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Top five most overlooked tax deductions

2015-02-23T05:34:00.000-06:00

Brett Sholtis for YDR.com writes: Tax season is upon us, and though it may seem far away now, that April 15 deadline will be here soon.

Whether you have a trusted tax accountant or you process your own taxes, it's always possible that you're not getting the most out of your annual return.

Claire Weaver, a shareholder at the accounting firm SF & Company, highlighted five deductions that she said many people don't know about. While not everyone has a child in college or investments in a brokerage company, she said one or two of these deductions is likely to save you money.

Education credits

Weaver said most full-time students are aware of the American Opportunity Credit, which can be up to $2,500 per student, though only undergraduate college students with a set number of class credits are eligible.

However, there's also a Lifetime Learning Credit, which has fewer restrictions, as well as the option to go with a tuition and fees deduction.
"People have to see which one they can use on their return, and which one gives them most benefit tax-wise," Weaver said. "In situations like this, where you're trying to maximize your tax package, it's beneficial to have software to see which one gives a bigger return."

If you donate a security that has increased in value...

Weaver said this is one of the most commonly underused opportunities for those with stocks who also give to charity.
Let's say you bought a stock for $1,000. Its value increased, and you want to sell it for its new value, $3,000.

Normally, you have to pay a capital gains tax on the sale.
"If you're charitably inclined, and you're someone who may ordinarily give that $3,000 to charity, you don't have to pay the capital gains on that stock, as long as you transfer it straight to the charity," Weaver said.

So instead of selling the stock, paying taxes and ending up with a sum less than $3,000, you're able to donate the entire amount. Of course, you're also able to write off that charitable giving when you file your taxes.

Foreign tax credit

Weaver said that the foreign tax credit is probably the second most commonly overlooked deduction, because people with mutual funds and other investments tend not to sift through the individual stocks in their portfolio to see if they're foreign.
Basically, your investment statement will indicate if you paid a tax on a foreign stock. If so, you can take a credit on that return.
Though this credit may also apply for those with foreign properties, Weaver said you primarily see this situation when somebody has investments in a brokerage company. If there's any tax that's paid and it shows up on your brokerage statement, you can take a tax credit on that on your return.
"Take the time to look at your brokerage statement," Weaver said. "You may not even know that you have some foreign stocks."

Job hunting costs

If you're looking for a job and you incur expenses buying plane tickets, driving, or even buying things directly related to the job search, you can deduct those costs.
However, Weaver said that the deduction is only good for jobs within "your current occupation." As she put it, if you're an engineer looking for a new engineering job, you're good to go. If you're an engineer trying to become a Broadway star— sorry, you're going to have to foot the bill on your own, without a tax credit.
Weaver said that you don't even have to be unemployed while searching for a new job. You can still claim the credit.

Mortgage insurance premiums

Many homeowners pay mortgage insurance, and Weaver said you'd be surprised how many people overlook this deduction.
"Normally, this shows up on the 1099 you get from the insurance company," Weaver said. "Even though it's called a mortgage insurance 'premium,' the amount that you pay each year is deductible."
To be fair, she said people sometimes confuse mortgage insurance with homeowner's insurance, which is not deductible.

Investors, Don't Make These Tax Blunders / Mistimed sales, Roth-conversion mistakes, and failing to plan for unforeseen events top readers' lists.

2015-02-23T05:27:00.001-06:00

Adam Zoll for Morningstar.com writes: It's often said that one shouldn't let the tax tail wag the investment dog, which is just a cute way of saying that tax considerations should not dominate one's investment decision-making process. However, that doesn't mean one should ignore taxes altogether, as tax-smart investing can pad investors' aftertax returns while tax-ignorant investing can erode them.

Morningstar.com readers on our Personal Finance discussion board were asked last week to recall some of their worst investment-related tax mistakes and came up with quite a list. Some were classic beginner missteps--such as selling shares at the wrong time and, thus, triggering a larger-than-anticipated tax bill--while others involved unforeseen life changes. Fortunately, we can all learn from the mistakes fellow readers have shared and try to avoid them ourselves.

You can read the full discussion here, including the excerpts that follow. And stay tuned to Morningstar.com in the days to come as we present our annual Tax Relief Week special report.

Tax Tumult Takes Many Forms
The sheer variety of tax blunders readers said they'd made was somewhat surprising in itself.

"I keep forgetting that selling stock, even out of a mutual fund, is considered income," wrote Sergeantmajor. "I've got to check this next time, and perhaps find needed capital elsewhere. I am now keeping back a larger portion of cash in my portfolio for unexpected needs."

Reader retiredtaxmgr also shared a tax lesson he or she learned the hard way: "I had kept investing in a balanced fund inside a taxable account. I ended up paying income taxes for the high amount of dividends and capital gain distributions. I should have invested the fund inside a tax-deferred account to defer taxes. Or, instead of investing in a balanced fund, I could have put some in a bond fund inside a tax-deferred account and the rest in an equity fund inside a taxable account."

For patleon2, frequent trading led to an unwelcome tax surprise.

"A few years after I retired I subscribed to a service that recommended profitable trades without the hassle of my having to sift through a lot of research," the commenter wrote. "And profitable it was. Short-term gains resulted in a huge tax bill that year. I unsubscribed soon after that!"

Another tax problem that can trip up investors involves the alternative minimum tax, in which investment income can reduce the taxpayer's exemption and, thus, lead to a higher overall tax bill (for a fuller explanation, see "Is the AMT Costing Me More in Capital Gains Taxes?").

Just ask Uysses.

"One big personal mistake was selling a large block of very appreciated employer stock and paying more taxes than planned due to the capital gain being affected by the alternative minimum tax, which I didn't realize was the case," the commenter wrote.

Margaret17 said the problem was her decision to let an advisor make trades for her that led to "enormous capital gains when the tech bubble hit. I blame myself because I knew I needed to sell but lacked confidence in myself. My financial education started right after that. No matter what the blunder or how painful it was, if we can learn something from it, then there is something worthwhile about it."

Others cited errors in the timing of an investment sale. In the case of meddguy, it was being overly tax-conscious that proved costly.

"I bought this stock and held it for about 11 months," he said. "I had about an 80% profit. So, I decided to sell but just wait one more month so it would be long-term capital gains. As I am sure you guessed, the stock took a dive, and by the end of the month I barely had a 15% gain."

Then, there are those times when doing what seems to be the right thing turns out wrong, as in the case of Linehan, who wrote, "My wife was pressuring me to pay off our mortgage so I took the money out of my 401(k) to do it. The taxes on the withdrawal and loss of [the mortgage interest] tax write-off wiped out any savings of paying off the loan."

Bond-Related Blunders
Even with the variety of tax woes shared by readers, a few common themes were evident. One was the danger of holding bonds in a taxable account.

"I bought EE- and I-bonds and just left them sit," recalled valou. "Now that they are about to mature I really have a tax problem. Those $500 bonds are worth over $1,500. I've made other blunders, but those bonds are on my mind right now."

Reader chart tried to use tax-free municipal bonds to reduce his or her tax bill, but things didn't turn out as planned.

"I sold taxable-bond funds and stock funds in 2012 to create a muni-bond account of single-state bonds to generate tax-exempt earnings instead of taxable earnings," chart wrote. "I did not realize how much taxable capital gains were involved in the sales. As a result, I pushed our taxable income so high that year that my wife and I each got hit with the Medicare surcharge. ... That cost us $1,008 [in] additional Medicare premiums in 2013. Additionally, the gains pushed us into a higher tax bracket in 2012. Plus, the higher income made us ineligible for the state income deduction for seniors on our 2012 state tax return. A better approach would have been to split the mutual fund sales into two tax years."

Conversion Chaos
But perhaps the most common tax error cited by readers involved converting assets from a Traditional IRA to a Roth IRA.

For example, ShakAttack said that in his or her case, waiting to do so was a mistake. "Instead of doing it all at once as soon as it became permissible, I did it a bit at a time hoping for a [market] correction to reduce the cost. Unfortunately, markets rallied, and I ended up paying a lot more in taxes than I needed to," ShakAttack said.

For dorkmeyer, a recent Roth IRA conversation has turned into a tax disaster because of some unforeseen investment income.

"I converted Traditional IRA money to a Roth IRA in an amount that I expected would keep my total taxable income within the 15% tax bracket on the assumption that the amount of the year-end annual capital gains distribution for one of my mutual funds would be approximately the same in 2014 as it had been in each of the preceding two years," dorkmeyer said. "Proving that what they say about the word 'assume' is true, the 1099 that I received from that mutual fund a couple of weeks ago stunned me with the info that the fund's capital gains distribution for 2014 was nearly four times as much as it had been in each of the two preceding years, rocketing my total taxable income well into the 25% tax bracket. For this fool and his money, the expensive lesson learned is that, in future such situations, I should call the mutual fund near year's end to get some idea of what its annual capital gains distribution is likely to be."

Then, there was Hyrground, who missed an opportunity to convert assets to a Roth altogether.

"After reading several sources which indicated contributions to Roth IRAs were permitted until the tax deadline in the following year (e.g. April 15, 2014, for contribution year 2013), I held off doing a sizable conversion to a Roth until after Jan. 1. Unfortunately, I learned too late that that rule only applies to new contributions, not conversions--so I missed the window for that contribution year and could not do the conversion at all," the commenter said.

(For a broader discussion of Roth and other IRA mistakes, read "20 IRA Mistakes to Avoid" by Christine Benz, Morningstar's director of personal finance.)

When the Unexpected Happens
Another common theme among readers' tax mistakes was the high price of unforeseen circumstances.

Tomas47 recalled that, "In the early 1980s, I bought several real estate master limited partnerships. Worked great until the Tax Act of 1986 changed all the rules. Income tax filing was a nightmare requiring several additional forms and waiting until the last minute for K-1s to show up. [It was] so bad I told my wife to refuse to inherit them if I died--just walk away. I eventually was able to sell them on the third-party market. Out-of-pocket cost to transfer was more than the sale price I received. Given the tax advantages of the early years, my total losses were an inexpensive education that added a couple of rules to my investing process: 1) If you don't understand it, don't buy it. 2) If it adds a new form to your tax return, proceed with extreme caution."

One reader, DCFTim, shared the story of how his mother's death led to unexpected tax problems.

He wrote, "My mother died suddenly last year from complications related to Alzheimer's. I was managing her affairs when she was alive. Early in the year, several price targets were hit, which triggered the sale of certain holdings. I was expecting that her medical expenses would greatly reduce her taxable income, and I was planning to do further tax mitigation within the portfolio as necessary. Because of her mid-year death, though, things did not go according to that plan."

A couple of commenters mentioned that they thought they'd pursued smart federal income tax approaches with their portfolios but had failed to consider one thing: state income tax.

"The worst blunder was not learning about California tax rules until I'd lived there for 10 years," wrote artsdoc. "Everyone spends so much time learning about federal tax rules, but when you're living in a high-tax state, it's worth the time to learn about state tax rules."

FingerlakesGuy told a similar tale, but with a twist.

"My worst investment-related tax blunder? Selling highly appreciated funds in a year that my income was down to avoid federal taxes," he said. "Mission accomplished. Unfortunately I forgot to consider state taxes, so I took a sizable state tax hit. Luckily all was not lost. I repurchased the same funds at a lower cost basis, so in actuality I didn't really lose anything in the long run. It was just a surprise I wasn't expecting, but in the end, the taxes should end up the same or lower."

Given the results of some other readers' tax stories, that qualifies as a happy ending.

Xero shares climb 24% in a week as seller leaves the market

2015-02-23T04:14:00.002-06:00

Suze Metherell for NBR.co.nz writes: Shares of Xero [NZX: XRO], the cloud-based accounting software firm, have jumped 24 percent over the past week, amid market speculation a large seller has left the market.

The stock climbed as much as $4 to an intraday high of $20.40, the highest since October, from last Monday's closing price of $16.40. The stock recently traded at $20.00.

The Wellington-based firm's stock came under selling pressure last year, falling from a high of $45.99 in March to as low as $15 last October as investors mulled the outlook for growth, particularly in the US, while the escrow period for its 2013 capital raising, which saw it book $180 million from investors, came to an end.

Last week's sudden climb in the share price saw the stock market operator and regulator issue a 'please explain' notice to the company, asking Xero to confirm it was disclosing all material information which might be behind the gain. The tech firm confirmed it was, without issuing any further explanation to the gain in its shares.

Market sources told BusinessDesk they thought a large seller had exited the stock, removing any downwards pressure on its price.

"As far as I know it is mainly the selling has dried up, there was one large seller in the market place and he is pretty much gone," said Grant Williamson, director at Hamilton Hindin Greene. "The buyers are definitely back in control of the stock at the moment."

The appetite for Xero has flowed through to other tech-based companies, Williamson said. Diligent Board Member Services, the governance app developer, has gained 11 percent over the past month, and recently traded at $6.10, coming off from the highest level it had been since July 2013. Outside the benchmark index, Finzsoft Solutions, the software developer under a takeover attempt by its managing director and major shareholder, has gained 19 percent over the past month, and recently traded at $3.80.

"They're following on the back of Xero," Williamson said. "There has been renewed interest in all of those types of stocks and that's getting all the prices trading higher. Although the stocks that pay high dividends have done extremely well, investors are also looking to add a bit of growth to their portfolios as well."

Tax Software vs Professional Accountants

2015-02-21T06:55:00.002-06:00

McRuer CPAs writes: As we enter into the peak of tax preparation season, we are often asked about the difference between using tax preparation software and using the services of a professional accountant. Today there are dozens of preparation software options online and in software packages that can help a taxpayer complete their tax return. This as today's tax liabilities and concerns are growing more complicated than they've ever been.

A recent Wall Street Journal article revealed as taxpayers try out new tax software tools, they are making more and more mistakes. Often, it has to do with not knowing the right questions to ask to discover their best options. Many times, incorrectly entered numbers cause automatic equations to produce the wrong totals.

Don't misunderstand, there are good reasons to choose tax software to help you complete your income tax return on your own. There are also good reasons to choose a professional accountant. We came across an interesting and concise article online on Investopedia that explains your options clearly.

Here is that article for your consideration as you choose the best steps to take regarding the preparation of your federal and state income tax returns.

Tax Software Vs. An Accountant: Which Is Right For You? By Jason Steele | Updated January 29, 2014
""With every important job comes the question of whether or not individuals should do it themselves or hire a professional. While the ever-improving selection of tax preparation software certainly makes it easier to do your own taxes, it has hardly put Certified Public Accountants (CPAs) and other personal tax preparers out of business.

The Advantages of Using Tax Software Price
There is no way around the fact that you will pay less for a software package than you will to hire a CPA or another qualified tax professional. The price of tax preparation software ranges from the $10 to $120 range to websites that offer the service for free. On the other hand, the least expensive tax preparers will cost at least $100 and a CPA is likely to charge at least twice that amount. The upfront savings of using tax software over an accountant is one of the most attractive benefits of filing your own taxes.

The Advantages of Using Tax Software Price
There is no way around the fact that you will pay less for a software package than you will to hire a CPA or another qualified tax professional. The price of tax preparation software ranges from the $10 to $120 range to websites that offer the service for free. On the other hand, the least expensive tax preparers will cost at least $100 and a CPA is likely to charge at least twice that amount. The upfront savings of using tax software over an accountant is one of the most attractive benefits of filing your own taxes.

The Benefits of Hiring a Professional Accountant Better Software
Accountants pay around $1,000 to $6,000 for their software, which is far more sophisticated than the products sold to consumers. These more advanced programs have the ability to quickly scan your information and organize line items and forms correctly. By automating much of the data entry and organization, there's less chance for human error to hurt your tax return.

Human Touch
Like a good family doctor that knows your medical history, you can develop a relationship with an accountant so that he or she understands your family's financial situation and future goals. According to Wehner, who has been preparing taxes for 45 years, "A tax professional is often able to make valuable tax savings suggestions that a software program just can't anticipate." The value of this advice can easily exceed the additional cost of consulting with a professional. For example, a tax accountant can provide you advice on tax-friendly ways to save for your children's education, or how to reduce taxes on your capital gains.

Accountants Can Answer Your Questions Year Round
As a trusted professional, a good accountant will be able to answer important questions that arise not just during your annual consultation, but at other times during the year.

A CPA Saves You Time When Handling Complicated Issues
Taxpayers who find themselves at the center of complicated business and investment matters may even have the skill to sort through their taxes on their own, but is it worth their time? A professional tax preparer is so familiar with the system; he or she can quickly and easily accomplish tasks that might take even skilled taxpayers hours of research. For busy non-tax professionals, their time can generally be better spent earning money in their area of expertise. Even if your tax situation is straightforward, hiring a professional will save you the time and stress of doing your taxes.

The Bottom Line
Ultimately, there is no universally correct answer to the question of hiring a tax professional or doing your taxes yourself with software. Your comfort and familiarity with IRS rules will be part of your decision, but the complexity of your finances should be the key deciding factor. Those with a single employer and few investments may save hundreds of dollars by preparing their own taxes, while those with business income or rental properties will find the expense of hiring an accountant to be worth their peace of mind and potential tax saving.""

Tax deductions for Self-Employed and Freelancers

2015-02-21T06:53:00.001-06:00

Ron Friedman for RiverJournal.com writes: Taxes for the self-employed and freelance worker can get pretty complicated. For those in this segment of the economy often combine their personal and business lives and, as a result, reporting to Uncle Sam can get pretty complicated. Freelancers usually work out of their own home, use their own car to get to and from sales calls and don’t have a separate bank account to conduct their business affairs.

Whether you prepare your own taxes or have someone prepare them for you, it’s still a good idea to know what deductions you might be entitled to. The following is a list of common tax deductions for those in their own business. Every profession and industry may have its own unique characteristics; here’s a general list of what is available to most:

Home Office: In order to qualify for the home office deduction, you must have a dedicated space devoted to your business and absolutely nothing else. Deducting the den in your house that contains the family computer and serves as a guest bedroom is an invitation for trouble. The deduction is calculated by the amount of square footage devoted to your office divided by the total square footage of your home. That fraction is applied to the costs of running your home will be the basis for your home office deduction.

Automobile: The deduction for use of your automobile is the greater of the actual costs of owning and maintaining it compared to the standard mileage rate the Internal Revenue Service publishes every year — 56 cents per mile for 2014. Actual expenses may include lease or loan payments, registration fees, insurance, gas, maintenance, repairs, garage fees and depreciation. The caveat here is that the only deductible portion of the costs are those associated with the business use of the automobile. It is advisable to maintain a car log or diary, to distinguish business miles from personal miles.

Meals and Entertainment: The rules regarding meals and entertainment can get fairly complicated, however, here are some guidelines to determine if the expense qualifies:

1) The expenses has to be an ordinary and necessary expense that is common in your industry/profession and is helpful and appropriate to your business.
2) The expense has to be directly related to your business, meaning it occurred in a business setting, or the primary goal was to do business or for a particular business outcome. It does NOT have to result in business transacted.

Equipment: Normally business equipment (phone systems, computers, furniture, copiers, scanners, etc.) is tax deductible (depreciable) over the useful life of the equipment. The IRS publishes tables covering all kinds of equipment and their related tax lives. However, one of the nuances in the tax code allows for 100% depreciation in the year of acquisition.

Retirement Contributions: While not directly a cost of business, the tax code allows those self-employed and freelance workers the ability to lower their tax bill by contributing to a retirement account. Whether one utilizes an IRA, SEP or KEOGH plan, those contributions can lower your overall tax bill.

Health insurance: Premiums paid for health insurance by freelancers are deductible. In fact, for those who are collecting Social Security while freelancing, your premiums paid for Medicare coverage are also deductible.

Insurance (other than health): Premiums paid for business insurance (general liability, errors and omission, malpractice, worker’s compensation, etc.) are deductible.

Advertising: Any expenditure for advertising and promotion of your business would fit into this category, including digital advertisements, business cards, promotional items, brochures, etc.

Fees and commissions: If your state or county requires you to carry a license or business certificate to do business, this is the place to deduct those expenditures.

Contract labor: This includes all the independent contractors and freelancers you hired to conduct your business and is separate from anyone whom you treated as an employee. It includes the computer consultant you hired to set up your network, or any subcontractors you used to create a final product.

Wages: If you hire someone in your business (assistant, administrator, etc.) even temporarily, you can deduct not only the wages you paid but also, the related payroll employment costs (employers’ share of Social Security and Medicare, Federal and State Unemployment Insurance, etc.).

Interest: If you borrowed money to start or expand your business, the interest you paid during the year is fully deductible.

Legal and professional services: Fees to lawyers and accountants used to initiate or continue a business are deductible, including bookkeeping and tax preparation.

The most important part of managing the financial operations of your business should be planning. Tax planning should be part of that. One of the key short term strategies employed is knowing when and how much to pay for your quarterly estimated taxes. It will go a long way to avoiding surprises come tax day and more importantly, penalties and interest to the government. Once you’ve gotten your business off the ground, you should talk to your accountant about ways to maximize cash flows and minimize taxes from year to year. Sole proprietorships are the most common business organization form for the self-employed, however, there are other corporate structures a freelancer can adopt and gain significant tax and legal advantages.

5 Robust Accounting Software Systems Fit For Your Business / Quickbooks, WorkFlowMax, Financial Force, FreeAgent, Kashflow

2015-02-21T06:50:00.004-06:00

Finances Online writes: Small businesses usually start with manual accounting systems and then add programs such as QuickBooks or Microsoft Excel as their business expenses become harder to monitor. However, it is always best to plan ahead of time. Your organization’s accounting software system must be able to handle your current needs and quickly adapt to future growth.

Look for a robust system that can quickly grow along with your business. The system you select should well integrate with many of the business processes your businesses uses to save time and reduce data entry errors.

Data storage

When selecting a software-based accounting system, you have to make sure the system would encrypt your confidential financial information. That software system should also have the capacity to schedule backups so important information cannot be simply lost during a computer crash. Consider your organization’s physical storage needs, such as having file cabinets to lock up confidential documents and fireproof cabinets so you can have software backups. You can likewise store a copy of a recent data backup off-site that you can retrieve in case there is a catastrophic event that happened at your main office. However, you should also sure the location not too far away to get if you need to swiftly restore the information.

Reporting

Detailed accounting reports can help your managers make better informed decisions. For instance, printing a daily cash report can help you decide when to switch funds to your company checking account to handle payroll checks or even bill payments. Make sure the accounting system has the capacity to generate an entire package of financial statements including an income statement, balance sheet, cash flows statement as well as statement of owner’s equity. In addition, you may want to generate customized reports using the rich information located in your software’s database, such as cost of goods sold, inventory reports, accounts receivable aging, budget variance reports, open accounts payable for your company’s cash flow management, as well as tax reports for the CPA.

Internal Controls

For security purposes, the accounting system you should be getting should offer the choice of limiting permissions by user. The same user should not be allowed to handle deposits as well as reconcile bank accounts. If the system has the capacity to print the person’s initials or provide identification number on reports, this information can be used when auditing incorrect transactions. Your company’s supervisors should be able to have hard copies of reports to ensure the work of their employees. The organization should also have a process for checking out unusual journal entries as well as keep documentation in the accounting files.

Accuracy

The usefulness of an accounting software system would mainly depend on the data accuracy it contains. Start by getting professionals whom you trust to provide the information perfectly the first time. Do not try to save money by shortchanging your data entry personnel because you think any person can do the job correctly. Saving money by giving low wages may even cost much more in terms of accounting fees especially if you need to correct financial statements. Periodic review by your company’s supervisors can also catch various errors before they can have an effect in your company’s period-end closing numbers.

Do you have a B2B product you’d like to add to our listing?
If you are a vendor and have an interesting B2B product that hasn’t yet been listed on our review platform feel free to let us know about it. You can add your product to the listing here. Our experts will be happy to preapre a detailed review of your product free of charge. Here’s an example of accounting software review by us.

Here are five robust accounting software systems and their solutions.

1. Quickbooks Pro

QuickBooks Pro is established on the simplicity as well as popularity of Intuit’s QuickBooks, which is regarded as the entry-level software system for many small businesses. It brings additional features to the table, specifically by enabling business accounting to become easier by providing windows you use to track common business transactions, including invoices, check writing, and purchase orders. It integrates with a number of third-party products, scalable, and expandable.

QuickBooks Pro SmartScore and Customer Satisfaction
Our B2B experts reviewed QuickBooks Pro features, user experience, customer support and other key elements of the service. Final results as summarized by the SmartScore system gave QuickBooks Pro a score of 9.0/10 while the results provided by the Customer Satisfaction Algorithm place the overall user satisfaction rating at 98%.

2. WorkflowMax

WorkflowMax is a project management solution that has been built to handle all your business management needs, which includes project tracking, invoicing, job monitoring, timesheets, reporting, and all various aspects of project management. It flaunts a seamless integration with Xero’s business software as well as systems, including Xero Accounting software.

It is a wide set of project management tools that works perfectly with companies from different industries. It has an extensive list of applications designed to boost the potential of any enterprise.

WorkflowMax SmartScore and Customer Satisfaction
Our B2B experts reviewed WorkflowMax functionalities, user experience, customer support and other key elements of the service. Final results as summarized by the SmartScore system gave WorkflowMax a score of 7.3/10 while the results provided by the Customer Satisfaction Algorithm place the overall user satisfaction rating at 100%.

3. FinancialForce Accounting

FinancialForce Accounting for Salesforce is quite easy to learn, use, as well as maintain. It is a simple yet powerful cloud accounting system. FinancialForce provides an an end-to-end solution that is ideal for small and large sales as well as service-oriented companies that are looking for ways to make their business operations more effective at less cost.

It has the Salesforce Accounting app, leveraging the power as well as the flexibility of the efficient Force.com cloud platform. FinancialForce Accounting also integrates with Salesforce CRM to enable your employees to work as one team.

FinancialForce Accounting SmartScore and Customer Satisfaction
Our B2B experts prepared a detailed review of FinancialForce describing its features user experience, customer support and other key elements of the service. Final results as summarized by the SmartScore system gave FinancialForce Accounting a score of 6.7/10 while the results provided by the Customer Satisfaction Algorithm place the overall user satisfaction rating at 98%.

4. FreeAgent

FreeAgent is a web-based accounting and financial management tool that is well suited for those thatve small businesses and with up to 10 employees. Whether you are new to the business or are already successful in your business, this system is for you.

FreeAgent was created to respond to the difficulties of handling financial matters for those with small businesses as well as freelancers. It is currently being used by over 35,000 small businesses as well as freelancers in up to 80 countries who realized the tool is an easy and efficient method to handle their books and invoicing.

All your system data is backed up a lot of times every hour to the company’s secure server.

FreeAgent SmartScore and Customer Satisfaction
Our B2B experts made a full review of FreeAgent listing its features, user experience, customer support and other key elements of the service. Final results as summarized by the SmartScore system gave FreeAgent a score of 6.7/10 while the results provided by the Customer Satisfaction Algorithm place the overall user satisfaction rating at 98%.

5. KashFlow

Considered the top accounting and bookkeeping software solution in the United Kingdom, this tool has been giving topnotch online accounting software platforms for small business companies since 2005.

KashFlow is a top, cloud-based, and user-friendly accounting software solution designed to help small business owners really make sense of their business accounts. However, it has options for various businesses, full of automated features and well integrated with add-ons such as DropBox, PayPal, and many more.

KashFlow clients can generate quotes quickly, produce invoices that are fully customizable invoices, balance books, and check out their expenses.

KashFlow SmartScore and Customer Satisfaction
Our B2B experts reviewed KashFlow accounting software detailing its features, user experience, customer support and other key elements of the service. Final results as summarized by the SmartScore system gave KashFlow a score of 7.0/10 while the results provided by the Customer Satisfaction Algorithm place the overall user satisfaction rating at 93%.

QuickBooks Online Alternatives: Why SMBs Should Embrace Cloud ERP Accounting

2015-02-21T05:51:00.001-06:00

Marie Alonso for CompuData writes: If you are looking for QuickBooks online alternatives and think the best direction for your business may be Cloud ERP, you just may be right. Enterprise Resource Planning (ERP) solutions that deliver cloud-based functionality are ideal for small to mid-sized businesses looking to better automate and organize management processes – including financial management.

In fact, cloud-based ERP is an escalating trend. According to Gartner, a leading information technology research and advisory company, by 2018 at least 30 percent of service-centric companies will move the majority of their ERP applications to the cloud. The concept of a single ERP suite that meets all of an enterprise’s needs is incrementally being replaced by a hybrid ERP approach that combines cloud point solutions with on-premises ERP functions – like financial management.

Gartner predicts these hybrid ERP environments will be the norm within five years – as more and more small to mid-sized businesses take cloud ERP mainstream. Longer term, over the next 10 years and more, Gartner envisions a scenario where more of the market converts to the cloud.

Today, many enterprises of all sizes have already moved key elements of application functionality to the cloud, including accounting processes. Who are these cloud adopters? In some cases, they are companies that have outgrown QuickBooks and turned to QuickBooks online alternatives for better control, tracking and governance over their financial management.

Why Cloud ERP?

There are many reasons small and medium-sized businesses, specifically, should turn to cloud ERP to leverage an effective QuickBooks alternative.

Real-Time Productivity Gains: By automating key accounting processes and breaking away from the elements of QuickBooks that present time-consuming manual tasks, businesses streamline financial and operational tracking and management – eliminating wasted time, human errors and the dreaded reality of duplication.

Real-Time Visibility, Too! With cloud-based ERP solutions, business leaders and financial managers can view real-time data to delve into financial and operational performance. This level of real-time data scrutiny and sophistication presents 24/7 overview for enterprises – keeping businesses more informed than ever as accounting information is literally at their fingertips thanks to any mobile device.

Cloud Accounting = Cash Flow: Did you know a recent study shows that business owners who invoice and accept online payments through cloud accounting tools get paid nearly two weeks faster? Automating invoicing improves cash flow and saves time by eliminating the need to follow up on overdue invoices. Cloud-ERP solutions provide simple, easy, on-the-go financial management tools with 24/7 access – and the ability to reach your customers wherever they are to keep payments on schedule.

24/7 Cloud Collaboration – Your Time Is Your Money. With cloud-based ERP solutions delivering financial management 24/7, the traditional and time-delayed back-and-forth document pushing and file sharing between colleagues during an average business day is no more. With financial management tools in the cloud, accounting professionals and financial management team members can collaborate on financial reports in real time and review up-to-date data. Plus, with cloud-accounting, small business owners still holding the reigns over all accounting tasks can get organized and stay organized 24/7 – giving them more time to run their businesses. [end]

Who is CompuData? A Different Kind of Technology Company

We believe that better technology solutions mean better business. CompuData specializes in providing business software and technology solutions that is customer and solution oriented. CompuData offers a vast spectrum of IT solutions not limited to the areas of accounting, distribution, manufacturing, customer relationship management (CRM), hardware and data storage, systems integrations, network management, security, and cloud services. And with over 40 years of technology and customer satisfaction obsession, we have learned a thing or two about delivering technology solutions that provide scalability and ways to increase profitability.

Six Audit Red Flags and How to Avoid Them

2015-02-21T05:33:00.001-06:00

Who is Bench? "We’re a laid back group of people working hard on a tough problem. Bookkeeping is a universal point of pain for entrepreneurs, and we’re changing that." - Bench, visit Bench by clicking here.

Lindsay Angus for Bench writes: Being the subject of an IRS audit can be stressful, time-consuming, and potentially very expensive. While there is no foolproof way to avoid an audit, there are measures you can take to drastically reduce your chances of showing up on the IRS radar. Here are six measures that you can incorporate into your business habits today to lower your chances of receiving an unwelcome visit from the IRS:

Account For All of Your Income

Are you currently a small business owner but also doing some consulting on the side? If so, be sure to accurately report all of the money you are bringing in across your different income streams.The IRS uses the information on Forms W-2, 1098, and 1099 to compare the income and deductions you report on your return with the information reported by others, such as employers, banks, and businesses. Any discrepancies between reported income amounts is an obvious red flag for the IRS and will likely provoke further investigation.

Double Check Your Return

Making a careless error on your tax return is the easiest way to guarantee yourself a visit from the tax man. In the event of any omission, miscalculation, or error on your return, the IRS is obligated to further investigate your case. Accordingly, you can greatly reduce your chances of an audit by ensuring that all sections are correctly signed, sealed, and delivered. For business returns, acquiring outside help may be a good choice.

Maintain Organized Records

Keeping organized records makes for a much smoother tax season, reduces your chances of receiving an audit, and helps you substantiate your claims in the event that you are audited. One distinction that the IRS upholds is the difference between a hobby and a business. Sometimes referred to as the ‘hobby-loss rule,’ the IRS states that if you have an activity that is not designated as a business, then the “allowable deductions cannot exceed the gross receipts for the activity.” Keeping accurate books and using financial records to improve your profit margin will help convince the IRS that you are running a legitimate business and not a claiming deductions on a hobby. Also, if you do get audited in the future, you will have unflappable records to prove where the money was coming from and going to.

Separate Your Personal and Business Expenses

The IRS is very strict about business owners keeping personal and professional expenses separate. They define a business expense as something that is “both ordinary and necessary.” Some expenses can be hard to differentiate on a receipt or bank statement, but having an account or card that is solely used for your business, as well as keeping thorough notes of why this purchase benefited your business, will make an audit less likely and also safeguard you if you’re audited in the future.

Stay Consistent with Your Accounting Methods

As a business owner, you have the choice of two different accounting methods: cash or accrual accounting. Bouncing back and forth between the two can be seen as potentially deceitful and will likely incite further investigation. Whatever method you deem best for your business, just be sure to stay consistent; failing to do so will attract the IRS to your return and potentially make you the subject of an unwanted audit. Learn more about cash vs. accrual accounting here.

Keep it Straight - Employee or Contractor

Properly classifying workers is crucial because it determines the taxes that need to be paid, when they are paid, and who pays them. Generally, for an employee you must withhold income taxes and pay unemployment, Social Security, and Medicare taxes. With an independent contractor, you generally don’t need to withhold or pay taxes on their paychecks. The IRS is on the lookout for businesses who intentionally miscategorize employees (therefore skipping the taxes). If you frequently work with full-time independent contractors, be sure that they really are contractors and not employees. If you’re not sure whether you are working with an employee or an independent contractor, learn more about How to classify your team.

No one wants to be questioned by the IRS, but running an organized, professional, and informed business will reduce your chances of being audited, as well as prepare you if one does come along. Having a team of bookkeepers and accountants in your corner doesn’t hurt either, and at Bench, we’re always there for you.

vTiger (CRM) and Xero on Maestrano is a winning combination for your business....

2015-02-20T10:24:00.004-06:00

Maestrano is an advanced cloud computing service that brings together the best software solutions for small to medium business, at very low cost and carefully selected for quality and ease of use.

Maestrano features unique technology that enables different software applications to share information, to connect different clouds and to bring desktop or "offline" software into the cloud.

Over at the Maestrano blog we read the following: How do you decide what business applications are best for your business?

A good way to start is to always see what your peers/competitors are using. But that doesn’t necessarily mean those solutions are the best. So you need to really know your business, where it’s heading and how you want to get there. From here, you can evaluate different applications and see which one is going to give you the tools you need to achieve your strategic goals and vision.

One business that has nailed this is Sunshine Coast Destination Limited.

Sunshine Coast Destination Limited is a not-for-profit, membership based, destination marketing body that aims to develop and manage tourism for the benefit of visitors and the local community. It is the official tourism organization for the Sunshine Coast.

As a membership based organization Sunshine Coast Destination Limited needed a solution that would help them gain a better understanding of their current membership, run detailed reports and ultimately add greater value to their members.

They were already using Xero, a beautifully designed accounting software tailored for Small and Medium Businesses. They loved Xero as it was simple, intuitive and at the end of the day it worked. They could conduct all their financial activities in Xero. The only problem was that it didn’t connect with their existing membership system.

The other problem was that their existing membership system didn’t work that well either.

This is how they found Maestrano. Sunshine Coast Destination Limited, wanted to find a solution that integrated with their existing Xero system. On Maestrano, through our patented technology Connec!™ we are able to seamlessly connect any application together. This means any Connec!™ ready application on Maestrano will share data with Xero.

After consulting with our team, various demo’s and a free trial, Sunshine Coast Destination Limited decided that the best application to help their business was vTiger. A powerful and highly customisable CRM tool. Already offering many features out of the box including full salesforce automation, reporting, permissions and thanks to Maestrano’s Connec!™ seamless and free integration with Xero.

Once vTiger and Xero were being run on Maestrano, instantly all the data from Xero was synchronized with vTiger! This simple one click process just saved hours if not a week of data entry!

Now whenever a new lead is converted into a member, they will also appear in Xero. Whenever an invoice is sent through Xero, that record will also be available in vTiger instantly! If a member changes their address and it’s updated in vTiger instantly it will update in Xero. This means that across the entire organization, Sunshine Coast Destination Limited, will always have the most up to date data available at their disposal.

Now there is lime time, effort and money being spent on administrative tasks such as data management and more time to spent on value added activities!

So if you’re a membership based organization, be sure that using vTiger and Xero on Maestrano is a winning combination for your business!

What Happens If You Don't Pay Your Taxes? / Failing to file and pay Uncle Sam can result in hefty fees, mounting interest – and worse.

2015-02-20T10:18:00.000-06:00

Geoff Williams for US News Report writes: What would happen if I just didn't pay my taxes? That question has probably crossed your mind at least once.

But rather than finding out the hard way, here are some likely outcomes.

You'll owe more. If you've committed yourself to not ever paying taxes, this may not matter to you. But if you’ve decided you aren’t going to file this year because you’re tired of doing it, you may want to rethink that plan.

We’re not talking about filing and not being able to pay what you owe. (If that's the case, don't panic. The IRS has a reputation for being easy to work with.)

But if you’re feeling tax inertia, you should do what you can to pay your taxes by the April 15 deadline, or ask for a six-month extension by filing Form 4868. No, the ground won't open up and swallow you whole if you fail to do either. You won't likely be carted off to jail or lose your house. But you will be penalized with fees.

You'll eventually learn this when you receive a letter from the IRS, according to John Gregory, a tax practitioner and founder of 1040Return.com, which provides tax preparation software and tax resources for individuals and businesses.

"The IRS will calculate your income for you, using the worst case, which would be filing you as a single individual with one exemption. Based upon these deductions, the IRS will calculate your tax liability with penalty and interest," Gregory says.

In other words, if you don't do your taxes, the IRS will file them for you.

While it may sound like a great way to spare yourself the hassle of filing your taxes, this is hardly free professional tax help. Gregory breaks down what you’d owe if you had $30,000 in reportable income in 2012 and didn't pay taxes for it until 2015. In that case, you would owe $2,653 in back taxes. About half of that sum would be due to tax penalty fees for failing to file and pay up.

And we still haven't gotten to the interest you’d pay.

"Generally, interest accrues on any unpaid tax from the due date of the return until the date of the payment," Gregory says. "The interest rate is determined quarterly and is the federal short-term rate plus 3 percent. Interest compounds daily. So you would accumulate approximately $159 in interest."

You'll spend extra time and money cleaning up your mess. Assuming this was a momentary blip in judgment and you later decide to pay your taxes, you should factor in the amount of time and money it'll take to catch up. SNIP, the article continues @ US News Report, Click here to continue reading....

529 Plans: Fund College Costs The Tax-Advantaged Way

2015-02-20T09:38:00.002-06:00

Robert Swenson for ORBA writes: For many taxpayers, the best way to fund a college education is a Section 529 college savings plan, because of the potential tax advantages it offers. Earnings can grow tax-deferred and may be withdrawn free of federal and, generally, state income taxes for qualified expenses. Their contribution limits are much higher than those for other tax-advantaged educational savings vehicles, and they offer estate tax benefits. But, as this newsletter explains, there are drawbacks that should be considered, as well.

If you are a parent or grandparent of minor children, you are likely thinking about their future college educations and the best way to fund them. For many taxpayers, the answer is a Section 529 college savings plan because of the potential tax advantages it offers.

The Lowdown

State-sponsored 529 college savings plans allow you to make cash contributions to a tax-advantaged investment account.

Although contributions to a 529 college savings plan are not tax deductible at the federal level, earnings can grow tax-deferred and may be withdrawn free of federal and, generally, state income taxes, provided they are used for qualified higher education expenses. These include tuition, fees, books, supplies and equipment, and certain room and board expenses. Nonqualified withdrawals are subject to taxes and a 10% penalty on the earnings portion.

Although most college savings plans are open to both residents and nonresidents of the state sponsoring the plan, there may be advantages to opening an account in your home state including possible state income tax deductions or other state tax breaks.

Perhaps the biggest advantage of 529 plans is that their contribution limits are much higher than those for other tax-advantaged educational savings vehicles. The tax code does not specify a dollar limit; it simply requires plans to "prevent contributions ... in excess of those necessary to provide for the qualified higher education expenses of the beneficiary." Limits vary by plan, but in general, they range from $150,000 to more than $350,000 per beneficiary.

Other Pluses

While 529 plans are designed to fund college expenses, they also provide estate planning benefits. Contributions are considered completed gifts for purposes of gift and generation-skipping transfer (GST) taxes, but they are also eligible for the annual exclusion, which currently shields up to $14,000 per year ($28,000 for married couples) in gifts, to any number of beneficiaries, from gift and GST taxes without using up any of your lifetime exemptions.

Moreover, a 529 plan allows you to "front-load" contributions. This means that you can use up to five years' worth of annual exclusions in one year. Suppose that a husband and wife open 529 plans for their two grandchildren and that each plan has a $150,000 contribution limit. The couple can immediately contribute $140,000 (5 × $28,000) to each plan free of gift and GST taxes.

For estate tax purposes, 529 plans are a great tool because contributions and future earnings are excluded from your taxable estate despite the fact that you retain a great deal of control over the funds. Typically, you cannot place assets beyond the reach of estate taxes unless you relinquish control (by placing them in an irrevocable trust, for example). But with a 529 plan, you retain the ability to time distributions, to change beneficiaries or plans (subject to certain limitations) or even to revoke the plan and get your money back (again, subject to taxes and penalties).

The Drawbacks

As great as 529 plans sound, they do have some drawbacks. One is that you are limited to the investment options the plan offers. Another is that you can change investment options only twice a year (up from once a year in 2014) or if you change beneficiaries. But anytime you make a new contribution, you can choose a different investment option for that contribution.

There are also a couple of estate planning drawbacks. First, if you front-load contributions, you cannot make additional annual exclusion gifts to those beneficiaries for five years. Second, if you die within five years after making these contributions, a portion of them will be included in your taxable estate.

President Obama recently proposed reforms to the 529 program in the context of broader education reform. The proposal was intended to simplify the tax benefits for higher education and remove the 529 plan tax break for the top earners. Subsequently, however, the Obama administration dropped the proposal after public backlash.

Right for Your Situation?

If you are interested in putting away money for your children's or grandchildren's college education, 529 plans merit a look. They can be especially beneficial if income or estate taxes are a concern.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

How to Pick Contact Management Software For a Small Business

2015-02-20T06:57:00.005-06:00

Who's "PieSync"? Set up true two-way sync between your cloud apps: PieSync fills the gap between your cloud applications. In no time at all, you’ll be synchronizing emails, contacts, tasks, calendars, events and documents. Every item you add or update in one application, automatically gets added or updated in the other.

Mattias Putnam for PieSync writes: Picking a contact management solution or CRM for a small business doesn’t have to be hard. In this post, you’ll learn how to approach the problem in a sensible way, how to avoid the common pitfalls and which questions you need to ask yourself before you start looking into the options.

The other day I was talking with some people about the best way for small businesses to approach contact management systems, and we agreed that the process of getting a contact management software solution is much like buying a new car.

How Getting a CRM Is Like Buying a Car

When you set out to buy a car, you have requirements, an idea of what you like and your budget enters into it too. You wouldn’t buy a huge SUV if you live on your own in the center of town and just need a car to visit friends and go on weekendtrips to the country. Neither would you consider buying a Mini if you are the proud mum of 4 children and 2 Golden Retrievers.

The same goes for contact management systems. Or at least, it should.

As you will have guessed, I am looking at this from a purely functional and rational point of view here. Some of my dearest friends drive around in cars that are completely unsuited to their needs, but driving an old-timer or a red-hot sports car is something you do out of love, not rationality.

Are Business Decisions Based on Rational Thought?

In business, one would expect the decision for a business tool to be made on rational grounds, but often it’s not.

Come to think of it, I actually know quite a few people in Sales and Marketing who approach CRMs in an emotional way. I hear them say “Let’s get Salesforce, it’s the best!”. Mind you, these people know, in their hearts, that paying a hefty fee for a CRM that is powerful, but has a steep learning curve, won’t magically supply them with a healthy and full sales funnel all by itself.

Probably they also know that Salesforce is way too powerful just to use it to share a contact list between co-workers and partners.

But still they feel attracted to the market leaders. I can understand that, there’s a certain something about buying what is considered ‘best of breed’. A glow of potential, a feeling of belonging to a tech-savvy group.

Let it go, let it go

Like in that song from Frozen, you’ve got to let those feelings go.

Not all of them though, as emotions and intuition will play a large part in how you interact with your CRM.

Your contact management tool is going to be your buddy at work, you’ve got to make sure the two of you get along. You have to like the look and feel. Trust it. Feel comfortable using it. Know where to turn if something breaks. Yes, much like with a car. And just like there are small cars that give you a luxurious feeling or large cars that you can still use in a city, there are CRMs to cater for every need. Finding the right one is all you have to do. When you find it, you’ll glow inside. Doing your research, defining your needs and then getting the tool that’s just right for you,… well, that makes you feel all warm and fuzzy inside.

Should We Continue Without a CRM?

On the flip side, not investigating the possibility of a system to help you manage your contact list, isn’t the way to go either. Using nothing might be the cheapest option but, at a certain point the cost of a system doesn’t weigh up against the stress involved in the endless carrousel of Excel sheets and poorly managed shared contact lists.

Taking this back to the cars: I also know quite a few people living in the center of town who vehemently refuse the mere thought of buying a car.

They cycle, they walk, they hop on trains and hitch rides with friends. It’s good and healthy, but not always easy. Especially when your family expands, or your health isn’t too good, it can become a drag. Some of my friends hang in there, and I cheer for them. In the same way I applaud people who manage their contacts without a system. They do a quick search of their inbox when in need of somebody’s number, as most people will have it in their signature. Or they turn to LinkedIn. Less hassle inputting everything, more time spent interacting with the people behind the contact information.

Just like some of my no-car pals have started exploring shared cars systems when an outing to the country turned into a drenched trek from bus stop to railway station, I see people in small and medium-sized businesses decide to look into some sort of contact management tool when it simply isn’t fun anymore to stay on top of their contact database without one.

Now comes the cheapskate part. If you really look into what you actually need, you’ll find yourself spending a lot less money. You can then invest this money in other areas of your business. Like buying some plants, so that you can grow your contact database and some flowers on your windowsill at the same time. Now wouldn’t that be nice?

3 Steps That Will Lead You To Your Perfect CRM

The internet can be like a slick car salesman. Make sure you’re in charge! The key to feeling empowered before you approach vendors comes in 3 simple questions:

1. Ask Yourself: Why Do We Need a CRM?

Ask yourself and your team the most important question first: what do we want to achieve by getting a contact management solution?

Do you mainly want to:

manage a large set of contacts
share contact information with a (remote) team
keep contact information up to date when it is stored in different places?

Or do you have broader requirements:

follow up on your sales leads
sales funnel management
invoicing
task management
managing price quotes
bids tracking
integration with landing pages and forms
time management

There are systems out there that offer these things and more, in various combinations.

Where you could go wrong is when you start looking at what vendors offer, before you decide on what you want to achieve. If you start by taking a deep dive into vendors’ websites, you’ll end up reverse engineering their offers to your needs. This would be like buying a car with a huge trunk because the sales rep painted you a pretty picture of packing it with all you need for endless holiday fun – except you mostly travel by airplane.

The internet can be like a big candy shop sometimes. You set out to buy a CRM for your 5-people PR-agency. All you want is a way to share a list of press contacts and potential customers with your team. Several months, 17 unproductive meetings and a slap on the wrist from Accounting later, you are stuck with the Unruly Mammoth Beast of Overpriced and Underused CRM. All because on the vendor’s website, all those features really looked like something you needed…

2. Write Down What You Want To Achieve With Your CRM

Leverage the power of the written word. Put a document together with your team, so that you are all on the same page. This can be in a few short bullet points or in long form, where you write the story of how you and your team want to work with your contacts in an ideal way. Keep this document near you when researching, you might even want to print it out and keep it next to you when you are searching for a CRM.

3. Google Your Heart Out - But Remember What You Are Looking For

Sometimes, when you start looking around, you will find what you need immediately. Go for it.

Sometimes, you will find a solution that offers much more than you need. Resist the urge to start wanting those features, because you think “it would be so great if we could do that too”. Why should you resist? If it is something that you’re not doing now, it is going to require extra work to start doing that. Remember, your reason to buy a CRM in the first place was to make your workday lighter, not to add more to your plate. Remember:

You can always change to a more comprehensive solution later. Most contact management tools for SMEs don’t require a long commitment, and if you make sure that you can easily export your data, there’s no reason not to make a switch when your needs grow.
Tools are in constant evolution too, perhaps the more basic tool you buy now, will add functionalities later on, in line with your changing requirements.

What if many solutions look really similar?

contact the vendor, talk to a sales rep, and check your list of requirements with him or her
read product reviews, ask peers what system they use
compare prices, and really focus on getting the features you need
ultimately, choose the software that you consider best, and stick to your decision. Indecisiveness just ends up costing everyone involved a lot of time, and money too.

11 CRMs To Start Investigating your Options

These are a few contact management tools out there that deserve your attention if you’re looking for contact management software for a small or mid-size company. The CRMs that currently integrate with PieSync, and let you do a full, bi-directional sync between the CRM and your Google apps, are marked with an asterisk.

Insightly: a contact management, opportunity & pipeline management as well as task management solution for small businesses, Insightly is used by over 650,000 people worldwide.

Streak: a CRM that runs entirely from within your Gmail inbox, Streak can be used in sales, product development, deal flow, fundraising, support and hiring. Plus it’s used by Uber.

Highrise*: a flexible contact management tool, Highrise lets you share contacts with your team, track tasks, set reminders and manage communication. It’s made by a great team with a vision.

One Page CRM*: designed as a sales CRM for small businesses, One Page gathers all your contacts and sales information in one place, with a bullet-proof sales leads follow-up system.

Capsule CRM*: an easy online CRM, Capsule lets you manage contacts, leads, customers, vendors and more. It lets you track bids, deals, proposals, and it links emails back to contacts.

Bitrix24: a full-blown collaboration suite, Bitrix 24 combines a CRM with a social network, tasks and projects, group chat, videoconferencing, online documents, calendars, email, telephony and more.

Podio*: more than a contact management tool, Podio allows you to organize and connect everything you work with. Useful to keep an overview of projects, customers and more.

Pipedrive*: a visual sales CRM for small teams, Pipedrive focusses on your sales pipeline and forecasting. It’s easy to set up and requires no training.

Contact Me: a straightforward tool to easily manage all of your business contacts, Contact Me also tracks your tasks with a to-do list and calendar.

Really Simple Systems: combining sales, marketing and customer service & support, Really Simple Systems also includes a fully integrated email marketing solution.

Nimble*: focusing on the importance of social relationships, Nimble manages your contacts, activities & calendar, information from social channels, emails & messages and deals.

* combine these tools with PieSync, and sync the CRM with any other cloud application such as Google contacts or Mailchimp.

Your favorite CRM isn’t here? Add it in the comments, with a short description of what you like about it.

Ignite Spot's Debunking 9 Common Myths About Outsourcing Accounting Services

2015-02-20T06:33:00.003-06:00

Meghan Fleury Ignite Spot writes: When you hear the word outsourced, your mind might instantly jump to India. You've now fallen for 1 of the 9 common myths discussed in this post. While outsourcing overseas is not a new idea, U.S. based firms are still in their infancy stage. This can lead to a lot of confusion and misunderstanding about what exactly outsourced accounting services are.

Due to this lack of understanding, many business owners believe some misconceptions regarding this service. We're here to debunk 9 of the most common of these myths.

What are the Myths?

Loss of control over company's financials.
Long-distance information isn't secure.
Only large companies can afford to outsource.
QuickBooks should be sufficient.
Outsourcing is a difficult process.
Sending files takes an unecessarily long time.
An in-house bookkeeper is still required.
Costs skyrocket.
Outsourced = Overseas.

Debunking Myths and Taking Names

1. Loss of control over company's financials.

You're the business owner, it's understandable that you're used to being in control. Really, you should be, especially over your company's finances. Recently, the Association of Chartered Certified Accountants released a report that found business owners admitted outsourcing their accounting would cut costs. However, on the flip side, they were afraid they'd lose control over their money.
Many business owners believe that by outsourcing their accounting, they're ultimately giving up the internal control they have. In contrast, by having your books in order, you will actually gain control through a better understanding of your company's financial position. This will help you make the best decisions for your business, placing you at its helm.

2. Sending information to an outsourcing company isn't secure.

This is partially true, but technically speaking, nothing is 100% secure. There are definitely measures that outsourced accountants take to ensure the highest amount of security possible. Wherever you conduct business financials has a potential for security breach. This includes your business office, as well as your home office. Do the best you can on your end to keep your information secure.
At Ignite Spot, we use two programs to digitally retrieve your files with their own built-in security systems to protect your data.

Dropbox- uses cipher encryption for files in transit and at rest. They also perform regular control audits in order to keep your files safe. Read their full security details here.
Podio- uses a system that identifies clients in order to protect their information from unauthorized use. All data transmitted into Podio is encrypted for safe storage. Read their protection information here.

3. Only large companies can afford outsourcing.

This one is absolutely not true. In fact, while we can service larger organizations, our structure was designed with the small business in mind. Contrary to popular belief, outsourcing first became an option tailored to smaller businesses who had no other alternative simply because they couldn't do it all. It has only more recently become an option for larger companies interested in cutting costs. On average, our accounting services save small businesses 40%-60% compared to an in-house accountant's fees.

4. QuickBooks should be sufficient.

QuickBooks is a great tool; we use it heavily here at Ignite Spot. However, many entrepreneurs who decide to hire accounting help often find that they simply weren't using it to its full potential.

Some downfalls of relying solely on QuickBooks:

- It takes the business owner away from the company.
- Business owners are left to guess if they did things correctly.
- Systems will become more complex in business, requiring more advanced QuickBooks skills (and a larger time committment) over the course of a company's life.

5. Outsourcing is a difficult process.
If you've been keeping decent track of your company's records, it should be relatively easy for you to outsource your accounting functions. Generally, it only takes us two weeks to onboard a new client. To get a better understanding of how easy the onboarding process is, we've created a video detailing the transition. Check it out here.

6. Sending files takes a long time.

This depends on how your company is set up. If you're a more tech-savvy entrepreneur, you can simply send your documents electronically and quickly through Dropbox, Podio, or email. You're also able to send them to us by mail, which relies on the standard mail delivery time frame.

7. Outsourcing still requires an in-house bookkeeper.

Our services are designed to take the brunt of the accounting work from your business, freeing you up, as well as your staff. Out of all of our clients, only 2-3 have chosen to continue to use a bookkeeper in-house.

8. Costs can spiral out of control.

Some accounting services bill hourly or by project. This makes the final pricetag unpredictable at times for the business owner. We do our best to keep your costs stable and concise. We have a month-by-month fee system and you'll be informed of your out of pocket expense before even signing up with us. This helpful post explains in detail the types of bookkeeping fees out there and what to look for.

9. Outsourced means overseas.

The term outsourced sometimes has a negative association in the US. Most people instantly start thinking: overseas, job loss, sweat shops, etc. But not all outsourcing services are overseas.

A 1982 study found that domestic outsourcing contributed to 7% of the country's overal GDP. By 2006, that number increased to 12%.
Outsourcing does not necessarily mean overseas and is becoming more popular domestically within the US. At Ignite Spot, we are proud to be a 100% United States based company that offers outsourcing services.

Xero shares rally past $20 NZD

2015-02-20T06:28:00.001-06:00

Tom Pullar Stecker for Stuff.co.NZ writes: Xero shares are trading above $20 for the first time in four months but analysts are scratching their heads over what has driven the price higher.

The cloud accounting software firm received a please explain letter from the NZX yesterday, asking if Xero might be holding back any material news to explain a 15 per cent rise earlier this week. Xero responded that it was not.

Such inquiries usually play out a familiar way, with the company's share price often settling back if they report they have nothing new to disclose. But Xero shares have instead resumed their upward trajectory, jumping 8.1 per cent to $20.35 in trading today.

Woodward Partners analyst Nick Lewis said he had no explanation for the rise, but the volumes traded suggested that small investors rather than institutions were behind the rally.

"Maybe one of the retail brokers either here or in the United States has suddenly got excited about Xero, but that is pure speculation," he said.

"There haven't been any big block trades or any 'new news'."

Forsyth Barr analyst Blair Galpin said yesterday that he also had no knowledge of what might be causing the movement.

Xero held its Xerocon user conference in Britain last week and chief executive Rod Drury said he thought Xero was at a tipping point in that market.

Intuit's (INTU) CEO Brad Smith on Q2 2015 Results - COMPLETE Earnings Call Transcript

2015-02-20T06:19:00.000-06:00

Intuit's (INTU) CEO Brad Smith on Q2 2015 Results - Earnings Call Transcript

Feb. 19, 2015 11:13 PM ET | About: Intuit Inc. (INTU)

Intuit Inc. (NASDAQ:INTU)

Q2 2015 Earnings Conference Call

February 19, 2015 4:30 PM ET

Executives

Matt Rhodes – Vice President-Investor Relations

Brad Smith – President and Chief Executive Officer

Neil Williams – Senior Vice President and Chief Financial Officer

Analysts

Brent Thill – UBS

Greg Dunham – Goldman Sachs

Walter Pritchard – Citi

Sterling Auty – JPMorgan

Ross MacMillan – RBC Capital Markets

Kartik Mehta – Northcoast Research

Raimo Lenschow – Barclays

Brad Zelnick – Jefferies

Gil Luria – Wedbush Securities

Kash Rangan – Merrill Lynch

Jim Macdonald – First Analysis

Scott Schneeberger – Oppenheimer

Jennifer Lowe – Morgan Stanley

Michael Millman – Millman Research

Operator

Good afternoon. My name is Sayeed and I will be your conference facilitator. At this time, I would like to welcome everyone to Intuit’s Second Quarter Fiscal 2015 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer period. [Operator Instructions]

With that, I would now like to turn the call over to Mr. Matt Rhodes, Intuit’s Director of Investor Relations. Mr. Rhodes, you may begin.

Matt Rhodes - Vice President-Investor Relations

Thank you, sir. Good afternoon and welcome to Intuit’s second quarter fiscal 2015 conference call. I am here with Brad Smith, our President and CEO; and Neil Williams, our CFO.

Before we start, I’d like to remind everyone that our remarks will include forward-looking statements. There are a number of factors that could cause Intuit’s results to differ materially from our expectations. You can learn more about these risks in the press release we issued earlier this afternoon, our Form 10-K for fiscal 2014 and our other SEC filings. All of those documents are available on the Investor Relations page of Intuit’s website at intuit.com. We assume no obligation to update any forward-looking statement.

Some of the numbers in this report are presented on a non-GAAP basis. We have reconciled the comparable GAAP and non-GAAP numbers in today’s press release. Unless otherwise noted, all growth rates refer to the current period versus the comparable prior year period and the business metrics and associated growth rates refer to worldwide business metrics. A copy of our prepared remarks and supplemental financial information will be available on our website after this call ends.

And with that, I’ll turn the call over to Brad Smith.

Brad Smith - President and Chief Executive Officer

All right, thank you Matt, and thanks to all of you for joining us. It has been an eventful few weeks at Intuit and I suspect you have lots of questions. Before we get to your questions, I would like to provide as much context around the recent events as possible while keeping the bigger picture in mind. The bigger picture is straightforward. Our financial results are strong through the first half of fiscal 2015 and we are reiterating our guidance for the full fiscal year. Furthermore, our small business momentum has taken a step rate change in a positive direction.

The growth in our QuickBooks Online subscriber continuing to accelerate at a very healthy rate. With that said, I know the tax is on everybody’s mind, given the time of year and the recent press coverage. So let me start there first. At the highest level, our tax strategy is on track. We are in the second year of a multiyear journey to achieve our product vision of taxes are done.

This year’s TurboTax significantly expanded its data import capability. Nearly 75% of customers can now digitally import W2s directly into the product that is up from less than 30% last year. This is a huge step towards our vision if taxes are done, making tax spreads easier and more accurate and this has led to several points of improvement and conversion for customers who choose to import their data.

The TurboTax experience now uses more advanced data driven insights to tailor the interview to your unique situation. We refer this as responsive experience and is saving significant time and questions off of the average taxpayers preparation experience. In addition, TurboTax users can now seamlessly move across platforms, working online on tablets or on smartphones with the ability to start, stop and continue their taxes on the device of their choice.

And for the first time ever Americans with more straightforward tax needs were able to file both their Federal 1040A or 1040EZ returns as well as their state returns for free. This was a powerful offer for this 60 million Americans, many of whom with paycheck-to-paycheck and count on their tax refund as being the biggest paycheck that they will receive in the year.

The collective impact of these innovations is showing up in the customer experience. So far this season, our ability to convert those who visit the TurboTax.com website and to those who file a return is up a couple hundred basis points. This improvement is on top of a big advance in conversion that we drove last year as well.

Our net promoter scores for TurboTax Online are also up about a half dozen points, which is quite encouraging. This improved product experience is helping reduce customer care calls, which were down roughly 20% year-over-year. And when it comes to the Affordable Care Act, we worked hard to ensure that all tax payers could easily and accurately meet the new ACA requirements with TurboTax.

Unlike some other tax services, TurboTax includes all the necessary healthcare forms for free. We don’t see any evidence that ACA is driving TurboTax customers to other tax prep solution. In fact, the ACA section of our product has been one of our highest converting tax topics this year, which gives us confidence that our ACA implementation is meeting our customers’ needs.

Translating the sum total of these initiatives, total TurboTax units grew 11% through February 14 versus the comparable prior year period. TurboTax Online units are up 19%, while TurboTax Desktop units are down 7%, which takes to me the recent events of the past few weeks, which has not been our best in terms of customer confidence. There were no excuses when you make a mistake and we owned our mistakes and taken steps to make things right. At the same time, we’ve been at the forefront of the ongoing battle to fight fraud in the U.S. tax system, navigating lots of misinformation along the way.

Let me share some important context around both of these events. First, let me address the change to the TurboTax Desktop product lineup, which we subsequently reversed. We didn’t live up to our customer expectations and our net promoter scores are down for the TurboTax Desktop product as a result. So why do we make the change in the first place and what have we learned from the experience.

I don’t need to tell anyone on this call that we are in the midst of a massive platform shift of the cloud, and every established technology company is dealing with the balance of serving customers on legacy products while advancing their efforts and serving new customers on the next generation platform. It’s no longer a desktop software world. Our computers no longer come equipped with optical drive and shelf space allocated software is down 50% in retail stores over the last five years. But that said, a subset of customers simply do not want to move to the cloud. Many of these are long-term loyal customers, who have used the same product for 20 years, which is why we've always been steadfast in our position that we won’t push a software delivery model on a customer.

With that context what happened? Well, last year, we had moved to a complexity baseline up in our TurboTax Online portfolio, steering customers to the best offering for their particular tax situation. This included moving Schedule C, D, E, and F from the looks into our premier and our home and business solution. These are the schedules that enable to file or to report items such as investment gains and losses and small business expenses.

Our goal was simplification. So customers were clear, which product was right for their particular tax needs. For over 20 million online customers last year, the implementation went smoothly. So this year, we thought to complete the alignment by making similar changes to our desktop offerings. Our goal was to streamline product development and bring any new innovation from our online product back to our desktop customers as well. And for those who might eventually choose to migrate to the cloud, they would enjoy a consistent and familiar product experience. Good intensions but misinformed.

These loyal long-time desktop customers simply didn’t want a different product experience. And they certainly didn’t want to have to upgrade and pay a higher price for the functionality that they have always had in the looks. In addition, we didn’t make the communication clear enough and we didn’t make the transition easy. For the 3% of TurboTax customers who were affected, it was simply unacceptable and they were right.

So here is what we’ve done. Following a very public and heartfelt apology, we announced that next year, we will offer the TurboTax to looks Desktop software that our customers know and love, restoring all the forms that they've counted on for years. Returning Deluxe desktop customers who need to upgrade this tax season are now able to do so seamlessly within the product for free.

More importantly, what lessons did we learn? First, know the customer. We're a customer back company and we didn't effectively apply our own expertise to this situation. Second, ease to transition; if you're going to make product changes, make sure you have early dialogue with the customers and make the transition slowly. And finally, act quickly and decisively. When you hear noise, assume smoke means fire and jump on the situation fast.

Which takes me to the more recent news surrounding the concerns of increasing fraudulent activity in the U.S. tax system, particularly at the state level. As we have shared on many occasions, the privacy and security of our customers’ data is the top priority in our Company. We've been working for years to apply the most advanced technologies and techniques to ensure the safety and privacy of our customers’ information and we have been doing this in conjunction with the overall industry and with government as well.

I was just in Washington three weeks ago, giving a key note to more than 100 policy leaders on this very topic. In more recently, Intuit and some states saw an increase in suspicious filings. As a result several states communicated their intention to stop accepting TurboTax e-file. So we took the precautionary step on Thursday, February 5th to temporarily pause the transmission of e-file state tax returns for all states.

After our preliminary examination of the recent activities with the help of a third security expert was concluded. We believe and we continue to believe these instances of fraud did not result from security breach of our systems and the information being used to file fraudulent returns was obtained from other sources outside the tax preparation industry.

We implemented targeted security measures to combat the type of fraudulent tax activity that we were seeing. These additional steps included the implementation of more advanced multi-factor authentication, which is a proven technology for protection against identity theft. With these measures in place, we resumed e-filing with the state the next day. Once, we felt comfortable that our customers’ privacy and security were not at increased risk.

And we're continuing to work with the state as they build their own anti-fraud capabilities and we will continue to share best practices as we work towards the common best interest of the taxpayer. To assist any customers, who are victims of tax fraud, we’re providing a dedicated toll free number with direct access to specially trained identity protection agents, who will provide comprehensive support and filing assistance. So to summarize consumer tax, the underlying health of the business and the product innovations that we're delivering are having a meaningful impact on the customer experience and on our result season today.

With that said, we suffered a self-inflicted wound on the desktop line-up situation, and we are leading the battle against an industry wide threat of cyber fraud targeting the US tax system. And all of this happened within the first few weeks of a 100 day tax season. But there is plenty of time left on the clock and if you look at the scoreboard so far, you'll see that the IRS data through February 6th shows that self-prepared e-file growth was up 70%, contrasted with assisted e-files down 4%. This leads us to believe that the do-it-yourself software category continues to gain share.

TurboTax e-file growth and other third party data also indicate that we’re gaining a couple points of share so far this season. So we’re keeping the bigger picture inline and we’re going to emerge from both of recent situations wiser and even more focused. Which takes me to the pro-tax side of the business, where we’re seeing positive early trends and customer acquisition. In addition, we’re delivering more innovation in pro-tax than I have ever seen in my time at Intuit.

We provided tools and training for our pro-customers to manage the ACA situation and to help their clients achieve the best possible outcomes. We’ve refreshed TurboTax Personal Pro, which we used to call CPA Select, and we expect the new interface and the accountants’ engagement tools to drive growth. We’ve launched Intuit Link, a data and document collaboration tool for accountants that save time and simplify the accountants to client communication and we’ve enabled eSignature capabilities that help accountants streamline their work and securely transmit signatures on important forms.

I realize that I don’t need to remind anyone that it’s early in the season for both of our tax businesses, but I will. We’re staying agile and I am very pleased with our products and our pace of innovation. We’re focused on improved execution and delivering for our customers and shareholders for the remaining season.

Now, let’s talk small business. As I foreshadowed earlier, the QuickBooks Online ecosystem continues to build strong momentum. We grew total QuickBooks Online subscribers by 50% in the second quarter that is up from 43% growth last quarter. We added 100,000 QBO subscribers quarter-over-quarter and we now have 841,000 paying subs worldwide. Outside the U.S. QuickBooks Online subscribers were up more than 170% to a 127,000 in line with last quarter’s rapid growth. Our QuickBooks Online customers continue to add payroll and payment solutions at a healthy clip.

In the U.S., our new customer online payroll attach rate was 21%,. This is a step down from roughly 30% last quarter, but it’s due to a change from an opt-out payroll signup to an opt-in. We expect our attach rate to be in the low 20s over the next few quarters but we expect to see improvements in retention as a result of this change. Our online payments attach rate was 8%, which is up from 7% a year ago.

To help fuel our international growth, we made two acquisitions in the past quarter that will add key features and functionality to the QBO ecosystem and targeted geographies. In the UK, we acquired Acrede, a provider of payroll solutions with global compliance and data security. They are easy to use cloud technology can be customized to deliver payroll across multiple geographies. We also acquired ZeroPaper, a developer of fast and mobile financial management tools for entrepreneurs and micro businesses in Brazil.

In addition to these acquisitions, we launched QuickBooks Self-Employed, designed specifically for the rapidly expanding population of freelancers and independent contractors. As you may recall, there are roughly 12 million of these businesses in the U.S. Our QuickBooks Self-Employed Solution helps the smallest of small businesses, manage their finances throughout the year, and provides integration with TurboTax to simplify tax reporting.

These sole proprietors generally don’t see a need for all the functionality and traditional QuickBooks online. They simply need to keep their personal and their business expenses tracked and separated for tax time. This product is gaining real momentum and I’m excited about the partnerships we recently announced with Stripe, Uber, Lyft, TaskRabbit, and others all centered around this particular market. We’ll continue to add partners to expand our presence in this rapidly growing on-demand services marketplace. So in total, it’s been an eventful first half of the year and it has been a strong first half as well.

I’m inspired by our team’s commitment to overcome obstacles, while continuing to reimagine the tax prep experience in both our consumer and our pro-tax businesses and you’re going to see much more innovation from these teams over the next few years. On the small business half of the house, our small business subscriber growth is accelerating and we remain focused on global customer acquisition, all being powered by cloud-based services.

With that overview, I’m going to turn it over to Neil to walk you through the financial details.

Neil Williams - Senior Vice President and Chief Financial Officer

Thanks, Brad. First, I'll start with overall company results, which all came in higher than our guidance. For the second quarter of fiscal 2015, we delivered revenue of $808 million, up 3%, a non-GAAP operating loss of $20 million, a GAAP operating loss of $98 million, a non-GAAP loss per share of $0.06, and a GAAP loss per share of $0.23. These factors reflect our strategic decision to deliver ongoing services and releases for future desktop offerings. As a result, revenue for future desktop software licenses will be recognized as services are delivered rather than up-front.

As we discussed previously, approximately $400 million in revenue will move out of fiscal 2015 into later years. The impact and quarter seasonality of this shift varies by business unit. The business with a shift is hardest to understand from an external perspective is probably professional tax. I’ll provide some data to help with modeling of the pro-tax business in a moment.

Turning to the business segments. Total small business group revenue declined 1% for the second quarter. Again reflecting the impact of changes to the desktop product resulting in ratable, rather than up-front revenue recognition. QuickBooks total paying customers grew 20%. Small business online ecosystem revenue grew 26% and customer acquisition in our online ecosystem continues to drive growth. QuickBooks online subscribers grew 50%, accelerating from last quarter’s growth rate. Online payroll customers grew 23%, online active payments customers grew 3%, and online payments charge volume grew 20%, driven by an increase in charge volume per customer. Payments customers attached to QuickBooks Online grew over 90%. We’re focused on growing payments in the QBO ecosystem while de-emphasizing other services such as standalone GoPayment’s customers. Rounding out the online ecosystem, Demandforce customers grew 18%.

Our primary goal is converting non-consumption to capture a larger share of the 29 million small businesses in the U.S. and millions more around the world. To do this, we’re leaning into QuickBooks Self-Employed which is part of our QuickBooks Online lineup as – and is included on the QuickBooks Online Subscriber line on the fact sheet. We had approximately 4,000 QuickBooks Self-Employed paying subscribers at the end of the second quarter. We’ll continue to call out the growth of this subscriber base over the next few quarters.

Moving to the desktop ecosystem, QuickBooks desktop units declined 26% in the second quarter as we continue to emphasize QuickBooks Online. More than 80% of our new QuickBooks Online customers are new to QuickBooks rather than migrating from desktop. Within the consumer group, consumer tax revenue was up 54% versus the second quarter last year as we benefited from an earlier start to the tax season this year. As you may recall, last year IRS opened e-file on January 31, pushing revenue into our third fiscal quarter, so this year we’re returning to a more normal seasonal pattern.

Our strong unit growth today benefited from our Absolute Zero Promotion, and our paid mix was also a bit better than we expected. In the back half, we face a tougher compare, but we still expect units to grow faster than revenue for the season. ProTax revenue was $11 million, down 69%. As we previously discussed, we expect a revenue shift of $150 million from fiscal 2015 to fiscal 2016 due to changes in our desktop offerings. To help with your modeling, we expect ProTax revenue of about $125 million in the third quarter of 2015 and about $100 million in the fourth quarter.

We continue to take a disciplined approach to capital management, investing the cash we generate in opportunities that yield an expected return on investment greater than 15%. With approximately $1.4 billion in cash and investments on our balance sheet, our first priority is investing for customer growth. We also look for inorganic opportunities, and in the second quarter, we competed two acquisitions, bring us to a total of four transaction so far this fiscal year, totaling approximately $90 million.

We’ve also repurchased $555 million of shares in the second quarter with about 1.2 billion remaining on our share repurchase authorization. We intend to be in the market consistently during the year. Our board approved a $0.25 per share dividend for our fiscal third quarter, payable on April 20th. This represents a 32% increase versus last year and reflects our large and growing cash position as well as more recurring and predictable revenue streams.

Looking ahead, we have reiterated our financial guidance and raised our QuickBooks Online subscriber guidance for fiscal 2015. We also provided guidance for the third and fourth quarters and you’ll find our guidance details in the press release and on our fact sheet. As a reminder, we will provide our next tax unit update in April, soon after the tax season ends.

And with that, I’ll turn it back to Brad to close.

Brad Smith - President and Chief Executive Officer

All right, thanks Neil. I know we’ve taken sometime here to cover a lot of turf, but I hope it’s been helpful context in advance of your questions. We have a lot of opportunity in front of us and at the end of the day, it all comes down to great people and I like what I see in our company’s culture and in our employees. It is truly my privilege to be able to serve alongside them each everyday.

So with that, let’s open it up to you to hear what’s on your mind, Sayeed?

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Our first question comes from Brent Thill from UBS. Your line is open. Please go ahead.

Brent Thill - UBS

Good afternoon. Brad, on the tax side, you mentioned the conversion rate went up year-over-year. I’m just curious if you could give everyone a sense of what that conversion rate is today and what do you think you can do to continue to drive those conversion rates going forward?

Brad Smith - President and Chief Executive Officer

Yes, Brent, thanks for the question. First of all, we would like to wait till the end of season and then at Investor Day we will share with you the year-over-year comparison and conversion rates and one of the reasons we want to do that is we’re getting better every week. One of the things I mentioned in the opening remarks is the responsive experience, which is our ability to actually look at the kinds of information that we can see in your tax return and compared to others like you and truly streamline the interview process. And so that’s enabling us to get more conversion out of people who are coming in and starting to return and getting them all the way through the end where they actually hit the send button.

The other thing that we’re able to do here is we’re looking for areas where there were historical problems with entering data and then with the electronic import capabilities that we continue to advance. We’re getting a lot of that work done for you so reduces friction and it is a combination of those things, which we call the taxes are done, which is really improving our conversion and I will tell you the teams truly are making improvement week over week and we will see how we finish up the season.

Brent Thill - UBS

Great. And just real quick for Neil, given some of the renewed focused on the cyber issues that are going on in the industry, there is certainly been a lot more investments that the companies have been having to make to protect themselves. I would assume given you haven’t changed the year on the bottom line that many of these increased investments around the cyber trend there are included in your guidance?

Brad Smith - President and Chief Executive Officer

Yes, Brent, clearly that is a very important issue for us and so we are providing all the funding that we need in those areas. Anything that was not included in our guidance for the full year, we expect to reallocate from other investment opportunities within the company. So we have given a lot of thought and consideration, before we reiterated guidance for the full year.

Brent Thill - UBS

Thank you.

Operator

Thank you. And our next question comes from Greg Dunham, Goldman Sachs. Your line is open. Please go ahead.

Greg Dunham - Goldman Sachs

Hi, yes. Thanks for taking my question. One more on tax, I mean clearly the numbers surprised as to the upset, especially given some of the bad press that we’ve seen in the market. Can you talk to whether or not that actually has been head wind to the business? And if it has what has more than offset that you mentioned conversion. But what are some of the other areas or we are just assuming that the headwind on some of the bad press is just overblown? Thanks.

Brad Smith - President and Chief Executive Officer

Well, Greg, first of all we are not Hollywood and so unlike Hollywood for all PR is good PR. We certainly don’t like to have negative press out there about our product or have any of our customers frustrated. I think the first piece is the desktop lineup changes, we knew we made a mistake when we started hearing the feedback from the customers. But it’s important to understand that affected 3% of our TurboTax customers. So while the noise was out there and the press coverage was pretty strong, it really wasn’t a significant number of customers. And we worked really hard to get in touch with each and every one of them and to they make it right.

And so I’d say first of all the scope of that wasn’t a significant as the press may have played it out to be. But from our perspective we took it very seriously, because every customer matters. And the second is on the industry-wide threat of cyber fraud attacking U.S tax system. This has been an industry-wide challenge. It is not a company specific challenge, despite some of the early press clippings, whether you look at our own competitors issuing open letters from their CEO and major newspapers. Or you know the IRS has been working with the industry since 2012 to solve this or even the state of Montana issuing in some press release last week, saying, hey this is happening to more than one company.

I think most people understand that we are progresses, we are applying the most advanced techniques and at the end of the day they trust into it that we are going to process their information and protect the privacy and security. So I think the important thing here is the issue of cyber fraud is a threat to the tax system. We’re one of the many players that want to be a part of the solution, but you have to separate the signal from the noise. The press is not representative of what we’re seeing and as a result I think what you’re actually seeing in our business results, our customers trust our brand, our product is even much better than it was last year, so we’re improving conversion and that plays out in the marker place and that’s why you see stronger tax results then maybe what the press might may have led you to believe.

Greg Dunham - Goldman Sachs

Great, thanks Brad.

Brad Smith - President and Chief Executive Officer

All right. Thank you, Greg.

Operator

Thank you. Our next question comes from Walter Pritchard from Citi. Your line is open. Please go ahead.

Walter Pritchard - Citi

Thanks, Brad, I’m wondering on the – you had a nice acceleration in the QuickBooks Online subscribers and you added about 100,000 in your guidance for the third quarter actually assumes you fewer than 100,000. If I look at prior desktop seasonality, back when it was a pure desktop business, you’d actually see a nice pickup from Q2 to Q3 in terms of subs. I’m just wondering is the seasonality change or is there some factor that you think drove Q2 that is a repeatable as we look into Q3 for sub adds.

Brad Smith - President and Chief Executive Officer

We know that each of our businesses do have cycles to them and in small business we do see a larger group of people buying heading into the New Year. And then it tends to tail off a little bit into the latter half of that, our fiscal year, so heading into the spring and summer. The desktop will throw you a little bit out of whack there QBO was more of a realtime consideration and you have a mix today of more service based businesses, because we’re still building out advanced inventory to the mix of the kind of customer and QBO is slightly different than desktop.

But right now what you are going to see is – we’re still in the early learnings of just how big QBO will be in each of the quarters. This is our best forecast for the fourth quarter and it really reflects the slightly nuance differences and the service based customers in QBO versus more inventory based in desktop and the second is there is a seasonal pattern to win the peak periods are for QBO, just like there is and some of our other businesses.

Walter Pritchard - Citi

And just Brad, a follow up on that. So you given a number I think out of fiscal 2017 of two million subscribers and you talked about – about two thirds I’m sorry three quarters of those coming in though new customers and I’m wondering if what you learned in the second quarter especially on that last part the mix of customers coming in new versus installed based conversion, if there is any change in your view in terms of the long-term?

Brad Smith - President and Chief Executive Officer

At this time Walter, we’re not changing that long-term view, that two million subs, our aspiration is not only to meet that but to exceed it. We’re continuing to see strength in new to the franchise customers and this particular quarter 80% of QBO customers were new to the franchise; about 20% were migrators from desktop. We’re doing everything we can to get desktop customers comfortable, we’re adding that advanced inventory capability, or continuing to finish off things like job casting, we’re running promotion, but as you learned from the TurboTax desktop experience I just walked through.

Some of these customers aren’t going to be move in anytime soon and we’re fine with that, what we really like to see is we’re expanding the category, we’re getting new people into accounting software that never even used our product before. So right now, we are locked in on that 2 million number. And we just raised our forecast on subs this year. So we are not moving that 2 million yet. But if we continue to close in the way we are, we’ll talk to you about that in the future.

Walter Pritchard - Citi

Great. Thank you very much.

Brad Smith - President and Chief Executive Officer

All right. Thank you.

Operator

And our next question comes from Sterling Auty from JPMorgan. Your line is open. Please go ahead.

Sterling Auty - JPMorgan

Yes, thanks. Hi Brad, you mentioned the ACA was not causing TurboTax users to leave to tax prep. I think the bigger concern that I hear from investors is whether you install to share shift in DIY. Given your prepared remarks it sounds like that is not the case I’m kind of curious if that just where we are in this part of the tax season and maybe that changes or is there something that you’re seeing that the ACA just isn’t having any impact on that, kind of category shift.

Brad Smith - President and Chief Executive Officer

Sterling, it’s a fair question. And I think it’s still out there for many to think through. Our assertion from early on if you look to what happened in Massachusetts back in the days when Romney was governor. There was no shift between tax prep methods when a light program was introduced at the state level so our hypothesis was if we do our job, and we take the complexity and make it simple. This should not be a catalyst to the assisted category. And we worked really hard to do that.

I think, the second thing is, we do know that as you go further end of season, you will see the assisted tax prep methods start to pickup a little bit as more complex returns get processed. But right now, this is about where we were this time last year with the assisted category growth through February 6 reported by IRS and then also where the DIY category was. And at the end of the season, the DIY category picked up a little bit of share. So I believe we are going to see the same thing happen this year.

My last point I would say is, we anticipated, if there was going to be a big impact that ACA would impact earlier in the season. Because when you look at those, you don’t tend to have health insurance, there are often times those families that are living paycheck to paycheck they need to file early to get their refund. And the fact we haven’t seen the kind of shift that some of the industry we’re suggesting was going to happen, leads us to believe that our original hypothesis looks like it’s going to play out. We don’t expect this to be a catalyst. But we also were prepared to respond if anything changes based upon that, the balance of the season.

Sterling Auty - JPMorgan

Okay. And then just one follow-up and you touched upon in your answer there. Can you help us understand given the timing differences on when returns are starting to be accepted et cetera. We end up with a lot of numbers over different periods of time. So lot of apples and oranges kind of reiterate for us what you think the tax season growth will be for the tax business? And kind of what the results that you just reported meanings in terms of hitting those goals?

Brad Smith - President and Chief Executive Officer

Yes, Sterling. Also two things here IRS data through February 6, reported the category the self prep DIY category, digital category with that seven and system is down four.

If I take our numbers and right now we reported the February 14th, if I move them back and make them apples-to-apples, the number of e-filed returns we submitted through the same date the IRS put their data out, we’re up 13%. So right after that, you can just do the math and say, okay, we’re growing 13, the categories growing 7, it looks like TurboTax is picking up some share. And that’s kind of where we were last year too.

If you step back and look at our assumptions for the full season, our forecast were based upon the IRS total returns growing about 1% and right now that’s what the IRS has reported so far through February 6. The second as we anticipated that the do-it-yourself category would pick up about a point of share out of the total returns filed. Right now through the results of February 6th, it’s up almost 3 points. So it’s a little bit higher than that, but we know it works through the balance of the season, it does start to shift a little more to assisted, so that'll come down a little bit if history plays out.

The third lever we assumed is that we would pick up share and so far the data suggest that we picked up several points of share, but we also know we came off of a very exciting program called Absolute Zero. So we’re going to say if we can hold our ground for the balance of the season and the last pieces revenue per return. We fully expect the customer growth will outpace revenues. We don’t expect that to be a big catalyst and that adds up to the 5% to 7% total guidance we gave for consumer tax. I know there is a lot in there, but I hope that parse the numbers out and gave you apples-to-apples of us versus the IRS and then what our assumptions were.

Sterling Auty - JPMorgan

That was perfect. Thank you guys.

Brad Smith - President and Chief Executive Officer

You’re welcome.

Operator

Thank you. Our next question comes from Ross MacMillan from RBC Capital Markets. Your line is open. Please go ahead.

Ross MacMillan - RBC Capital Markets

Thanks a lot. I have two, so first on consumer tax, a lot of price changes this year across the portfolio. And Brad you’ve said a couple of times, you expect units to grow faster than price,. But by my math so far this season it looks like revenue per unit is a bit higher than last year and I’m a little surprised that just because you’ve obviously got the Absolute Zero program going on. Any comments on that – is my math right and any thoughts around that so far?

Brad Smith - President and Chief Executive Officer

Ross, your math is right. As Neil was going through his opening comments, he said not only we have an exciting program with Absolute Zero, but our actual paid mix is higher than we had forecasted. A part of that is driven by the complexity base lineup we move to last year where we were trying to help customer to get into the right product. And so in TurboTax Online that’s actually helped us to get customers to the right product. And as a result our paid mix is healthier. People are getting to the Deluxe and the Premier versions of the product, which is where they should have been all along.

And that’s one. Another one is just simply conversion and attach as we continue to make it more seamless and you’re able to find services that are important to you. We’re able to make that mix healthier as well. So those two things are adding to slightly higher revenue per return at this point in the season, but as you know, we still got about 60% of the season yet to go. And so we’re going to see how the ultimate assumptions play out when we’re done on April 15.

Ross MacMillan - RBC Capital Markets

That’s helpful. And then just a quick follow-up on the small business side obviously with the introduction of self-employed and as you are pushing into international markets, there going to be quite different dynamics around ARPU or revenue per subscriber. Just from a big picture standpoint, how would you have us think about that as we progressed through this transition because I think right now you still got that ARR number on small business online ecosystem growing at a pretty nice clip.

Brad Smith - President and Chief Executive Officer

Yes, Ross, I want to let Neil take that. I want to Batman to have a chance to speak here. I tend to halt the airways, so we’ll turn it to Neil on this one.

Neil Williams - Senior Vice President and Chief Financial Officer

Yes, so you’re right Ross. I mean as you look at the self-employed product rolling out and products growing globally where we have less attach opportunities, you’re going to see the ASP be slightly coming down for QuickBooks Online ecosystem overall. We modeled all that in to the lifetime value equation we shared with you back at Investor Day and we’ll update as we get in at the end of this year. We’re closely monitoring how different things are impacting that as you heard us talk about on the call today. We like what’s happening with the tax particularly in the U.S. We made some acquisitions that will help us get to payroll faster outside the U.S., which will help those assumptions.

And we’re waiting to see how well we do with the self-employed product that we’re excited about this point, but it’s still very early days. So the short answer to your question is that the lifetime value equation that we gave you back in Investor Day last year is still good at this point and we’re assessing as we go through each quarter the puts and takes and we’ll update that for you at the end of the year and kind of show you how it migrates from one to the other, but look for higher attach rates in the U.S. improved retention to mitigate some of the downward pressure you would see outside the U.S. where you don’t have the same attach opportunities and our product like QuickBooks Self-Employed, which clearly has a lower ASP and lower attach opportunity more likely than the traditional QBO product.

Ross MacMillan - RBC Capital Markets

That’s very helpful. Thank you.

Operator

Thank you. Our next question comes from Kartik Mehta from Northcoast Research.

Kartik Mehta - Northcoast Research

Hi, Brad and Neil. Brad, you talked about your desktop customers about 3% being impacted by the changes. So do you think the decline you saw in desktop 7% is the majority of that just people transitioning to online? Or I guess how would you parse out kind of the changes and then clients impacted versus transitioning to online?

Brad Smith - President and Chief Executive Officer

You know, Kartik, if you look at the last five years of TurboTax desktop, the average has been a 3% decline, but two of those five years, the desktop was actually down about 6%. So it’s happen to be the two years where there’s a delayed opening to tax season, so it ramps up a little bit later. But I would tell you our 7% decline season today is reflective of just an ongoing secular trend that people moving out to desktop to the cloud and it’s probably in that 3% to 4% range and the rest of it honestly I think was just the result of us having made a bad decision on a desktop line-up and we’re going to have to work hard to earn those customers back. And so that’s the truth of it about half of it is secular shift to the cloud and the other half is a self-inflicted wound that we're going to fight for and try to get those customers back.

Kartik Mehta - Northcoast Research

And Brad on the QBO side you said – I believe you said 80% are new to the system. As you look at those customers, are they new businesses or they existing businesses that are now switching over to QBO?

Brad Smith - President and Chief Executive Officer

It’s a combination of both. New to the world businesses are finding it a lot easier to come in now and get up and running from any device they want to use including a tablet or a phone. And the other our existing businesses that historically have been using Excel spreadsheets. And so, it’s really a mix of complete new to the world and then those are new to the category.

Kartik Mehta - Northcoast Research

And just one last question, Brad. Have you seen a change at all in your cost to acquire QBO clients based on the type of customers you’re getting and maybe if you see another competition out there?

Brad Smith - President and Chief Executive Officer

We continue to see an improvement in our cost to acquire customers. As the accountants are getting more comfortable with QBO, the new re-imagined version, they’re recommending it and of course that recommendation leads to a faster, yes, from the small business side. We’re also getting better SCO and SEM and so ultimately our direct channels are more efficient and our account referrals are building [indiscernible]. And outside of the U.S. as were in each of the countries we are in brand building mode so the cost of acquire is more expensive in those countries but on a quarter by quarter basis, we’re seeing the efficiency come in there as well. So you put it all together and our cost to acquire is getting more efficient regardless of the competitive dynamic in any of those countries.

Kartik Mehta - Northcoast Research

Thank you very much, Brad. I appreciate it.

Brad Smith - President and Chief Executive Officer

All right, thank you Kartik.

Operator

Thank you. Our next question comes from Raimo Lenschow from Barclays. Your line is open, please go ahead.

Raimo Lenschow - Barclays

Hi, thanks for taking my question. I wanted to stay on QBO. You have seen an acceleration of subscribers – of subscriber growth ever since you launched in your harmony of product. And how do you think about where that is going to max out what are the puts and takes to say like okay 50% of something, we think it’s good or can it go to 60% or 70%. I mean just – you know at some point, we’re going to hit kind of a number where you won’t accelerate and I just want to kind of be ready for that. And then also can you talk a little bit about the international business in terms of what are the stronger – which countries did you like and where the performance could have been better? Thank you.

Brad Smith - President and Chief Executive Officer

You’re welcome. I wish that I had answer for your first one. I’d like to know when that’s going to max out too, not because I am anxious to get there, but I just want to see if we can blow past. You touched on it. We’ve had half dozen quarters here. Now, we’re continuing to accelerate quarter over quarter and we’re feeling very good about the trajectory. So right now, I can’t tell you that we’ve got a flat line that we drawn out because we think we’ve got a lot of opportunity ahead of us as we’re expanding the category, I wish that could be more helpful on that one.

At global markets right now, with the acquisition we just made of ZeroPaper in Brazil that takes us into a new country that is now our sixth country, so we have Canada, the UK, Australia and India, before we’ve been talking to you about historically. We mentioned at Investor Day, we were doing a Greenfield launch in France and now with the acquisition of ZeroPaper in Brazil. In terms of the country, these one have had different characteristics. The Canada business is rocking and rolling. It continues to grow more profitable. As we look at the UK that is a very competitive market right now with many players over there, some established, some new. We continue to accelerate our quarter-over-quarter performance, but we still have work ahead of us to get into the number one position in that market.

In Australia, of course, that is – somebody else’s home court. And so we’re there in an aggressive fashion to show that we can play in the most contested battlefield there is. And so far that has been our fastest growing market – by the fact you would expect that to be in the place where we’d have the most hostile environment. India is Greenfield. We’re truly creating the cloud category there because almost everyone there is desktop and quite frankly many of the products have a DOS like feel to them. And so we’re currently trying to create the category and get people comfortable at the cloud in India. France and Brazil are going to be our newest entries and right now we’re in the early learning phases there.

One we’re doing organically, where we’re taking QBO and we’re literally localizing it and then rolling out in the market and in Brazil we’re doing it inorganically with ZeroPaper. And so each of the countries has a different set of characteristics. You put them all together and we’re growing 170% and we’re felling very good about our global trajectory and the fact is that we’re getting more efficient than our cost of acquire each and every quarter.

Raimo Lenschow - Barclays

Alright, thank you.

Brad Smith - President and Chief Executive Officer

All right.

Operator

Thank you. Our next question comes from Brad Zelnick from Jefferies. Your line is open. Please go ahead.

Brad Zelnick - Jefferies

Great, thanks for taking my question. Brad turning back the clock to February 6th on tax, it’s nice to see you’re taking share based on that 30% growth in returns that you have shared. Do you have any insight or thoughts on where the shares is coming from even just broadly weather from the larger or smaller competitors?

Brad Smith - President and Chief Executive Officer

You know Brad, we really don’t at this point. None of our competitors as well tax act did report as a part of Blucora, but there wasn’t a lot of data that was shared there. They kind of reiterated their guidance for the season. The other major competitor is not going to be reporting until I think March. And so once they get their data out there and then we have [indiscernible], we’ll be able to have a better way to triangulate, but today I would tell you – it was just be speculation on my part.

Brad Zelnick - Jefferies

Okay. That’s fair enough. If I could follow-up with one more on the change in new QBO payroll attach, going from an opt-out to an opt-in model. Could you maybe just give us a little more color why the change and talk about the impact of the bigger picture?

Brad Smith - President and Chief Executive Officer

Yes, sure. I can Brad. What we try to do is, make it very seamless for you to come in sign up for QBO and have payroll included. What ended up happening is a portion of customers would come in and they would find in their first bill that they were paying for payroll. And in many cases, they didn’t have a need for payroll, if they didn’t have employees or they were using in other service and it became a point of frustration for them, they would drop customer care calls or in many cases they would just cancel their subscription. And so what we realized was, we weren’t clear enough and it was confusing. So instead, what we done is, we move to an opt-in model.

We’re based upon certain moments in needs, you’re adding an employer, and you’re going into the employee tab we are able to basically make it more elegant to say, hey, do you want to have this payroll service. What we are seeing right now is, we’ve got cohort analysis and we are actually seeing an improvement in our retention. The couple of 100 basis points, and that’s one of the biggest leverage you have in a subscription business is improving your retention. And while we’re taking a step back because I think we had a false positive when we were out there in that 30% range of attach. We’ve taken a step back into the lower 20s. We’re actually improving the retention and we think that’s going to add up to a much healthier franchise over the long-term.

Brad Zelnick - Jefferies

Thank you so much.

Brad Smith - President and Chief Executive Officer

You’re welcome.

Operator

Thank you. Our next question comes from Gil Luria from Wedbush Securities. Your line is open. Please go ahead.

Gil Luria - Wedbush Securities

Yes, thank you. I wanted to ask about the impact of the true zero promotion. Have you seen a higher percentage of your online TurboTax filers in the promotion versus last year. If I’m not mistaken, the promotion lasted a couple of weeks longer this year. And in obviously went down from $15 to true zero, of the $15.2 million TurboTax Online use of this year was a higher proportion – in this proportion within the promotion versus of $13.6 million from last year.

Brad Smith - President and Chief Executive Officer

Gil, the answer is more than last year. But the paid mix is healthier than we had forecasted. So we actually got the best of both worlds. I was looking at the analysis – Neil and I sat down with tax team on a regular basis as you might imagine free tax season and they are showing us the source of the new customers. And the two biggest franchise year-over-year, which are really encouraging, our first time filers people who never filed tax returns before, and then first time moving into the category.

And those are basically both saying we are expanding the DIY category of this kind of offering. And so I think this is really exciting for us because we know we can get a customer in the franchise and we can actually monetize them and grow the lifetime value if their tax situation becomes more complex. So right now, we are seeing not only a better – a conversion than last year in terms of people coming on the promotion but our paid mix is healthier than we thought as well.

Gil Luria - Wedbush Securities

Got it. And then on the – in the fraud situations did you find that those customers that were affected by fraud that somebody else filed under their information that the attrition there was higher than the rest of population was that a significant factor?

Brad Smith - President and Chief Executive Officer

It wasn’t and I tell you why first of all I want to make sure that I will clear in the opening comments that the headline here is our customers know they can trust Intuit. There is nothing we take more sacred in the privacy and security of their data and two things are fact today one is we’re up and running and processing returns in the federal and all the states and the second is there is no breach of Intuit systems. And that is not only the result of our own analysis but outside third-parties have coming in and run all their diagnostics with us.

And we’ve reached that conclusion I think with the customers the thing that they appreciate if they’ve actually been the victim of having their ID stolen from one of these other high-profile sources that we’re all reading about in the newspaper. And in fact last week in Stanford University I tend to the Cybersecurity Summit with President Obama and others.

Over 100 million identities have been stolen in the last 12 months that’s people walking around with somebody else’s Social Security Number and they were attacking the U.S. tax system and trying to file these returns, and so customers understand that this is broader and what we’re doing is we’re helping them navigate the process we’re getting them access the agents who can help them get their filing done for them. And so it’s not causing an attrition issue because they recognize this is in a particular product issue this is a systemwide problem and they were appreciating the help. So we have not seeing an increase in attrition due to that particular issue.

Gil Luria - Wedbush Securities

That’s great. Thank you.

Brad Smith - President and Chief Executive Officer

All right, thank you.

Operator

Thank you. Our next question comes from Kash Rangan from Merrill Lynch. Your line is open. Please go ahead.

Kash Rangan - Merrill Lynch

Hi, thanks for my question. Brad with respect to the new user attach rates I know you mentioned that due to a different changing with – different methodology the numbers looking little different. But can you talk to how this trajectory should continue so as to enable you to hit or exceed your goals for the long-term are we looking at a hockey stick type trajectory or do you think that the trends so far a more normal progression towards the attach of payroll and payment. So you can hit your ARR objectives longer term?

Brad Smith - President and Chief Executive Officer

Yes, Kash, we do see a continuation of a normalized attach rate we put in our prepared remarks that our payroll and QuickBooks Online we anticipate will be in the low 20s in the next few quarters. We see that moving up into a healthier mid 20s and beyond as we get pass the next few quarters. But we also see a corresponding offset which is an improvement in retention. And as a combination of those things that will drive lifetime value when we step back and we look at the payroll and the payment attach rates for new users in QBO and then you look at the penetration opportunity against the base.

We really do see opportunity ahead of us and we continue to see that increasing and improving quarter-over-quarter. So aside from these next few quarters of payroll as we have to grow over this opt-in, opt-out saying we do see a continuation of strengthening attach rates for our payroll and payments products which lead to that lifetime value assumption we’ll share with you at Investor Day.

Kash Rangan - Merrill Lynch

Got it. With respect to the desktop QB product are there any plans to at least curtail development offer if not curtail selling of it completely and going to a maintenance mode at this point so we can get the customer base to slowly shift to the online?

Brad Smith - President and Chief Executive Officer

I was born at night but not last night and coming off of the TurboTax desktop challenge that we just had I’ve learned a pretty important lesson there which these customers are happy with their product we have committed to making sure that if they want to stay on the desktop we’re going to support them for as long as they want to use that product. But we’re going to make it really enticing for them to get to the cloud but we have zero plans to sense of the product or to do anything that will upset them and make them decide to shop someplace else. And I didn’t mean to be flip I meant to be self critical which has make a lot of mistake that’s okay make two mistakes and somebody ought to slam my hand in a door.

Kash Rangan - Merrill Lynch

I appreciate the candor and finally maybe I missed this about six months back. Did you share an ARR goal for the online business longer term fiscal 2017 or 2018 and if you did I look at it but if you didn’t I would love to hear your thoughts on that. Thank you.

Brad Smith - President and Chief Executive Officer

No, we did not Kash, we shared an outlook for company revenue which fairly is the QuickBooks Online revenues of portion that we did not get more specificity around the overall revenue guidance number.

Kash Rangan - Merrill Lynch

Okay got it. thanks a lot guys.

Brad Smith - President and Chief Executive Officer

All right, Kash thank you buddy.

Operator

Thank you. Our next question comes from Jim Macdonald from First Analysis. Your line is open. Please go ahead.

Jim Macdonald - First Analysis

Hi, Good afternoon, guys.

Brad Smith - President and Chief Executive Officer

Hi, Jim

Jim Macdonald - First Analysis

Hey, looking at the February 14th tax dated at that point do you think the impact of a delayed filing last year versus this year is washed out and then I don’t know if you can quantify the effect of your Absolute Zero program do you think in that data?

Brad Smith - President and Chief Executive Officer

Yes, Jim, our assumption is that the effect of that delayed filing last year and where we’re now its pretty much washed out at this point. We’ll have to see full season how everything shakes out but that’s definitely what we’re operating from in terms of the Absolute Zero promotion we like the results so far we’re going to wait till the end of the tax season and we’ll look back and say did it achieve everything we thought it would. But so far the early data suggesting very positive for us and we like the impact of the new franchise new to the world filers coming in we like the fact people are moving into the category for the first time. We like the fact that the categories expanded and also that looks like we picked up a couple points of share and all of that was still improving our paid mix. So far, so good, but we want to wait for the full season effect to see, ultimately what the impact was.

Jim Macdonald - First Analysis

Great and then – down in Brazil on ZeroPaper. What are your plans about using their product versus – will their product become effectively QuickBooks Online down there. What are your thoughts on how that will work in Brazil?

Brad Smith - President and Chief Executive Officer

Yes, Jim, Brazil is a unique market they have those notion of something called [indiscernible] and it’s sort of like an invoice here, the payment methodology and then you can convert that invoice into cash and that’s was ZeroPaper has done, it’s really for what we’re doing here with QuickBooks Self-Employed it does micro businesses, but down there it’s a tool that micro businesses need to do to basically get paid. And so what we’re going to be doing is taking the product and then importing it over on to the QBO platform and think of it in Brazil becoming the entry level skew and then eventually that will lead out to our more main line QuickBooks Online product. So it will remain in market, it is a Brazil specific product, but that’s a rapidly growing economy with a lot of opportunity and we’re going to put it on our platforms, you can naturally unlock and grow into QBO overtime.

Jim Macdonald - First Analysis

Great, thanks.

Brad Smith - President and Chief Executive Officer

Alright, thank you.

Operator

Thank you. Our next question comes from Scott Schneeberger from Oppenheimer, your line is open. Please go ahead.

Scott Schneeberger - Oppenheimer

Thanks Steve and Brad. Just curious on the desktop, the pricing change obviously didn’t go as you had planned and that was one of the things that was probably going to subsidize Absolute Zero. I’m just curious you guys have obviously reiterated the revenue guidance for consumer tax. So I’m curious Brad how confident are you at this juncture of the year, we know it affected 3% of TurboTax customers and we saw our volume impact. But just on revenue per return, obviously you have a lot of moving pieces, so was that a headwind and you mentioned earlier some positives on revenue per return. Could you just compare and contrast these at this juncture. Thanks.

Brad Smith - President and Chief Executive Officer

Yes Scott, so we’ve seen some puts and takes so far in the season. The take was we reversed our decision and we’ve give the customers the upgrade for free and that does account for some revenue that we would have originally had in our forecast, the flip of that is at Neil said even with that absolute zero we’ve had a healthier paid mix than what we had in our forecast. So when you put it on the blender, it’s comes out to us having the confidence to sit with you today and based on what we see reiterate our guidance for the full year. And I think it’s really just the combination of all these things.

Scott Schneeberger - Oppenheimer

Great thanks and then a following-up with regard to strategy and I guess we have to see at this year completes but just on going to free state with free federal. Is that something you feel that you can reverse out in the future or now that you’re there, is it something that you think is a permanent thing?

Brad Smith - President and Chief Executive Officer

Well, we’ll certainly take a look at how the program played out at the end of the season and if it’s an effective program, then you will see us continuing to do things that we think makes sense for customers and makes sense for our strategic goals which is growing the category and our share. If it’s not a successful program, we have found that you can make the kind of changes and those kinds of promotions year-over-year and customers understand. So at this time point it’s pretty premature for us to speculate what's going to happen with that absolute zero next year next year, but so far we like the results given where we’re in the season.

Scott Schneeberger - Oppenheimer

Great, thanks very much.

Brad Smith - President and Chief Executive Officer

All right.

Operator

Thank you. Our next question comes from Jennifer Lowe of Morgan Stanley. Your line is open. Please go ahead.

Jennifer Lowe - Morgan Stanley

Great, thank you. Brad I wanted to touch on some of the longer term targets around QuickBooks Online subscribers specifically the increased guidance for this year and then the targets for 2017 and if you look at those I’m curious how you think about those in terms of where the business is today with 80% coming in as new to the QuickBooks’ franchise, versus what your expectations within those projections are around desktop conversions or potentially future contribution from the self-employed product?

Brad Smith - President and Chief Executive Officer

Yes. So Jennifer this is as we’re sitting here and speaking we’re looking at the assumptions we had and then what’s playing out in the market there hasn’t been anything that’s fundamentally different, I’ll give you a couple of tweaks. One is the product is continuing to perform in a way that we’re delighted by, its expanding the category and getting first time small businesses, as well as people here are new to the accounting software category in. So we originally had assumed that we will have a slightly larger portion of desktop moderator is going to the file, that number is nice at that level that we thought but we're getting more new to the franchise customers. And so the number hasn’t changed the mix has.

And the other thing is QBSE QuickBooks Self-Employed this is new for us and we’re looking to make it a global product. Right now, we don’t count those customers in QBO, if they aren’t paid subs. And we do have deals with Lyft and Uber and other that we mentioned that today is a free QuickBooks Self-Employed but then ultimate the way we monetize and if you want to send that into TurboTax we have an attach rate that this shows up in a different business unit called TurboTax. So it’s a nice little one Intuit ecosystem in place. We’ll see as QBSE growth and becomes more meaningful as it part of the paid subscribers we’ll wholly break out so you can see it. But right now, it’s only about 4000 of the total number of subs so it’s pretty immaterial.

So you put all that together, we’re hoping that we’re going to get more and more desktop customers excited about the cloud if not we still feel good about our two million subs because we’re getting more people into the franchise more than we had anticipated with the new QuickBooks Online.

Jennifer Lowe - Morgan Stanley

Great. And maybe just a follow-up one quick additional question, when you talked about where those 80% are coming from you highlighted new businesses, you highlighted customers coming off of Excel. But curious if you’re seeing customers coming off of competing small business accounting solutions that might have not chosen to go with QuickBooks in the past, given the more limited online offerings that might be making different competitive decisions today.

Brad Smith - President and Chief Executive Officer

Well, in the U.S. and I know that everyone on the call is familiar with this. We are primarily the player in the U.S. with QuickBooks desktop. The share is over 90% then you’ve got a couple of other players. The online players are relatively new in the United States. So if we were to actually growing the category, the read and do businesses that is started because the economy is getting healthy, there are part of 40% that is still in Excel spreadsheets. And so that’s really the opportunity there. Outside the U.S. and other countries we are able to convert some customers away from some of the competitive products. But we are also getting an influx of people coming off spreadsheet there too. But the mix is a little more – its more people coming from competitors and what you would see in the U.S., but by and large a lot of them are still new businesses and Excel spreadsheets.

Jennifer Lowe - Morgan Stanley

Thank you.

Brad Smith - President and Chief Executive Officer

All right.

Operator

And our next question comes from Michael Millman from Millman Research. Your line is open, please go ahead.

Michael Millman - Millman Research

Thank you. Looking at fraud on online, can you talk a little more about the EITC fraud, which I guess has been ongoing and certainly block has been doing battle with that and got to move from Congress. And then secondly, and related to tax, can you talk about whether you’re seeing changes in lifetime value for the tax systems depended upon – or at least over the several years as you move more and more starting with zero or absolute zero currently. Thank you.

Brad Smith - President and Chief Executive Officer

Hi, Mike. So on EITC, yes, I’m aware that our collected industry peers are all standing shoulder-to-shoulder and working with the government to try to take on the cyber fraud. And everyone has seen a different side of the animal and I know in our particular case the competitor you just mentioned, they are out there talking about two particular things, the need for license professionals and to keep an eye on earned income tax credit where they the observed some patterns that have been nervous as you might imagine we have algorithms and data we look at in our own. We produce this suspicious activity report and we have since 2012 that we provide to the IRS on anything that we see that may be unusual and then the IRS is the ultimate legal entity that determines whether that is a legitimate or a fraudulent return.

And so as we look at our EITC data in the context of that, we’re seeing right now, that the growth of the EITC this year season-to-date is inline with our units. And we don’t see that particular category sticking out as any more suspicious in our mix today than any of the other variables we look at. But that is not to say that there is something that everyone in the industry have to keep an eye on, we just haven’t seen that particular pattern emerge in out own customer base.

Michael Millman - Millman Research

Have you seen a change in that over the last three or four years?

Brad Smith - President and Chief Executive Officer

Have we seen a change in the IT’s - I’m sorry can you just be lot more specific Mike?

Michael Millman - Millman Research

Percentage of filers using EITC are collecting on it.

Brad Smith - President and Chief Executive Officer

You know Mike I honestly can’t answer that question. I just don’t know that data of the top of my head. So I unfortunately I can’t answer the question. I apologize for that.

And you have a second question which was the lifetime value piece. As you saw last year our revenue per return was down slightly as we grow our units and we grow our units faster than our revenue and ultimately our strategic goal is to expand the self-prepared category and then grow our share and we said that we would love every year and a half units grow faster than revenue because we know overtime the last ten values going to improve.

The answer to your question about the individual tax payer are we seeing improved LTV? We are. But when you put it in an aggregated mix, you got a bunch of new people coming in they’re coming in at first year and absolute zero, it does inflate the revenue per return on an average. But what we saw last year moving to TurboTax Online with this new line up, we’re getting a healthier mix, have paid. I think that’s where one of the question’s earlier that cash or someone had asked, which is, is the assumption right, I think, revenue per return being a little healthier, the answer is yes, because on an individual tax return basis, we’re actually seeing customers move up the move up the product line. So at an individual level the LTV is healthy, but in aggregate when you bring more new people in and they come in and their promotion price it’s actually deflating the average.

Michael Millman - Millman Research

Thank you

Brad Smith - President and Chief Executive Officer

Alright, you’re welcome.

Operator

Thank you, gentlemen, that is all the time we have today for questions. Would you like to close with any additional remarks?

Brad Smith - President and Chief Executive Officer

You know Saeed, I would. And I appreciate it’s a little bit past our normal time and we were wanting to do that, because we want to make sure we regard to everyone’s question. So let me just wrap up time, we want to thank everybody for your patience today. I know our opening remarks were a bit longer than usual, but we wanted to give you as much context as we could around the two recent events.

If you could take anything away from this call, I hope that you heard that me, Neil, Matt and the others feel confident and where we are to the first half of the year and we’re excited about momentum we’re building in the back half. And with that I want to thank you for your questions and we’ll look forward to catching up with you on the after calls. Take care everybody.

Operator

Ladies and gentlemen, thank you for participating in today’s conference. This concludes today’s call. You may disconnect and have a wonderful day.

What to do if you can’t pay your taxes

2015-02-19T16:49:00.001-06:00

Bill Bischoff for US News Report writes: As the filing deadline for last year’s 1040 looms ominously, you have two rational choices: Ship your 2014 return off by April 15 or get a filing extension by that date. This advice holds true even if you know you don’t owe any taxes — more so if you do but realize you can’t pay up on time.

‘But I know I don’t owe’
Let’s say you are certain there are no additional federal income taxes due for last year. Maybe you had negative taxable income or coughed up your share via withholding or estimated payments. Now you are missing some records; are too darned busy at work; or have some other convincing (to you) reason for putting off filing. And you don’t want to bother with getting an extension either. No problem, since you don’t owe — right? Wrong.

While it’s true there will be no IRS interest or penalties (these are based on your unpaid liability, which you say is zero), blowing off filing or extending is still a bad idea. Here’s why.

You may be due a refund. Filing a return gets your money back. No return, no refund.
Until a return is filed, the three-year statute-of-limitations period for the commencement of an IRS audit never gets started. The IRS could then audit your 2014 tax situation five years (or more) from now and hit you with a tax bill plus interest and penalties. By then, you may not be able to prove you actually owed nothing. In contrast, when you do the smart thing and file a 2014 return showing zero tax due, the government must generally begin any audit within three years. Once the three-year window closes, your 2014 tax year is generally water under the bridge, even if the return had some warts. (We hope that was enough mixed metaphors for you.)
If you had a tax loss in 2014, you may be able to carry it back as far as your 2012 tax year and claim refunds of taxes paid in 2012 and/or 2013. However, until you file a 2014 return, your tax loss doesn’t officially exist, and no refund claims are possible.
There are other more esoteric reasons that apply to taxpayers in specific situations.

The bottom line is, you need to either file by April 15 or, perhaps more realistically, get an extension and file later when you have more time.
The IRS will automatically approve any request for a six-month filing extension to Oct. 15. Simply file Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return) by April 15. Completing it takes about two minutes. (Honestly.)
You don’t need to have a reason for asking for the extension, and signatures are not required. For example, if your spouse is vacationing in Greece or unavailable to sign for any reason, that’s no problem. The only requirement is the total 2014 income tax liability and any amount still owing (which could be zero) must be estimated with reasonable accuracy on Form 4868.

‘I owe but don’t have the dough’

This is absolutely no excuse for not filing or failing to get an extension. Here’s why.

If you file by April 15 but can’t pay, you should arrange for an installment agreement, as explained below.
If you are not ready to file, just send in Form 4868 on or before the magic date.

Either way, you’ll successfully dodge the expensive (and totally unnecessary) 5% per month “failure-to-file” penalty — even though you didn’t pay on time. The only cost for taking this action is an IRS interest charge at a relatively reasonable rate (currently 0.75% per month, which amounts to a 9% annual rate) until you pay up. (The interest rate can change quarterly, so it may be higher or lower by the time you read this.) SNIP, the article continues @ US News Report, click here to continue reading....

Cloud-Based Billing Solutions in 2015 : Gigaom Research Report

2015-02-19T16:07:00.002-06:00

David S. Linthicum for Gigaom Research writes: Executive Summary

Traditional paper invoices are surprisingly common, even in 2015. But such manual workflows make accounting governance and tracking difficult, and can lead to lost revenue and customer dissatisfaction.

Cloud-based billing solutions offer all the features of an enterprise billing application but without the IT involvement and budget. With subscription pricing, businesses can choose the features or bundle together what they need and avoid waves of hardware and software procurements. In addition to the cost savings and robust feature sets, this form of Software as a Service (SaaS) delivers rapid deployment and continuous upgrades. And for companies with complex pricing models, multitiered sales, distribution channels, and shrinking margins, a cloud-based billing solution offers a competitive advantage.

Types of cloud-based billing solutions increase each year. Small businesses have the choice of cloud-delivered accounting packages with billing capabilities such as FreshBooks, Bill.com, and Intuit’s QuickBooks. Common enterprise options, meanwhile, include RedKnee, NetSuite, Monexa, Aria Systems, Metra Tech, and Zuora. As adoption grows, accounting SaaS will follow the path of other players such as Saleforce.com, which evolved from a small startup to becoming the enterprise standard CRM.

This provides an overview of the cloud-based billing solutions market, its beneficial features, and what organizations should avoid. It also covers the existing players and how a company can compare requirements to their own capabilities.

Key highlights from this report include:

Cloud-based billing systems are viable options for most enterprises, large and small, so long as they are willing to shift to an on-demand model. Those options can provide continuous system improvements, and are easier to configure and operate than traditional on premise options.
Cost should be a core consideration. Since these are subscription services, prices can shift up significantly in the future. To hold down costs, enterprises should consider long-term contracts with key providers. If significant integration is required, it will be more advantageous to sacrifice the flexibility to change providers more frequently.
Security and integration are typically afterthoughts with these products but should be prioritized before selecting a provider. Integration costs must be considered to maintain the return on investment.
The value of cloud-based billing systems for the customer must be determined. Billing errors and system limitation have been replete with customer satisfaction issues. Customers will choose vendors that simplify doing business.
Organizations should perform a point of contact with the target provider before putting a solution into operation. Many will find that a number of solutions do not live up to expectations and requirements. Flaws should be identified early in the process.
Worth continual evaluation is the value that this technology brings to business. Cloud-based billing systems are much easier to change out. This feature should be used to an organization’s advantage.

Visit Gigaom Research to get the full report FREE @ Gigaom Research,

" all-in-one accounting and tax service for small business" InDinero raises $7 million in funding

2015-02-19T15:57:00.003-06:00

inDinero today announces its re-launch as the premiere all-in-one accounting and tax service for small business. Backed by $7M in new capital and $10M overall from 50+ different angel investors and small funds, inDinero can now replace all three back office disciplines (accounting, tax and payroll) for one flat fee. Co-founders Jessica Mah and Andy Su remain the only official board members as no board seats or observer rights were given out. Notable investors in this round include Kevin Hartz, Bobby Yazdani, Hank Vigil, Fritz Lanman, Coyote Ridge Ventures, SaaS Capital, Streamlined Ventures, among many others.

inDinero’s re-launch just says “No” to the old SaaS scalability model by providing customers with the brightest minds in accounting to walk them through all of their financial needs. Running at near break-even, inDinero is padding their bank account with the new funds as they plan to double headcount and office locations over the next 18 months. Focusing primarily on customers with 2-100 employees, inDinero is making it easier for small business to grow faster.

“Now we’re a pain killer for any small business that wants to focus on themselves instead of having to build out their own accounting staff,” said Jessica Mah, CEO at inDinero. “The Mint.com for businesses idea was horrible, and now we are doing so much more by actually doing the accounting and taxes. A business no longer needs to hire a bookkeeper and tax person anymore; inDinero just takes care of it all.”

Unconventional and Innovative

With $10M now in total funding, inDinero has been gathering and managing various waves of cash since 2010 and last year even turned away many larger offers from VCs. inDinero’s pioneering concept of “pseudo bootstrapping” allows it to remain independent while prioritizing revenue and profits and to only accept appropriate levels of funding. “We are a 30 year old company in the making,” said Mah.

“There’s no reason for us to take on more capital than necessary and at what cost?” In addition to its funding methodology, inDinero’s innovative SwS approach is making a huge impact on the startup world. Now a growing business can hold off on hiring an in-house controller well into the 100th employee mark. inDinero also makes sure its developers work right along side of its own tax, accounting and payroll experts so that real time best practices reach customers seamlessly.

“As a rapidly growing business, we face a lot of challenges and having inDinero’s support and good humor has been indispensable,” stated Kate Bertash, operations services manager at Move Loot. “Now we enter a new phase of our company after raising our Series A and we are definitely more prepared going into it with inDinero’s help.”

Covet Thy Customer

Back in 2010 it was hot and seemingly lucrative to be every businesses’ sexy little financial dashboard. But at $20 per month, it became clear that doing so little for so many was not going to be a sustainable and growing business model. inDinero customers were even begging for more services stating that if you are already keeping track of my money, you might as well file my taxes and do my payroll while you are at it; oh, and charge me more for it all. However, inDinero could not just become a more user-friendly version of Intuit. Instead, inDinero began hiring the best and brightest minds in the accounting world to help customers in need and take great care of them as if they were their own dedicated accountants. Now inDinero charges customers between a few hundred to several thousands of dollars per month and customers are glad to make the change. Finally, inDinero realized they are the ideal solution for the growing startup company. By clearly identifying their target customer, inDinero is helping growing startups to grow even faster.

“inDinero solved a huge problem for us and saved me hundreds of hours of work and worry,” stated Brian Bosche’, CEO and co-founder at TernPro. “I don’t know what I would have done without inDinero, and I hope more businesses like theirs can make it easier for startups to focus on building products and customers versus worrying about accounting, payroll and taxes.”

About inDinero

inDinero is the leading financial software with services (SwS) solution for small businesses to automate accounting, tax and payroll activities for a flat fee. inDinero has over 80 employees with offices in San Francisco, Portland, and Manila. For more information go to www.inDinero.com or call 855-463-4637.

TurboTax overall, including the desktop wing, grew 11 percent annually with nearly 15.6 million units sold through last weekend.

2015-02-19T15:50:00.000-06:00

Rachel King for ZD Net reports: "All the way up to Saturday, February 14, TurboTax Online sales grew 19 percent year-over-year with more than 11.4 million units sold.

TurboTax overall, including the desktop wing, grew 11 percent annually with nearly 15.6 million units sold through last weekend.

With a nod at the ongoing investigations at suspicious state-level tax returns stemming from TurboTax filings, Sasan Goodarzi, senior vice president and general manager of Intuit's consumer tax group, said in prepared remarks, "We've worked through some early challenges, but we are pleased with our progress at this point in the season."

Intuit's loss widens, but less than expected / revenue rose 3.3%

2015-02-19T15:36:00.003-06:00

Intuit (NASDAQ: INTU) reported Q2 EPS of ($0.06), $0.07 better than the analyst estimate of ($0.13). Revenue for the quarter came in at $808 million versus the consensus estimate of $786.6 million.

Intuit sees Q3 2015 EPS of $2.70-$2.75, versus the consensus of $2.88. Intuit sees Q3 2015 revenue of $2.075-2.15 billion, versus the consensus of $2.23 billion.

Intuit sees FY2015 EPS of $2.45-$2.50, versus the consensus of $2.47. Intuit sees FY2015 revenue of $4.275-4.375 billion, versus the consensus of $4.34 billion.

“We delivered a strong quarter, exceeding our company financial targets across the board,” said Brad Smith, Intuit’s president and chief executive officer. “Our Small Business online ecosystem momentum continues to build, with steady subscriber growth again this quarter. On the heels of this performance, we’ve raised our QuickBooks Online subscriber guidance for this fiscal year.

“Overall, early indicators and unit results show our tax strategy is on track. While we faced some initial challenges as a result of a change to our desktop product lineup, we took swift action in response to our customers’ feedback. While doing so, we continue to take proactive measures to navigate a heightened sense of concern about tax fraud in the American tax system.

“Beyond these challenges, we are inspired by the opportunities in front of us and we remain deeply committed to accelerating both customer and revenue growth across the company,” said Smith.
_________
Per MarketWatch:

Intuit Inc. said its revenue rose 3.3% in the January quarter, helped by subscriber growth, while the company said it continues to take measures to navigate a heightened sense of concern about tax fraud.

Earlier this month--and after the quarter ended--a wave of fraudulent tax-return filings caused the company's TurboTax business to halt the transmission of e-filed state tax returns for about 24 hours. Intuit has said it thinks there was no breach of the company's computer systems and that information used to file the fraudulent returns was obtained from other sources outside the tax preparation process.

"Overall, early indicators and unit results show our tax strategy is on track," Chief Executive Brad Smith said in a prepared statement. "While we faced some initial challenges as a result of a change to our desktop product lineup, we took swift action in response to our customers' feedback. While doing so, we continue to take proactive measures to navigate a heightened sense of concern about tax fraud in the American tax system.

Revenue in the latest period edged up to $808 million, exceeding the company's expectations for revenue of $780 million to $800 million.

Intuit, also known for Quicken and QuickBooks, has diversified through a variety of acquisitions. In June, the company bought mobile payment provider Check for about $360 million. Previously, it struck deals for document service DocStoc and tax-return helper GoodApril.

For the current quarter, the company forecast per-share earnings of $2.70 to $2.75 and revenue of $2.075 billion to $2.15 billion. Analysts polled by Thomson Reuters expected a per-share profit decline of 19% to $2.88 and revenue decrease of 7% to $2.23 billion.

For the period ended Jan. 31, Intuit reported a loss of $66 million, or 23 cents a share, compared with a year-earlier loss of $37 million, or 13 cents a share. Excluding stock-based compensation and other items, the per-share loss from continuing operations was six cents, compared with a year-earlier earnings of two cents. The company expected a loss excluding items of 11 cents to 13 cents a share.

Start-up Kit Offers easy to manage CRM For Small Business / KitCRM ; SMS / Text based CRM

2015-02-19T05:45:00.000-06:00

Businesses usually need a CRM system to run their businesses. In today’s cut-throat competitive world businesses especially small businesses need to manage their resources better in order to succeed. Kit perfectly fills in the gap.

Kit is a lot different from the existing lot. All the CRM software in the market today is more or less similar to Salesforce. Now KitCRM performs all the functions of regular CRM software but uses text messages (SMS) to do so. Let’s have a look at how this is done.

Marketing is much simplified using KitCRM saving a lot of time for small business owners. All you need to do is configure KitCRM with your business accounts like shopify, Facebook etc. Once this is done you can simply run your business with SMS’s to run sponsored ad campaign within your budget, take stock of sales, and communicate with customers and a lot more.

Reports can be generated by sending a simple SMS. Something like total sales in a day, best sellers or even slow moving goods or contacting customers or even receiving a detailed sales report can be done very easily.

KitCRM, with its easy to use technology definitely competes with traditional CRM systems for small businesses. Anyone with a smartphone can maintain their customer relationships with their fingertips. It’s as simple as that. Pricing starts at as little as $10 per month and the company also offers a 14day trail.

What Married Taxpayers Lose By Filing Separately

2015-02-19T05:38:00.004-06:00

Lisa Hay for Betterment & the HuffPo writes: For all married couples, there is an annual choice to make when selecting your filing status: married filing jointly (MFJ) or married filing separately (MFS)?

As with most tax-related questions, the answer is that it depends.
It's important to note that married filing separately is not the same as filing as a single person. In most cases, it doesn't make sense to file separately because a married couple will usually end up paying more total tax with two returns.

But, there are exceptions to every rule--and this one is no different. There are cases when filing separately makes more sense in order to maximize a deduction or to separate tax liability. That means it is important to look at your individual situation each year when deciding how to file.

What You Lose By Filing Separately
Filing separately can disqualify or limit your use of potentially valuable tax breaks, including (but not limited to):

The child and dependent care tax credit
The adoption credit
The Earned Income Credit
Tax-free exclusion of U.S. bond interest
Tax-free exclusion of Social Security benefits
The credit for the elderly and disabled
The deduction for college tuition expenses
The student loan interest deduction
The American Opportunity Credit and Lifetime Learning Credit for higher education expenses
The deduction of net capital losses
Traditional IRA deductions
Roth IRA contributions

So, why would it make sense to file separately?
What You Gain By Filing Separately
There are some situations in which filing separately can actually result in tax savings. A few common scenarios include:

Separation of Your Tax Liability From Your Spouse's
It may be preferable to file separately when you need to separate your tax liability from your spouse's. Signing a joint tax return makes you both responsible for the accuracy and completeness of the return and obligates you for any current or future tax liability or penalties. If you file separately, you will only be responsible for the accuracy and payment of taxes for your own return.

Lower Overall Tax Bill If One Spouse Has a Significant Itemized Deduction
If you and/or your spouse both have taxable income and at least one of you (ideally the person with the lower income) has significant itemized deductions that are limited by adjusted gross income (AGI), you should run the numbers to calculate the potential advantages of filing separately.

Common itemized deductions limited by AGI are:

Medical expenses, deductible only to the extent they exceed 10% of AGI--7.5% if you're age 65 or older
Personal casualty losses, deductible only to the extent they exceed 10% of AGI
Miscellaneous itemized expenses, such as unreimbursed employee business expenses, fees for tax advice and preparation, and investment expenses, deductible only to the extent they exceed 2% of AGI
Charitable contributions, deductible up to 20%, 30%, or 50% of AGI, depending on the type of gift
For example, AGI determines if a couple can deduct unreimbursed healthcare costs and casualty losses on Schedule A. However, out-of-pocket medical expenses must exceed 10% of AGI to qualify as a deduction. Casualty losses must also total more than 10% of AGI. (See IRS guidelines on medical deductions.)

The spouse with the substantial medical expenses calculates deductibility against only his lower AGI when filing separate returns. As each spouse's AGI--and AGI limits--are lower on separate returns, allowable deductions for these types of expenses may be considerably higher if you file separately. When one spouse can lower taxable income this way, married filing separately might reduce a couple's overall tax liability.

State Considerations
State income taxes can also impact your decision. In some states, considering the total federal and state tax liability together may change the numbers in favor of filing separately. When one or both spouses live in a community property state, special rules apply for allocating income and deductions between each spouse's tax return. Each spouse generally reports half of the total income and half of the deductions on each tax return. Community property states are: Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and Wisconsin.

The bottom line is that it's important to do the math both ways--filing separately and jointly-- to see which provides the overall lowest tax liability.

Xero responds to NZX price spike query

2015-02-19T05:36:00.003-06:00

Holly Ryan for the New Zealand Herald writes: Online accounting firm Xero has been issued with a price enquiry from the NZX this afternoon after its shares jumped from $16.40 to $19.00 in two days , -- an increase of 15.85 per cent.

Xero chief executive Rod Drury confirmed the company was in compliance with NZX rules and attributed the increase to possible investors from its UK and Australian markets as well as increased media coverage.

"Since Xerocon we've had a really good profile in the UK community and a lot of the investment community were watching what was going on," Drury said. "It was a massive conference and the tone of it was incredibly positive. We do have lots of overseas investors, and we get called everyday from analysts wanting to cover our stock because our growth rates are so high and we're really building quite a nice brand as a pretty sophisticated company globally," he said.

Xero shares reached a high of just under $45 last year before falling by 47 per cent over the rest of the year. Drury said public perception around US issues had held the company back.

"I think a lot of [software as a service] stocks got pulled back a few months ago and a lot have bounced back," Drury said. "I think we were being held back because of perceived US execution issues but people have seen us building on great people and the response from the UK shows that we're doing really well so hopefully that's all just coming back a bit."

In its formal response to the NZX, Xero said it continued to comply with its continuous disclosure obligations under the NZX Listing rules.

Xero's shares have exploded this week and regulator is asking why

2015-02-19T05:32:00.003-06:00

Alex Heber for Business Insider Australia writes: Xero’s shares have exploded this week and the NZ share market regulator has asked the cloud accounting company for an explanation.

The New Zealand Stock Exchange lodged a price enquiry following the share price jump which was up another 10.5% on the ASX today to $18.78.

The letter from the NZX said between February 17 and 19 the price of Xero shares increased from $16.40 to $19, an increase of 15.85% or $2.60.

There haven’t been any major announcements from the company to the market.

Company CEO Rod Drury told Business Insider after he got the “speeding ticket” from the NZX they looked at the company share register and couldn’t spot anything “tricky”.

He said the volumes hadn’t been big but speculated a big week of presentations at Xerocon in the UK and roadshows in Australia could be behind the move.

Responding to the NZX Xero company secretary confirmed Xero has complied with its continuous disclosure obligations.

Here’s the chart.

Tax costs for poorly timed stock transactions

2015-02-19T05:30:00.003-06:00

Kay Bell for BankRate.com writes: You decided to harvest some capital losses by selling some stocks that took a nose dive. Now one of your former stocks has turned around and you want it back.

Don't be in too big of a hurry to call your broker. If you repurchase the stock too soon, you'll violate the wash sale rule. This regulation prohibits a shareholder from selling a holding at a loss, using that loss for a tax break and then turning right around and buying the same or similar stock.

It's designed to prevent the deduction of what the IRS calls "noneconomic losses." Essentially, in the eyes of the IRS, you never really sold the stock. Your repurchase indicates to the tax agency that you believe in the investment itself but the whole purpose behind the transaction was to generate a tax loss. "You just sold it to book that tax loss, and the Internal Revenue Service is not going to let you do that," says Jim Van Grevenhof, executive editor from the Tax & Accounting business of Thomson Reuters.

Most investors encounter the regulation when they reacquire a stock soon after selling, but it works the other way, too.

Specifically, the law says you may not take a tax loss on a security sale if you have obtained the same or a substantially identical security 30 days before or 30 days after a sale. So don't try to get around the rule by buying more of a stock just before you dump the poorly performing shares you already own.

No loss now, but later

When a stock transaction violates wash sale guidelines, the IRS will not let you take the tax break immediately. However, all is not lost.

For tax purposes, the deduction of your loss is postponed to a later date. That is, the disallowed loss is added to the cost of the new shares you bought. This gives you the tax basis for the holdings, which you'll use when you sell the reacquired securities.

For example, Joe bought 100 shares of Stock A for $1,000 and sold them for $750, producing a $250 loss. Fifteen days later, he bought 100 new shares of Stock A for $800. Because Joe bought identical stock, he can't immediately take the loss. But he can add the disallowed $250 to the $800 price of his new shares, producing a basis of $1,050 for the new shares. When Joe sells his reacquired Stock A shares, the adjusted basis will, depending on the sales price, produce a bigger loss to claim or reduce any taxable gains.

And don't try to skirt the rule by buying a call option on the stock. "Say I bought a stock at $30, it went down to $20 and I want to sell it and claim the $10 loss. Then a day or two later, I buy a $20 call on the stock," says Van Grevenhof as way of illustration. "What I hope is that the stock will go up. That's the same thing as buying actual stock, and it violates the wash sale rules." SNIP, the article continues @ BankRate.com, click here to continue reading.....