financial books. Here are four common options:

1. Do it yourself. Some entrepreneurs who have no accounting or tax experience manage their own financials. Dedicated software can help, but you still need to understand the basics of accounting. If you take this on, you risk classifying income and expenses improperly, which will make it harder to analyze your company's performance and meet your tax obligations accurately. This is risky for anyone but the smallest of businesses.
2. Hire a bookkeeper. Bookkeepers can do a satisfactory job of entering information into a pre-configured system. Most are not experienced enough to set up an accounting system, though, and they're not qualified to give you tax and planning advice.
3. Hire a CPA. The right CPA can do things well. But CPAs practicing solo have the same challenge that you do: keeping their own businesses running. And you're limited to the expertise of one individual.
4. Hire an accounting firm. Accounting firms typically have a mixture of CPAs along with other accounting and business professionals, and support staff. These days, they're also well-versed in technology. They can set up your bookkeeping system and help you in myriad ways, while basic data entry is done by non-chartered accountants and bookkeepers. This model can provide the expertise that you need, when you need it, and save you money.

Accounting is a time-consuming, unfamiliar process for most new business owners. It's very familiar to us at The Tax Office. We can handle every aspect of your financials, from online bookkeeping to payroll to tax planning and preparation to general business management and complete accounting. Contact us to get started, so you can focus on what you do best -- building your business.

Changing Systems May Help to Grow Your Business

Author: Keith Huggett 

 In past articles we have talked about outsourcing your accounting services. We still recommend that. You need to focus your activities on your core business, which does not include doing your own accounting, however, we do need to talk about which type of accounting system you are using.

When you are first starting up your business or have been in business for a while, you may have started keeping your books using a cash based accounting system.  This system is fairly easy to use and records financial transactions when cash changes hands.  It keeps track of what cash you have on hand very well, but does not do well keeping track of future sales or long term payments. Depending upon how much business you are doing, you may need, or want to shift your system to an accrual accounting system.

An accrual accounting system is a "real time" accounting system. Financial transactions are recorded as they happen. As you might guess, a lot more time is required to manage this type of accounting system.  We most emphatically suggest that you outsource this activity.  Using this type of system provides infomation that can be used to indicate sales forcasts, key performance indicators, and financial reports.

The general set of accounting principles, standards and procedures that companies use to compile their financial statements, commonly called GAAP, require businesses that have $5 million in annual sales or $1 million in inventory sales to use an accrual method for their accounting system.  The accrual method is also the preferred method for businesses that wish to significantly grow.

If you have any questions regarding cash or accrual accounting systems, please contact the Tax Office, Inc. Our specialists would be happy to answer any questions you may have.  If you have any questions regarding outsourcing your accounting, bookkeeping or payroll services we would be happy to help you.

 3 Things to Consider About Cloud Based Accounting

Author: Paul Cantelli

Accounting in the cloud is an excellent solution for many small and medium businesses. However, there are some factors to consider before you take the plunge. While accounting in the cloud provides better efficiency, more flexibility and several other benefits, you must remember that you are dealing with sensitive financial information that should not be handled lightly.

Think about these three issues before you make the switch to accounting in the cloud:

1. Vendors: A basic search for any type of cloud-based accounting solution will quickly show you that you have a lot of choices. In fact, you have so many choices that it can be overwhelming to compare the various features, functions and pricing. You also need to consider how reliable a provider is, what level of customer service they offer, and how long they will stay in business.
2. Legal issues: If your business is subject to certain data handling requirements, either from an external body or from your own internal policies, it is important to work with a provider who can meet these requirements. Find out how the vendor protects your data and what their confidentiality and privacy policies are.
3. Data backup: Data in the cloud is generally safe, especially if your providers use multiple servers at multiple locations. However, because this data is so important, you may want to consider having your own backup. Some providers allow you to automatically keep a backup on your local server, while others may require you to manually export data and back it up. Make sure that your provider can accommodate your preferences and make it easy to back up your data if you want to.