What is Cloud Accounting?
Mar 15, 2016
Whether you know it or not, you use the cloud on a daily basis. If you log onto Facebook, pay your bills online, or surf the internet, you are using the cloud. Cloud computing, or the cloud, is the general term for anything involved in delivering hosted services over the Internet rather than on your local desktop. The cloud utilizes multiple remote servers networked to permit the sharing of data-processing tasks, centralized data storage, and online access to computer services or resources. The cloud permits higher volumes of information to be shared than the traditional direct connection to a server.
What is cloud accounting?
Cloud accounting serves the same function as the accounting software installed on your computer. However, the program runs from outside servers and access to the program involves using your web browser, over the Internet.
Cloud accounting employs the cloud to process your accounting transactions. Traditionally, businesses and organizations purchased accounting software, installed it on internal computers or networks, and processed transactions with the program. WVC RubixCloud provides an application (general ledger software) which is hosted on someone else’s system, allowing you to complete your processing by accessing the program online. All of your data is securely stored and processed on a remote server in the cloud.
How secure is my data?
Often times, the cloud is more secure than being on your own network. In fact, cloud computing offers a level of physical and electronic security that an on-site server or a locked file cabinet cannot begin to approach. It’s important to understand that data hosted in the cloud is managed by a data center. All data centers are different and independent. You need to make sure the data center you choose can manage the data you are processing. There is a whole checklist of security measures you should be aware of, and I will address those in a future post.
Cloud computing offers more reliable protection from internal data loss than other communication methods because it gives you centralized control over your data. It’s much easier to establish and enforce policies for a cloud-based system than for the individual silos of email accounts, physical media, applications and flash drives that handle on-site data storage.
Is cloud accounting expensive?
Computing in the cloud has proven to be significantly inexpensive compared to traditional methods. There are fewer overall costs associated with cloud computing. There is no software to install and maintain. The IT infrastructure required is simply a connection to the internet, whereas traditional methods include a series of networks, applications, and workarounds. Cloud computing provides you the flexibility to utilize only the services you want, when you want them, and at a fixed monthly fee.
So, now that you know more about the cloud and cloud accounting, why should you make the transition? Click here to for 10 reasons you will love WVC RubixCloud.
By: Jennifer Kinzel, Director of WVC RubixCloud
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The “Art” of A Tax Deduction
Mar 10, 2016
Valuing Artwork
Making a donation to a museum, educational institution, or other qualifying charitable organization can give you an opportunity to share your collection with others and provide you with a charitable income-tax deduction. If such a contribution is among your charitable goals, your first step generally should be to obtain a written appraisal from a qualified source to support your claim.
What Constitutes a Qualified Appraisal?
A qualified appraisal is one that’s made by a qualified appraiser and dated no earlier than 60 days before the date you donate the artwork. Very generally, a qualified appraiser is one who has the education and experience to value the type of property being appraised and who regularly prepares appraisals for a fee.
Typically, the appraisal should include the following:*
- A sufficiently detailed description of the artwork (e.g., size, subject matter, medium, name of artist)
- The authenticity and condition of the artwork
- Any donor restrictions (or the terms of any other agreement) on the disposition or use of the artwork by the charitable organization
- The appraised fair market value of the artwork
- The specific basis for the valuation
- The date (or expected date) of the contribution
Claiming the Deduction
The IRS has certain requirements that must be met in order to claim the deduction for donated artwork. For donations of artwork valued at $20,000 or more, you must attach a complete copy of the signed appraisal to your tax return and be prepared to provide a conforming photograph of the artwork if requested by the IRS. If the artwork has been appraised at $50,000 or more, you can request a Statement of Value for the item from the IRS before filing your return. A copy of the qualified appraisal and a check or money order for $5,700 (for up to three items) must be submitted with your request.
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Wedding Bells? Marriage and Taxes.
Mar 08, 2016
Getting married in 2016? While you’re talking over your wedding plans, you may want to discuss something else that’s important: your income taxes.
Tax withholding. You will have a choice of whether to have taxes withheld from your pay at the married or higher single rate. You should also take into account your family income and any dependents. The withholding calculator on the IRS website can help you make the decision.
Tax-filing status. Married filing jointly generally provides the greatest benefit to both spouses. However, there may be circumstances when married filing separately is a better option. Ask your tax preparer for help.
Your expectations. Do you want to break even, get a refund, or owe a little at tax time? Talk to your future spouse about a withholding strategy that will work for both of you. Just be sure you have enough tax withheld to avoid a penalty.
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The Value Of A Chart of Accounts
Mar 07, 2016
How important is a chart of accounts? Does it matter what is in your chart of accounts? Does it make you more profitable or better at what you do? I am curious to hear your answers. I would tend to think some business owners would argue a chart of accounts is irrelevant and does not affect the profitability of your business. However, I say, not so fast!
Obviously, having a chart doesn’t necessarily add money to your pockets. However, correctly structuring your chart of accounts can aid in your profitability. Of course, there is more to it than just having the chart of accounts, it must be correctly utilized for optimum outcomes.
Having the essential accounts (i.e. direct costs and overhead accounts) and correctly managing them will provide you with invaluable information. For example, you are able to determine your gross margin and your profitability. With such data, you can make quality business decisions to improve or maintain your level of profitability. Without such accounts and without recording the appropriate information, it is impossible to have a handle on your gross profit.
In addition, utilizing a reasonably accurate chart of accounts can provide information from which to calculate many accounting ratios. These ratios can be used to benchmark your company in comparison with other businesses in the industry. As a result, improvements can be identified to ensure your business is competitive in your market.
Furthermore, an accurate chart of accounts can provide insight to be used for better decision making. Comparing your accounts over periods can help you identify and predict trends and downturns. You can be prepared to take the necessary actions to ensure you maintain or even enhance your profitability during periods of historical growth.
With that being said, I would caution against constantly modifying your chart of accounts. There may be times when you believe there is better information available which could be true. However, if you are regularly altering your accounts then you will lose the ability to analyze comparable data.
Next time you think it’s just a chart of accounts, think again!
Categories: Cost Accounting
Business Continuity Plan. Be Prepared.
Mar 03, 2016
What if disaster strikes your business? An estimated 25% of businesses don’t reopen after a major disaster strikes.* Having a business continuity plan can help improve your odds of recovering.
The basic plan
The strategy behind a business continuity (or disaster recovery) plan is straightforward: Identify the various risks that could disrupt your business, look at how each operation could be affected and identify appropriate recovery actions.
Make sure you have a list of employees ready with phone numbers, e-mail addresses and emergency family contacts for communication purposes. If any of your employees can work from home, include that information in your personnel list. You’ll need a similar list of customers, suppliers and other vendors. Social networking tools may be especially helpful for keeping in touch during and after a disaster.
Risk protection
Having the proper insurance is key to protecting your business — at all times. In addition to property and casualty insurance, most small businesses carry disability, key-person life insurance and business interruption insurance. And make sure your buy-sell agreement is up to date, including the life insurance policies that fund it. Meet with your financial professional for a complete review.
Maintaining operations
If your building has to be evacuated, you’ll need an alternative site. Talk with other business owners in your vicinity about locating and equipping a facility that can be shared in case of an emergency. You may be able to limit physical damage by taking some preemptive steps (e.g., having a generator and a pump on hand).
Protecting data
A disaster could damage or destroy your computer equipment and wipe out your data, so take precautions. Invest in surge protectors and arrange for secure storage by transmitting data to a remote server or backing up daily to storage media that can be kept off site.
Protecting your business
If you think your business is too small to need a plan or that it will take too long to create one, just think about how much you stand to lose by not having one. Meet with your financial professional for a full review.
- www.sba.gov/content/disaster-planning
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