Intuit lobbies against small businesses

Posted by Posted on by
0

With tax day behind us, small businesses across the country can finally move on to enjoying the warmth of spring. Unfortunately, the tax system has grown increasingly complex and burdensome for small businesses. According to a 2014 NSBA survey, more than 40% of businesses spend over 80 hours dealing with Federal Taxes. So, who is to blame for the pain small businesses endure year after year?

It’s not (entirely) the government’s fault

You can’t blame the federal government for not trying. However, past attempts by the federal government to simplify this nightmarish process have been futile. There has been no action on President Obama’s proposed legislation on return-free filing or pre-fill tax filings, where the IRS would compute your tax or pre-fill your tax forms based on the information already collected from employers, banks and other institutions.

The party pooper

As with any groundbreaking legislation, there is opposition and critics. Some say that the already overly burdened IRS is not in a position to take on this monumental task. Others say that the complex US tax laws prohibit such a filing system. With any contentious legislation, it is always interesting and surprising to see who opposes seemingly obvious reform. In the case of return-free tax filing, one of the biggest opponents is the tax preparation software maker, Intuit. According to opensecrets.org, Intuit had paid several million dollars to stymie moves by the government to offer return-free filing. A Forbes story says Intuit had derailed the California’s free electronic filing program and was influential in putting to sleep a similar program at Virginia.

What is Intuit is afraid of?

Intuit generates a major chunk of its $4 billion in revenue from sales of TurboTax, its popular tax preparation software package. Intuit certainly has a lot of reasons – over one billion of them - to keep the status quo. If there is a free alternative to Turbotax, Intuit’s ultimate revenue machine will be punctured.

Hey Intuit, leave the government alone

While offering tax preparation software solutions is not a core mission of the government, in this particular case its demanding citizens to comply with a complex tax code, and hence it’s obligated to offer all technological means to reduce this unwelcome burden. The idea of return free filing is not new; In fact, it’s prevalent in European countries like Denmark and Spain.

Resistance to changes in our tax system comes in many forms – no doubt it has been a political hot potato for decades. But, in the case of streamlining the arduous filing process for small businesses, the feet dragging is coming from big business – Intuit. We urge Intuit to allow the government to proceed with return free filing.

 

Tracking and Filing of 1099

Posted by Posted on by
1

1099 – Is it the year Crusaders struck or something else? It is January and in the United States this could mean only one thing – a form that IRS requires all businesses send to its independent contractors whose services were engaged last calendar year. Typically, these would be people who are paid on a per job basis like artists, web designers, legal consultant, videographers and others. 1099 comes with a dizzying array of variants and 1099-MISC being the most common. This post is all about 1099-MISC.

Is this meant for me?

Did you pay anyone more than $600 towards rent or other services provided? If the answer is yes, then you need to issue a 1099 for them. There are other reasons you might be required to send a 1099. Head over to IRS website and read the instructions carefully.

What is the Deadline for Filing?

As early as January 31st, 2013 you need to send your vendors a copy of the 1099-MISC. You should send a copy to IRS by February 28th, 2013 if you send it by snail mail or by March 31st 2013 if you file electronically. The IRS uses 1099s to match income reported and needless to say there are penalties if the deadlines are not complied with. Don’t be a Johnny come lately here! Remember your vendors/contractors will need this information to file their income taxes on time!

Okay, tell me how do I track these 1099-MISC vendors in Zoho Books?

Before you start tracking 1099-MISC vendors in Zoho Books, you need to request your vendors to complete a W-9 form. Once your vendor’s information is received, then enter it in your accounting software. Here is short guide on how to track 1099-MISC vendors in Zoho Books.

Now! Tracking is fine, but how do I send them to the contractors and file with IRS?

To get your information from Zoho Books and file it, you need to export your vendor from Zoho books into an excel or CSV and import that into the 1099 filing service of your choice.Click on 1099 guide for detailed instructions. You can use the services of any online 1099 filing and delivering vendors that have been approved by the IRS. Here is the link from the IRS website that lists the various providers approved by the IRS for delivering and filing 1099. (See below). You should ideally choose a provider that can file your returns online AND deliver it online to your vendors/contractors thereby removing paper from the process.

http://www.irs.gov/uac/Information-Returns-(Forms-1042-S,-1098,-1099,-5498,-8027-and-W2G)

As I had mentioned earlier, 1099 Forms are used for matching reported income and IRS is very serious about it and you should be as well.

Year End Accounting: Read these tips before you close your 2012 books!

Posted by Posted on by
1

The good news is that the world didn’t end on 12/21 as the Mayans had predicted. The bad news is: you still need to work on your accounting and taxes for 2012. Here are some tips in the form of a checklist so you can avoid overpaying or underpaying the taxman. It’s important you do this before you close your books for 2012. Happy 2013!

Reconcile your bank accounts

If you have been manually entering the bank transactions, it is imperative that you reconcile the bank balances with the actual bank statements. Look for the usual culprits like cancelled or uncleared checks. Give this a skip if you have setup a feed for online banking and have forgotten how to enter the bank transactions.

Complete your invoicing

Send the invoices for all the services you have rendered; products that you have sold and for any task that remains unbilled.

Record all your supplier bills

Ensure that you haven’t missed entering any supplier bills. Filter your inbox for e-mails from your suppliers — pull out that shoe box and if you see any bills that you have missed entering in your accounting system, do it right away.

Write off bad debts

The world isn’t a nice place always and you might have customers who are unlikely to pay you their dues. Let’s hope there aren’t invoices that you would be writing off. However, if that were to happen, then write off the invoices sent to such customers.

Get to the bottom and look for outliers

Compare the reports of the current financial year with the previous year’s and see if everything’s kosher. If something looks unreasonable, don’t fret! Use a magnifying glass and get ready for the great reporting drill-down. Dig and Drill until you are convinced till the last penny. Even pennies matter in business!

Record your depreciation

If your business has any fixed assets, you have to account for depreciation expenses. Zoho Books doesn’t have a form for this, but manual journals will come in handy. Consult your accountant, if this applies to your business.

Handle prepaid expenses

If your business has paid in advance for the insurance or other services, you would have recorded that as ‘assets’. You will have to categorize these as ‘expenses’.

Close out the owner’s draw

Any money you have withdrawn from your business for personal expenses is typically recorded under a temporary account. You have to close this account and transfer the balance to an equity account that reflects your stake in the business.

Get started with 1099s now

If you are using sub-contractors, you have to send them 1099 by Thursday, January 31 2013. Identify your 1099-MISC vendors, cull out the relevant details and use the services of an online 1099 filing service to send the forms across.

Don’t miss the last (s)mile:

If you spend time on the road for your clients, don’t miss recording the mileage. You can claim deductions for that!

 

I hope this checklist will come in handy for your year end and beyond. In addition to this list, invite your accountant to your Zoho Books organization and allow him/her to review your numbers from the comfort of his office or home. If you have been using an accounting software now and have done your books manually before, you must have realized much of the rigmarole associated with the manual accounting, like transferring of balances from income and expense accounts to retained earnings (sorry if this sounds like the ‘Accountantspeak!’) has completely gone. If you are still doing your books manually, the best gift you can get yourself this new year would be an online accounting software that you can count on!

 

Have an amazing 2013!

Zoho Books Gets Even Easier to Use With Automatic Bank Feeds

Posted by Posted on by
9

We’re always looking for ways to simplify life for our customers. We are thrilled to announce a major update to our accounting software, Zoho Books: You are now able to connect your bank and credit card accounts securely and automatically download transactions right into Zoho Books.

Reduce manual data entry
Let me illustrate with this with a simple example. You’ve bought a flight ticket using your credit card. To keep track of this in your accounting system, you’d need to manually classify this as a Travel Expense and enter multiple information including the amount, date, reference number, the airline from whom the ticket was purchased etc. This is tedious and can lead to mistakes. Even after going through this you are still not done – you still need to reconcile this with your bank statement. This is just one transaction. Imagine doing this for hundreds of transactions and the time wasted quickly adds up. We all have got better things to do!
But when you opt to receive automatic bank feeds, Zoho Books pulls in transactions from your bank accounts and all you’ll need to do is classify this as ‘TravelExpense’.

Auto-classification of Transactions with bank rules
Furthermore, Zoho Books allows you to specify how you want to classify the bank and credit card transactions, taking this closer to zero data entry. Continuing with the same example, you can tell Zoho Books to classify all purchases that in the description have ‘Southwest Airlines’ as “Travel Expense”. Voila! Absolutely nothing to enter and completely error free again.

We Support THOUSANDS of Banks 
Currently we support several thousands of banks that we are able to receive feeds via Yodlee. However, these do not include banks that require multi factor authentication. We will include these banks in our upcoming product upgrades. Yodlee is the world’s leading provider of online banking solutions and banks world over use Yodlee to automate aggregation of account data.
So what if your bank is not there in the list of automatic feeds? Don’t worry, we also allow you to import a CSV file bank statement. You still can gain massively from auto-categorization and avoid data entry. You just need to upload the statement yourself instead of Zoho Books doing it for you.

To learn more about this, visit our tour page.

This has been a top-requested feature from you, our customers. We can’t wait to have you try it out and let us know what you think.

Is Double-Entry Accounting here for eternity?

Posted by Posted on by
5


Take any popular

accounting software
 today, be it a SAAS player like us or our desktop counterparts or even the entreprisey ERP solutions, and I bet they all are based on double-entry accounting. For the uninitiated, double-entry accounting is a system of bookkeeping that enforces recording two aspects of a financial transaction – one that indicates the source of amount involved and another to indicate how it is put to use. It is said that this method was first codified by Luca Pacioli, an Italian monk in the fifteenth century (and I’ll leave it to The Almighty

Wikipedia
 to explain the rest).

It is fascinating to see that a system devised to catch financial inaccuracies six centuries back still finds its place in the world of accounting software and remains largely untouched. This when accounting software by itself is undergoing a transformation of sorts from desktop to the web.

To explain this phenomenon, let me first enunciate the benefits of manual double-entry accounting. Double-entry accounting is advantageous because it:

  • Is self-balancing in nature, enforcing arithmetical accuracy.
  • Makes it to easy to understand the source and uses of funds.
  • Ensures all aspects of all financial transactions available in a single place, so preparation of financial statements is easy.
  • Helps in fraud detection.

All of these are extremely helpful in producing accurate financial statements. And when human beings step aside and software takes over, much of these benefits still hold true. The reason for this is that double-entry accounting enforces some sort of a relational structure on the way transactions are recorded. For example, an accounting software would still record the two sides of a financial transaction and moreover, all of these are typically recorded in a single place (table in Relational database parlance), which makes it easier to summarize financial information.

Alternative accounting models like

REA (Resources, Events and Agents)
 that did away completely with double-entry and models that retained the double-entry flavor but tweaked other aspects failed to take off. My reasoning for this: the traditional double-entry model was deeply ingrained in the business person’s and accountant’s psyches, and it was never going to be easily changed. Also, amongst the more complex accounting alternatives, double-entry has remained one of the easiest and most effective solutions.

The accounting software industry will definitely undergo some changes in the times to come, but double-entry accounting will be as relevant as ever. And I bet somewhere up there Luca Pacioli must be smiling.

SAMTEQ Limited gets paid faster using Zoho Invoice and improves its cash flow

Posted by Posted on by
0


Recently, I had a tete-a-tete with Ken Coley of SAMTEQ Limited, a Scottish Web development company. He had some interesting things to share on his company and how

Zoho Invoice
 fits into his fast growing business. Some excerpts from our conversation:


1. How did SAMTEQ get started?


SAMTEQ Limited was established in 2009 by Sam Coley, at the age of 16 and has enjoyed rapid growth to a successful web development company. SAMTEQ creates web solutions for small to medium businesses, based in Scotland but serving the UK and beyond. SAMTEQ specialises on making extremely easy to manage websites, with a unique CMS system developed in-house. SAMTEQ customers tend to be owner managers and have little time to do anything apart from concentrate on their business. As a growing business we do not have an accounts department so we have to manage our invoicing between our paid work.


2. How did you discover Zoho Invoice?


Zoho Invoice came to our attention through Google search for online invoice system, allowing us to have a genuine no commitment free trial.


3. What invoicing software were you using before and why did you decide to switch?


Before Zoho, we were using Microsoft Access, a template found on the web. It did the trick but was slow and time consuming. We needed a system that allowed us to have

recurring invoices
 and make sure we actually created and sent the invoice. We switched to Zoho because it had all the functionality we needed and was very affordable, now we have been using Zoho Invoice for a few months and have found it has improved [our] cash flow and reduced our time, well worth every penny.


4. How has Zoho Invoice helped your business?


Finding Zoho Invoice was a great break through for SAMTEQ in dealing with our invoices. What was a chore turned into an automated process. When we need to create a new invoice, it is a breeze. When we first trialed the solution we found the setup to be easy and intuitive, only bringing up a couple of questions which were answered in the forum and an email to support. We generally bill customers for setup charges then have recurring charges for ongoing services. We invoice customers when we complete work and they have approved the work, this means we sometimes issue an invoice while on the move, the iPhone App makes this easy and, to be honest, quite satisfying!


Ongoing invoicing had become an issue as we often forgot to invoice small recurring charges and chasing payments. Zoho allows us to have an automatic invoice and an easy payment option for these small amounts, we find they now get paid quicker with the Zoho system.


5. How do you see life beside work?


Owning a business obviously eats into spare time but at weekends I like to get out onto the water and sail or play the odd game of Golf, in the evenings I mostly watch films.


That’s how SAMTEQ Limited took advantage of Zoho Invoice. Click

here
 to read more such customer success stories.


If you’d like to share how Zoho Invoice has helped your business, write to us at 

support@zohoinvoice.com
 or connect with us on

Facebook
 and

Twitter
.

Cash is King: Cash Flow Statement in Zoho Books

Posted by Posted on by
0

Real physical cash is what keeps your business running. It helps you pay your employees, make prompt vendor payments, juggle your marketing budget, meet unforeseen emergency expenses etc.

Isn’t it surprising, nay, shocking then to find that many businesses don’t know how much cash they have in their kitty at a given moment of time? And, when accessing this information is difficult, taking adequate action when cash levels fall below a certain threshold isn’t easy either. That could upset the best laid plans of any business.

We wanted businesses regardless of their size, not to get caught unawares but to overcome such a situation. So the team behind Zoho Books, the makers of your favorite

online accounting software
, has come up with a nice

cash flow report
. This report pretty much summarizes everything that has to do with your cash & cash equivalent accounts like checking and savings accounts. It shows you how much cash you have at any given time interval – the money that is coming in due to your day-to-day activities like selling goods or services, the amount that you raised for financing and where you have invested your cash.

The cash flow report tells the ultimate truth. Unlike the ‘Balance Sheet’ or the ‘Profit & Loss Statement’, it remains largely unaffected by accounting idiosyncrasies. We encourage you to make use of 

this report
 and we believe it will help you excel in cash flow management. May your cash registers keep ringing.  Until next time …


Cash Flow Statement in ZohoBooks

We love to hear your views. Write in at support [at] zohobooks [dot] com or drop a comment right here. For latest updates, follow us on Facebook & Twitter.