Accounting firm RubinBrown has purchased ERP consulting group Liberty Technology Advisors in a deal that is effective this week. Based in Chicago, Ill., Liberty’s operations  are being combined into RubinBrown’s Business Advisory Services Group.

Terms were not disclosed.

Liberty was founded in October 195 and is managed by its president, Joel Schneider, who will become a partner in the accounting firm. The staff also includes six managers and one staff/operations resource.

Liberty provides ERP software selection, business process re-engineering, technology and IT security advisory services and ERP implementation support services

Cloud use for business applications is higher for distributors in North America than in EMEA and Australia, according to a recent survey by Sage. The survey showed that 43 percent of distributors on this continent had a hybrid on-premise cloud ERP system.

That compared to about a third of distributors in EMEA and Australia.

The research was conducted in October and November, sampling 652 leaders of companies with 50 to 4,999 employees. There were 201 in North America, 401 in EMEA and 50 in Australia

North American business were also ahead in developing ecommerce capabilities. Forty-four percent of North American organizations reported boosting ecommerce capabilities, compared to 34 percent in EMEA and 24 percent in Australia. 

The survey also suggested the speed at which cloud technology is growing, reporting that 37-percent are implementing cloud-based technology and applications. 

Businesses dramatically accelerated the adoption of new technology, accord to Sage’s 2021 Return to Growth Outlook. The recently released survey of 1,000 SMB business leaders found that 52 percent accelerated their technology plans by three or more years.

 The most frequently cited areas for digitization were accounting and finance, mentioned by 45 percent of respondents; marketing, 31 percent; and customer relationship management, 26 percent.

Cloud accounting software was cited by 27 percent as the most important technology in dealing with the crisis.

The pandemic also shifted business practices with 32 percent saying they tried social media advertising for the first time while 23 percent hired employees completely digitally for the first time. Non-traditional HR policies, such as childcare stipends or flexible work arrangements, were implemented by 27 percent for the first time. Only 13 percent intend to reduce budgets for these areas in 2021.

A third of surveyed business leaders said government assistance was listed as a key reason for business survival in the last 12 months.

Fifty-two percent said increase increased government funding for COVID-19 testing and additional safety measures would have the most positive impact in the next year, followed by 47 percent who said more employee support in the form of stimulus or increased funding for items such as childcare would be the most helpful.

Botkeeper, which markets on-line bookkeeping systems, has introduced Botkeeper Basic Service and Botkeeper Advanced Service.  The company has cut its monthly fees, and implemented a sharp decrease in its platform fee.

The model includes a platform fee and a cost per entity. Basic startsat $55 per month. The prior rate was $79 monthly, scaled up based on monthly expenses. The starting fee for Advanced is $165 per month per entity billed annually.

The platform fee has been changed to $500 monthly billed annually, compared to a prior $3,500 per month flat fee.

Botkeeper Basic includes Categorizations and Classifications, Bank and Credit Card Reconciliations, Payroll Journal Entries, Standard Balance Sheet, P&L & Cash Flow Statement, Overall Book Review for any unusual balances or discrepancies, Dedicated Growth and Success Teams

Everybody is talking about Client Advisory Services and a lot of people are doing something about them. That is because businesses have never needed advice more than they have during the COVID-19 pandemic..

Sponsor:

.They have been confronted with decision they have not had to make before—how to transition employees to remote work; how to do deal with rapidly changing government requirements; how to keep operating in difficult conditions.

So they turn to the people that are usual at the time of their contact list at times like this: their accountants. Accountants are being called on for advice in area they usually leave to others, such as human resource and other people issues. And accountants need to be able to advise clients on what to do, not just how to reads their financial reports.

This special report looks at the evolving world of CAS, how practitioners are adapting to it and how their technology partners can help them deliver the needed services. 

The coronavirus has helped make the argument for the use of online payroll systems. With the cloud, you can still run payroll and issue checks, even if no one is in the office. But it has also put accountants on the hook for being able to answer an increasing number of client questions about human resources issues, including furloughing and recalling staff, especially with the Paycheck Protection Programs Loans, which are based on payroll.  At once, it has provided the tools for producing paychecks even when practitioners are out of the office and has also given them a new set of problems and new opportunities. In this special report, Payroll and Beyond, The Progressive Accountant looks at the impact of the response to COVID-19 on payroll and HR services.

 Where are we going in the mid-market? Or in general? The economy started out the year with record employment and has moved to record unemployment with the effects of shutdowns of the Covid-19 virus.  For resellers this year, how they are doing depends on where they are located and in what markets they are involved. Bob Scott’s Top 100 VARs for 2020 examines the issues in an era of extreme uncertainty and names 100 firms who are the big players in this market.

For resellers, the issue now is meeting user needs and making money, not worrying about whether software is in the cloud. Certainly, there are many thousands of on-premise mid-market accounting systems in use and a decent number are being sold. But the action is in the cloud and it is a matter of features, which is what users really care about. The issue is which product is better at handling nonprofits, which is good for businesses with inventory, which best suits professional services and which delve into highly specialized markets. In the fact, the thought did not even occur this year to count how many of the Top 100 2019 VARs carry cloud products. It was just assumed they all do. That is why this year’s theme is “The Cloud Rules”  If you are not in the cloud game, you are not really in the game.

Jeff Siegel is the owner of Siegel Solutions, an 11-person firm that provides outsourced bookkeeping solutions usingJeff Siegel is the owner of Siegel Solutions, an 11-person firm that provides outsourced bookkeeping solutions usingQuickBooks to over 300 clients. Jeff knows what it takes to grow a business: efficiency of scale, real-time insights thatbuild strong customer relationships, and a secure data environment. He gets all three from Right Networks.

In this ebook, we’ll examine:In this ebook, we’ll examine:

• Why DIY (Do-It-Yourself) accounting systems created forsmall businesses cause undue pain for both small businessowners and for accountants
• How the right cloud-based professional accounting systemcan not only eliminate that pain, but also open up newopportunities for accountants to better serve their clients

Steven Brewer, CPA is the President of Steven Brewer and Company, CPAs, located in Salem, IN. He talked to AccountantsWorld about how he’s grown his accounting practice without needing to increase his number of clients – and how those improvements have eased his tax season crunch.

BooXkeeping: How White Label Bookkeeping Services Provide Scalability to Your Firm When it comes to running a business the main thing that every business owner wants to do is sell their products or services, create brand awareness and generate profits that they can enjoy later in life. The last thing a business owner wants to do is to worry about bookkeeping, taxes, and the rest of time consuming accounting tasks needed to run a successful business, with limited resources and time, often the bookkeeping ends up being the last on the list of things that need to be completed.

 A Florida tax preparer has been sentenced to four and a half years in prison for fiing 745 returns in 19 states from 2015 to 2018. Damian Barrett of Homestead, Fla., filed the returns through his Florida-based tax preparation companies, Max Tax Experts and Winngate Tax Services.

Barrett drew 54 months in sentencing in a federal court in Portland, Ore., after being convicted on charges of mail fraud and money laundering by a jury in 2020.

He claimed nearly $900,000 in fraudulent tax refunds and received more than $234,000 with $130,000 of that coming from the Oregon Department of Revenue after he requested more than $322,000 in refunds from the state.

Barrett also omitted more than $21,000 in income on his 2016 federal return and did not file and individual return in 2017. He was ordered to pay $234,000 in restitution 11 states and more than $74,000 to the Internal Revenue Service.

The planned sale of Tax Refund Solutions of Republic Bank & Trust Company has fallen apart. The collapse of the deal was announced this month by the prospective purchaser, Green Dot Corp.

The parties agreed to the sale on May 13. However, on October 4, Green Dot “that it has been unable to obtain the Federal Reserve’s approval of or non-objection to the Sale Transaction.” That led to Green Dot’s announcement the deal will not be completed.

Green Dot has agreed to buy the Republic business for $165 million in cash which would have brought together that company’s tax refund products with the Santa Barbara TPG that it already owned.

 A New York CPA has pleaded guilty to helping a concrete supplier evade more than $400,000 in taxes. John Savignano of White Plains admitted to conspiring with co-defendant, Rocco Manzione, to hide the latter's income .

Savignano faces a maximum of five years in prison and possible restitution and monetary penalties.

For tax years 2014 through 2014, Manzione did not file individual returns of pay taxes due from income from his concrete companies. Then in 2015, he sought a loan in connection with the purchase of a condominium in Miami, Fla., and the lenders asked him for three years of filed tax returns.

Manzione contacted the CPA who helped him prepare and file tax returns that substantially underreported his income.

The Internal Revenue Service has introduced 18 self-study seminars from this year's IRS Nationwide Tax Forums Online. These were recorded in July and August at the 2021 IRS Nationwide Tax Forum.

These seminars were recorded in July and August at the 2021 IRS Nationwide Tax Forum. Thirty-seven seminars are available from preliminary years. These can be reviewed for free, but those who choose this option cannot access review questions, examinations or receive CPE credits.

The new seminars include the folllwing:

1. Advocating for Taxpayers in Order to Avoid Abusive Tax Schemes
2. Be Tax Ready – Understanding Rules for Due Diligence and the Child Tax Credit and Earned Income Tax Credit Under the American Rescue Plan Act of 2021
3. Charities & Tax-Exempt Organizations Update
4. Closer Look at the IRS Independent Office of Appeals
5. Collection Flexibilities During Difficult Economic Times
6. Common Issues Presented to OPR and Best Practices to Address Them
7. Determining an Individual's Tax Residency Status
8. e-Services and You
9. Gig Economy
10.  Helping You and Your Clients Steer Clear of Fraud and Scams
11.  Key Enforcement Issues
12. Keynote Address
13. Keys to Mastering Due Diligence Requirements and What to Expect During a Due Diligence Audit
14.  Overview of Taxpayer Civil Rights
15.  Professional Responsibility Obligations when Practicing before the IRS: OPR and Circular 230
16.  Retirement Plans - IRS Compliance Initiatives
17.  Tax Law Changes from a Forms Perspective
18.  Virtual Currency

 Accounting firm EisnerAmper has named five individuals as its 2021 partner class. The five are Tami Davidman, Jessica Estrella, Harold Hess, Isaac Mansour and Robert Bailey.

Davidman is an audit partner who provides assurance services in the Financial Services Group from the New York City office. She joined the firm as an audit senior manager in October 2007 after serving nearly two years as part of Ernst & Young’s audit staff. Davidman has more than 15 years of experience advising alternative investment partnerships, private equity funds, and fund of funds across a variety of industries.

Based in Iseln, N.J., Estrella has 15 years of experience applying broad technical expertise in U.S. GAAP, U.S. GAAS, PCAOB standards including SEC rules and regulations and in leading audit engagements of large, complex, multinational organizations. Estrella joined the firm in February 2005.

Hess, who provides private business services in the Private Business Services Group, is a member of the firm’s Outsourced Finance and Accounting Practice. His expertise also includes public offerings and other filings with the SEC and compliance with Section 404 of Sarbanes-Oxley. He came to EisnerAmper in December 2001 after two years as an audit manager after two years with Deloitte. He is based in New York City.

Also based in New York City, Mansoura is audit partner who provides assurance services in the Real Estate Services Group, based in the New York City office. He started with the firm in December 2005. He was spent more than 20 years working with the real estate industry.

Another partner based in Iselin, Reilly provides assurance services in the Manufacturing and Distribution Group and the Pension Services Group. He joined EisnerAmner in December 2005.

Bill.com Holdings has named Mark Lenhard as its COO. He was previously CEO of Invoice2go, which was acquired by Bill.com this month.

Lenhard held the Invoice2Go position form April 2020 and will continue in that role in the operation that is now a subsidiary of Bill.com.

Prior to that, he was VP of commerce strategy and growth at Adobe from July 2018 through July 2018. He was SVP of strategy and growth at Magento Commerce from November 2014 through June 2018. He spent four years as head of global strategy at PayPal.

In a period in which the COVID-19 pandemic took big chunks out of many workers’ pay, named executives for Paychex did not fair badly for the year ended May 31. The smallest increase went to CEO Martin Mucci who had a 19.3-percent rise over fiscal 2020 while three others had increases that topped 34 percent.

The five executives of the payroll company took 20-percent cuts in base salary from July 1 through December 31. In Mucci’s case, that meant his base salary dropped to $898,462 for the most recent ended year, down 9.5 percent from $992,885 the prior year,

But overall, the CEO’s pay rose to $9.6 million from $8.1 million. His biggest percentage increase came in non-equity incentive compensation of $2.1 million, a jump of 175.7 percent from $768,800 the prior year. But that brought it more in line with the $1.7 million in 2019 and that pattern held for all five men as pay in that category rebounded from last year.

Mucci had option grants of $2.6 million, up 39.6 percent from $1.9 million while his stock awards dropped 10.1 percent to slightly less than $4 million from $4.4 million.

CFO Efrain Rivera received pay of $2.9 million for the most recently ended year, an increase of 29.3 percent from $2.2 million the prior year. Mark Bottini, SVP of sales, earned $2.5 million, up 36.4 percent from $1.8. million; SVP of sales John Gibson was awarded $2.5 million, a rise of 34.6 percent from $1.9 million while Michael Gioja, SVP of IT and product development, earned $2.5 million, which was 35.1-percent higher than the $1.9 million the prior year.

The California Society of CPAs and CalCPA Education Foundation have hired Denise LeDuc Froemming, as president and CEO of both organizations. Froemming will move into the positions on October 18.

She replaces Rich Simitian, who has served as interim CEO since May. The job came open after Anthony Pugliese, who held the joint positions from January 2019, left to become CEO and president of the Institute of Internal Auditors in March

Froemming was most recently CEO and EVP of the Institute of Real Estate Management, which she had served since September 2017. Before that she was COO and CFO/EVP of the American Health Information Management Association from September 2011

 Avalara has acquired Track1099, which markets the filing tax forms such as 1099s, W-2s and W-9s. Terms were not disclosed.

It’s the second acquisition of a 1099 software company by an indirect tax this year. In July, Sovos purchased 1099 Pro.

Track1099 is reported to have more than 40,000 customers. The company has provided 1099 filing on a tiered, per-form pricing basis and an annual subscription for W-9s.

“By integrating Track1099’s capabilities into our compliance document management suite, Avalara can support and automate additional annual requirements for our customers,” Jayme Fishman, Avalara’s EVP of corporate development, said in a prepared statement.

Products and services can be classified by taxability by Avalara Managed Tax Classification. The sales tax software company recently introduced the software package generates classifications for both state and local taxability determinations.

Machine learning is utilized to provide up-to-date classifications.

The new product, “helps mitigate over- and undercharging tax, while leaving room to apply special considerations, like SNAP and WIC eligibility,” Avalara said in its announcement. “Our deep product content database assists AI and machine learning algorithms and search functions to easily identify and classify products.”

2021 has so far ­­­­been markedly better than 2020 for some businesses, research conducted by CPA Trendlines in partnership with Avalara, finds it’s been worse for many accounting professionals. In fact, more than 52 percent of accounting and tax professionals surveyed said 2021 was “worse” than 2020. Those accounting professionals serving small businesses seem most downcast about the future. 

 Yet the outlook isn’t entirely grim: Lessons learned during the pandemic could help accounting professionals  and their clients meet challenges head-on.

The future success of small businesses and accountants may hinge on technology. In fact, more than 52 percent of the accountants surveyed said that of the changes brought about by the pandemic, “Keeping up with changes in online technologies” was highly important for small businesses with long-term impact. Furthermore, 54 percent believe their own firms need to adopt more cloud-based software, too.

Some key findings from the survey are highlighted below.

The long tail of COVID-19 is real                                                                                                                                                                                                                            Despite “continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic,” 13 percent of accountants surveyed believe the next 12 to 18 months will be “much worse” for small businesses. Another 26 percent expect conditions to be “somewhat worse,” while 17 percent say the next 12 to 18 months will bring no changes from the current situation, which is difficult.

Accountants were more optimistic about their own firms:                                                                                                                                                                                             *34 percent believe the next 12 to 18 months will be “about the same”                                                                                                                                                                          *9 percent believe the next 12 to 18 months will be “somewhat worse”                                                                                                                                                                        *1.5 percent believe the next 12 to 18 months will be “much worse”

More than one-third of respondents see a light at the end of the tunnel for themselves and their clients: 37 percent believe the next 12 to 18 months will be “somewhat better” for their clients, while 41 percent believe it will be “somewhat better for them.” There were even a few in the “much better” camp, but there are always one or two incurable optimists.

Good or bad, most of the accounting professionals surveyed believe the COVID-19 pandemic will have long-lasting impacts on their firms and their small business clients. Strategies that can help small businesses and accounting professionals succeed.  Some changes the pandemic forced upon accounting professionals and their clients will serve them well moving forward. Here are some examples: 

Rely less on brick-and-mortar stores                                                                                                                                                                                                                        After living and working through 2020, more than 84 percent of respondents think it’s moderately or highly important for small businesses to “pivot from brick-and-mortar to doing business online and virtually.” Though there are far fewer restrictions on in-person activities today than there were a year ago, new outbreaks could bring them roaring back at any time. Brick-and-mortar businesses that expanded online capabilities for customers and employees in 2020 will be better able to navigate any future lockdowns.

It’s been widely reported that the U.S. experienced 10 years’ worth of ecommerce adoption in just three months during the spring of 2020. But as anyone working remotely because of the pandemic well knows, the shift to online isn’t unique to retail. In written comments, some of the survey respondents who reported having a “better” year in their own firms attributed it (at least in part) to online or virtual interfaces:                                                                                                                                                                          *“We actually made some process changes ... and they worked.”                                                                                                                                                                                *“My business was already set up to operate virtually. COVID just pushed customers who would have normally been hesitant to operate remotely with an open mind.”             *“Clients are now used to sending info either electronically or by U.S. mail which tremendously cuts down on time wasted.”

Adopt more cloud-based technology                                                                                                                                                                                                                           As noted above, 54 percent of the accountants surveyed consider it “highly important” to adopt technology and workflows “for a more online or ‘virtual’ environment.” Just over 31 percent said that adoption is “moderately important,” while only 2 percent said it was “not at all important.”

Most respondents also see a need for “more cloud-based software, accessible anywhere, anytime, and constantly updated.” They also believe “more automation, less handwork” is key “to remain competitive.”

 Be adaptable and innovative                                                                                                                                                                                                                                       Tax professionals recognize the need for their companies to adapt and innovate. Indeed, this came in second on the list of “highly important,” and lowest on the “not at all important” list.

This could be due, in part at least, to COVID-19 tax relief: President Biden signed the sixth federal coronavirus relief bill nearly one year after former President Trump signed the first. Businesses were given three extra months to file income tax in 2020, and one more month to file in 2021 (though estimated payments were due April 15, 2021). On top of the federal assistance programs, states provided a wide variety of state-specific tax assistance. It was a lot for everyone to navigate, particularly accountants and bookkeepers.

2020 challenged tax professionals in other ways, too. Many were forced to work remotely during 2020, and some continue to do so. It took adaptability and innovation to learn how to best handle clients’ needs securely, while working from home (perhaps while caring for children or other family members). Out of necessity, firms long accustomed to pushing paper discovered how helpful cloud-based options could be.

In written comments, survey respondents advised their colleagues to “Stay client-focused,” “Be innovative,” and “Keep up with technology.” Sound advice.

Automate sales tax compliance

When asked about online sales tax compliance, 38.95 percent of respondents said “some” of their small business clients were complying with new collection and remittance requirements. However, 39.37 percent said small businesses were “mostly not in full compliance.” 

These are sobering statistics.

For the noninitiates, most states now require certain out-of-state sellers to register with tax authorities then collect and remit sales tax. This is because the Supreme Court of the United States overturned a long-standing physical presence rule with South Dakota v. Wayfair, Inc. (June 21, 2018). Prior to the Wayfair decision, states were largely limited to taxing sales by businesses with a physical presence in the states. Post Wayfair, a physical presence is no longer needed (though physical presence in a state still creates a tax obligation): Businesses can create a sales tax collection obligation solely through their economic activity in a state, or economic nexus.

On the eve of Wayfair’s third anniversary, all but two states with a general sales tax currently tax remote sales. Once Florida starts enforcing economic nexus on July 1, 2021, Missouri will be the last non-economic-nexus state standing — and a bill that would establish economic nexus in Missouri is sitting on Governor Mike Parson’s desk.

In other words, this isn’t some passing fad. States are serious about taxing remote sales in this age of ecommerce, and COVID-19 underscored that need. When consumers were reliant on online sellers, states that taxed those sales brought in more revenue than those that didn’t.

Accounting and tax professionals know this, and many are hoping that “technology will be able to provide tools to assist with compliance,” as one respondent wrote. Currently, only about 12 percent of the accountants surveyed say the handle “most” sales tax issues. It’s far more common for accounting professionals to handle “some” (36 percent) or “none” (24 percent).

Don’t wait for hell to freeze over

According to CPA Trendlines, 2021 has been “The Tax Season from Hell.” You don’t need to wait for hell to freeze over to simplify tax compliance. Sales tax automation software helps companies streamline sales tax compliance. In fact, nearly half the states in this country encourage businesses to use cloud-based sales tax solutions.  

The 2021 EU ecommerce VAT package that was effective July 1 is having a major impact on ecommerce businesses with customers in the EU. U.S. sellers should pay particularly close attention to the new  EU marketplace deemed supplier rules, which are similar to the U.S. marketplace facilitator laws for sales tax on ecommerce sales, and impact two types of cross-border transactions:

*Goods valued below €150 imported by EU or non-EU sellers and sold to EU customers                                                                                                                                                                 *Goods of any value sold by a non-EU seller to an EU customer

Under the new regulations, marketplaces are liable to collect, report and remit VAT when they facilitate certain cross-border business-to-consumer transactions on behalf of their third-party sellers. To be considered facilitators, marketplaces must meet specific EU Council criteria, which stipulate:                                                                                                                             *Controlling the terms and conditions of the sale                                                                                                                                                                                                                         *Authorizing the charge to the customer for the payment of goods                                                                                                                                                                                                  *Ordering or delivering goods

Marketplaces are exempt from deemed supplier responsibility if they provide only one of the following services: payment processing; listing or advertising goods; or redirecting buyers to other online marketplaces. 

How the deemed supplier rule works for cross-border sales:

Once the marketplace becomes the deemed supplier, the sale between the seller and the customer is treated as two separate transactions for VAT purposes:                                                           *The seller sells the goods to the marketplace. This becomes a business-to-business (B2B) tax-exempt sale and no EU VAT is due.                                                                                                 *The marketplace sells the goods to the customer. This becomes a business-to-consumer (B2C) sale with the marketplace now responsible for collecting the VAT due based on the customer’s country of residence.

Here’s an example of how this would work:

Let’s say a U.S. merchant sells goods to French and German customers through an online marketplace. Previously, the seller had to be VAT-registered in France and Germany in order to charge 20-percent VAT to its French customers and 19-percent VAT to its German customers. Effective July 1, under the new rule, the seller becomes the underlying supplier and the facilitating marketplace becomes the deemed supplier, purchases the goods from the seller, resells them to EU customers, collects the VAT, and reports the sales through either local VAT registration or single EU Import OSS for those sales.

Marketplaces must also keep detailed records of sellers’ transactions to show VAT has been correctly accounted for and electronically maintain these records for 10 years from the original transaction date. The marketplace won’t be held liable for underpaid VAT if the seller failed to provide the correct information required for the VAT calculation and the facilitating marketplace can reasonably show it wasn’t aware of the error. It’s also important to note that while the marketplace facilitator is responsible for VAT, it may not be responsible for other obligations related to the sale, such as product liabilities.

When the special arrangement provision applies:

The EU ecommerce VAT regulations include a special arrangements provision, which allows sellers or deemed supplier marketplaces to opt out and pass the VAT collection role to postal services. This is exclusive to the EU reforms; the U.K.’s marketplace deemed supplier rule doesn’t include this option. Additionally, the U.K. rules call for use of a regular U.K. VAT return rather than the IOSS import return.

Where U.S. sellers can turn for help:

Cross-border trade rules are already complicated. While the U.K. and EU ecommerce VAT reforms aim to increase confidence in global ecommerce sales, U.S. sellers may find these changes create yet another layer of complexity and a barrier to international sales. It can be difficult to keep up with ever-changing cross-border compliance obligations while focusing on expanding into new markets and keeping customers happy.. Learn more about managing VAT compliance