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Why Accounting Professionals Must Champion Instant Payments

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In a world where time is money, businesses can no longer afford to rely on outdated payment methods that hinder growth and competitiveness. The current payment landscape in the US, dominated by checks, ACH, and credit cards, presents significant challenges for businesses, particularly small and medium-sized enterprises (SMEs). As the global economy rapidly adopts instant payment systems, the US lags, creating significant obstacles for SMEs to compete effectively.

This article delves into the urgent need for US businesses to embrace instant payment solutions, drawing insights from a recent webinar, Understanding FedNow’s Impact on Your Clients, featuring Nick Chandi, CEO and co-founder of Forwardly. Chandi argued in the webinar, “As the global economy rapidly shifts towards real-time payments, US businesses, particularly SMEs, risk falling behind their international counterparts unless they embrace instant payment solutions that offer improved cash flow, reduced costs, and enhanced security.”

The Global Shift Towards Instant Payments

Instant payment systems have been gaining traction worldwide, with many countries already implementing or working on real-time payment solutions. Chandi says, “Currently, more than 70 countries have a real-time payment solution available: instant payments. Either they already have it, are working on it, or will have it this year or next year, including Canada.”

The rapid global adoption of instant payments puts pressure on the US to catch up and remain competitive in the international business landscape. This global shift underscores the urgent need for the US to modernize its payment infrastructure to support the growth and competitiveness of its businesses.

The Challenges of the Current US Payment Landscape

The current payment landscape in the US presents significant challenges for businesses, particularly SMEs. Slow payment methods lead to cash flow issues, hindering business growth and stability. Chandi highlights the severity of this issue, stating, “82% of businesses fail due to cash flow problems. Many of these businesses might have been profitable, but they didn’t have the money in the bank account when they needed to do payroll or pay their rent.”

In addition to cash flow problems, the high costs associated with traditional payment methods, such as credit card fees, eat into profit margins. Fraud risks expose businesses to financial losses and security concerns, particularly with checks. These challenges highlight the urgent need for instant payment solutions to improve cash flow, reduce costs, and enhance security.

The Benefits of Instant Payment Solutions

Instant payment solutions offer a range of benefits that address the challenges businesses face in the current payment landscape. These include:

  • Improved cash flow: With funds available in real-time, businesses can better manage their finances and invest in growth opportunities.
  • Reduced costs: Instant payments eliminate the high fees associated with credit card transactions and the processing costs of checks and ACH.
  • Enhanced security: Real-time payment systems, like Fednow, incorporate robust security measures to mitigate fraud risks.

Chandi adds, “I believe eventually it will end up similar to how we handle ACH. There will be some responsibilities on the bank side to ensure both parties are real and there’s no fraud happening.” 

The benefits of instant payment solutions directly address the urgent need for US businesses to modernize their payment processes and remain competitive in the global economy.

The Path Forward

Adopting instant payments in the US is crucial for leveling the playing field for SMEs in the global economy. Accounting professionals and financial decision-makers are vital in advocating for and implementing instant payment systems in their organizations. By embracing instant payments, US businesses can contribute to a more resilient, efficient, and secure financial ecosystem.

To understand the urgent need for instant payments in the US, we encourage readers to watch the full webinar recording featuring Nick Chandi. As an accounting professional or financial decision-maker, now is the time to explore instant payment solutions for your organization and take proactive steps toward implementation. Doing so can help your business clients succeed in an increasingly competitive global market.

From Modifications to Abandonments: A Deep Dive into ASC 842’s Most Complex Scenarios

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Adopting ASC 842 has completely updated lease accounting, presenting CPAs with a brand new set of guidelines for accounting for the various changes made to a lease agreement over its term. In a recent webinar, Jaron Moss, a CPA and technical accounting consultant at FinQuery, and former auditor, delved into the intricacies of applying ASC 842 to various lease scenarios, highlighting the challenges CPAs face in ensuring accurate financial reporting and compliance.

This article explores how the new lease accounting standards impact the day-to-day work of accountants, some of the complex scenarios encountered, and the skills and knowledge needed to navigate these complexities effectively.

Lease Modifications and Reassessments: Adapting to Changes

Lease modifications and reassessments are common scenarios that require CPAs to apply their understanding of ASC 842 to ensure accurate financial reporting. As Jaron Moss explains, “A modification is a change in the terms and conditions of a contract that results in a change in the scope or consideration of a lease. Essentially, you go to the lessor, renegotiate the contract, and you get a new contract. That’s a modification or amendment.”

Modifications involve changes in lease terms, while reassessments occur when the lessee’s facts and assumptions change without renegotiating with the lessor. Accounting for modifications and reassessments differs in terms of:

  • Reallocating consideration
  • Reassessing lease classification
  • Updating discount rates

Navigating lease modifications and reassessments requires a deep understanding of ASC 842 and the ability to adapt to changes in lease contracts.

Partial Lease Terminations: Two Approaches to Consider

Partial lease terminations present another complex scenario CPAs must handle in accordance with ASC 842. These occur when a lessee reduces the leased assets to a lesser amount. Accountants must be aware of two approaches for accounting for partial terminations:

  1. Adjusting the right-of-use asset (ROU asset) proportionate to the change in the lease liability
  2. Adjusting the ROU asset proportionate to the change in the asset itself

Calculating adjustments to the lease liability and ROU asset, and a gain or loss on the partial termination requires a thorough understanding of the different approaches to ensure accurate accounting.

Lease Impairments and Abandonments: Identifying and Accounting for Complexities

Lease impairments and abandonments are complex scenarios that require CPAs to apply judgment and knowledge of ASC 842 and related guidance. “When a lease impairment is recognized, the carrying amount of the lease is adjusted downward to its recoverable amount, which is the higher of the fair value less the cost of disposal or its present value of future cash flows,” explains Jaron Moss.

Lease impairments occur when the recoverable amount of a leased asset falls below its carrying amount. Lease abandonments occur when the lessee stops using a leased asset before the lease term expires without the lessor’s consent. Accountants must be able to identify and account for lease impairments and abandonments appropriately. Leveraging technology allows CPAs to handle complex calculations more efficiently and focus on providing value-added insights.

As Jaron Moss states, “Keep in mind, using a tool is one of the best ways to handle these types of complex lease changes, so you don’t have to spend your time on these tedious, complex calculations. You can focus on the areas that add more value to your organization.” 

Those looking for a tool to assist with the complexities of lease accounting and compliance should consider the solutions offered by FinQuery.

Embracing the Future of Lease Accounting

The adoption of ASC 842 has significantly impacted the accounting profession, requiring CPAs to stay up-to-date with the latest guidance and best practices. Accountants who can effectively navigate lease accounting complexities will be better positioned to serve their clients and organizations in the post-ASC 842 landscape.

To gain a deeper understanding of the complexities of lease accounting under ASC 842 and learn how to navigate these challenges effectively, watch the webinar recording.

How QuickBooks Online’s Latest Features Streamline Workflows and Boost Efficiency

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In the latest Unofficial QuickBooks Accountants Podcast episode, hosts Hector Garcia and Alicia Katz Pollock dive deep into QuickBooks Online’s recent enhancements, driven by user feedback and the need to help professionals transitioning from QuickBooks Desktop. The discussion highlights new features, such as improved navigation between invoices and estimates, credit limit settings, batch import of customers and vendors, and internal customer notes – all designed to enhance user experience and workflows.

Let’s explore how QuickBooks Online actively listens to user feedback, what specific pain points these updates address, and how these changes empower professionals to serve their clients better and grow their practices.

Seamless Navigation and Streamlined Workflows

One of the most significant enhancements discussed in the episode is the improved navigation and workflow between invoices and estimates in QuickBooks Online.  Alicia highlights the importance of the “Manage” button, saying, “All the options that you’re trying to find are all in there.” 

The new “Manage” button and “Suggested Transactions” feature allow seamless navigation between related invoices and estimates. This update addresses a common pain point for users transitioning from QuickBooks Desktop accustomed to a more efficient workflow.

Enhanced Customer and Vendor Management

The new credit limit feature allows professionals to set credit limits for each customer, helping them manage risk and maintain financial control. This addition provides a valuable tool for professionals to ensure their clients remain within acceptable credit boundaries, fostering healthier financial relationships.

Furthermore, with its spreadsheet-like interface, the batch customer and vendor import feature streamlines the process of adding and updating customer and vendor information. Alicia praises this update, saying, “You’ve always been able to import a spreadsheet to add to customers and vendors. But seeing the grid in the software is a step forward.”

The Power of Collaborative Insights and Diverse Expertise

Throughout the episode, Hector and Alicia’s discussion highlights the value of collaborative insights and diverse expertise in navigating the evolving landscape of QuickBooks Online. Hector, as an ex-banker, provides unique perspectives on the implications of QuickBooks’ new financial offerings, such as the “Get Paid Up Front” feature becoming a line of credit.

Meanwhile, Alicia shares her hands-on experience with the software, offering suggestions for further improvements and highlighting the importance of staying current with the latest features and best practices. She mentions her updated book, “QuickBooks Online from Setup to Tax Time,” as a valuable resource for professionals looking to deepen their understanding of the platform and adapt to its ongoing changes.

Embracing Change and Thriving in the Digital Age

From improved navigation and workflow to enhanced customer and vendor management, these updates provide professionals with the tools and insights they need to streamline their work, better serve their clients, and grow their practices. To learn more about these exciting updates and discover how QuickBooks Online can revolutionize your practice, listen to the full episode of the Unofficial QuickBooks Accountants Podcast.

Alicia Katz Pollock’s Royalwise OWLS (On-Demand Web-based Learning Solutions) is the industry’s premier portal for top-notch QuickBooks Online training with CPE for accounting firms, bookkeepers, and small business owners. Visit Royalwise OWLS, where learning QBO is a HOOT!

The Power of Strategic Marketing: Transforming Your Accounting Firm into an Industry Leader

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How can your firm stand out and thrive in a crowded market where countless accounting firms vie for clients’ attention? The answer lies in strategic, targeted marketing. In this insightful webinar, Whitney Hesmer, co-founder of Markology, shares her expertise on the importance of focused marketing approaches for accounting firms. By investing in targeted strategies such as SEO, content marketing, and leveraging communities, accounting firms can differentiate themselves from competitors, build trust with potential clients, and establish themselves as authorities in their chosen niche.

Finding Your Niche

One of the most crucial aspects of targeted marketing is identifying and focusing on a specific niche. As Hesmer emphasizes, “From a marketing point of view, when we talk about niche, what we’re really talking about is narrowing down your audience. So not taking a scattergun approach to marketing.” Concentrating on a particular industry, location, or specialty lets you differentiate your firm from competitors and tailor your marketing messages to resonate with your target audience.

Narrowing your focus allows you to allocate your marketing resources more effectively and establish your firm as an authority in your chosen field. Instead of trying to compete with larger, generalist firms, you can carve out a unique space where your expertise shines. This targeted approach not only helps you attract the right clients but also enables you to provide specialized services that command higher fees.

Investing in SEO and Content Marketing

Investing in search engine optimization (SEO) and content marketing is essential to attract and nurture leads in your niche. As Hesmer points out, “Content marketing is anything from blogs to videos to guides. It’s building yourself as an authority in the space to speak on your topics of expertise.” By consistently creating valuable content tailored to your target audience, you can build trust with potential clients and position your firm as a thought leader.

SEO goes hand in hand with content marketing, ensuring that your website and content rank high in search engine results for keywords relevant to your niche. By optimizing your online presence, you can attract organic traffic from potential clients actively seeking the services you offer. Investing in these strategies ensures that your ideal potential clients will find you at the right time rather than you having to seek them out actively.

Leveraging Communities and Video Marketing

In addition to SEO and content marketing, Hesmer highlights the power of leveraging communities and embracing video marketing to expand your firm’s reach: “Webinars, podcasts, leveraging other communities. This is a great way to capitalize on other people’s audiences, leverage each other’s audiences, and share in the resource building.” Collaborating with complementary businesses and thought leaders in your niche allows you to tap into new audiences and showcase your expertise to a broader group of potential clients.

Video marketing, in particular, has become increasingly important in today’s digital landscape. By creating engaging video content, such as webinars, tutorials, or thought leadership pieces, you can connect with your audience more personally and demonstrate your knowledge and skills dynamically and visually appealingly. Video content is also highly shareable, spreading your message organically through social media and other online channels.

Navigating the Evolving Marketing Landscape

As the marketing landscape continues to evolve, with changes in Google search algorithms and the rise of artificial intelligence, accounting firms must stay adaptable and informed. While these changes may seem daunting, they also present opportunities for firms that embrace targeted, innovative marketing strategies. By staying attuned to industry trends and continually refining your approach, you can position your firm for long-term success in an ever-changing market.

In today’s competitive landscape, strategic, targeted marketing is no longer a luxury but necessary for accounting firms looking to thrive. By identifying and focusing on a specific niche, investing in SEO and content marketing, and leveraging communities and video marketing, your firm can differentiate itself, build trust with potential clients, and establish itself as an authority in your chosen field. 
To learn more about how your accounting firm can harness the power of strategic, targeted marketing, watch the full webinar and discover the insights that can transform your business. With the right approach and a commitment to continuous improvement, your firm can unlock the power of targeted marketing and achieve lasting success.

Navigating the Ever-Changing Tax Landscape: Insights from Federal Tax Updates Podcast

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In the fast-paced world of taxation, staying ahead of the curve is not just a matter of professional excellence; it’s a necessity for survival. The latest episode of Federal Tax Updates, hosted by Roger Harris and Annie Schwab, delves into the complexities of the current tax landscape, highlighting the challenges businesses and individuals face in staying informed and compliant.

Worker Classification: A Tightrope Walk

One of the most significant challenges in the current tax environment is navigating the intricacies of worker classification. With the Department of Labor (DOL) introducing a new six-factor test and the IRS maintaining its own rules, businesses must stay vigilant to avoid misclassification and its potential consequences.

As Roger Harris pointedly remarks, “We all understand the temptation and the belief that you can treat a worker as an independent contractor for 90 days until they work out. However, there’s no provision that allows for that.” This underscores the need for businesses to proactively understand and comply with worker classification rules to avoid penalties and legal issues.

COVID-19 Relief Measures: Staying Afloat in Uncharted Waters

The ongoing changes to COVID-19 relief measures, such as the Employee Retention Credit (ERC) and pending legislation, present another challenge for taxpayers. The moratorium on processing ERC claims and the voluntary program for those who may not qualify has created uncertainty for many businesses.

Roger Harris encapsulates this dilemma: “If a client comes in who is eligible for the Employee Retention Credit but has not applied for it yet, you’re between a rock and a hard place. Technically, the law still allows them to apply, but there’s a law floating around that could make it retroactive.” This highlights the importance of staying informed about the latest developments and adapting quickly to new circumstances.

Preparing for the Future: Navigating Tax Law Changes and Expirations

Looking ahead, businesses must also prepare for the potential expiration of Tax Cuts and Jobs Act (TCJA) provisions and the influence of political factors on tax policy. Roger Harris notes, “Election day is the first Tuesday in November. You may hear people talk about potential tax law changes, but I don’t expect anything to happen until after that election. We’ll get a sense of who’s calling the shots, but it’s going to be a major change.”

This uncertain landscape underscores the need for businesses to stay informed, consider the impact of potential changes on their financial planning, and cultivate a proactive and adaptive mindset.

Key Takeaways for Tax Practitioners and Their Clients

The hosts offered this advice to tax pros and their clients:

  • Stay informed about the latest developments in worker classification rules, COVID-19 relief measures, and potential tax law changes.
  • Seek guidance and understand the nuances of these developments to avoid penalties and ensure compliance.
  • Cultivate a proactive and adaptive mindset to navigate the ever-changing tax landscape effectively.
  • Stay attuned to the political climate and its influence on tax policy for effective long-term planning and strategic decision-making.

The Path Forward: Thriving in a World of Constant Change

As the tax landscape continues to evolve, tax practitioners and their clients must embrace a mindset of continuous learning and adaptation. By staying informed, seeking guidance, and remaining proactive, businesses can confidently navigate the current environment’s complexities.

The insights shared in this episode of Federal Tax Updates serve as a valuable compass for those navigating the ever-changing tax landscape. Listen to the full episode to dive deeper into these critical topics and gain more valuable insights.