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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In a world where time is money, businesses can no longer afford to rely on outdated payment methods that hinder growth and competitiveness.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!

Billable Hours vs. AI: The Battle for Accounting’s Future

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Just as cloud accounting revolutionized the industry, AI is poised to be the next game-changer that will redefine the benchmarks for productivity and success in accounting. In a recent episode of The Accounting Podcast, David Leary and I explored the transformative potential of AI and its impact on the accounting industry.

The Cloud Accounting Revolution

To understand the potential impact of AI, it’s essential to look back at how cloud accounting transformed the industry. Cloud accounting reduced the time for traditional accounting and bookkeeping work by 80-90%. It forced firms like mine to adapt their business models and pricing strategies to remain competitive. 

As I mentioned in the podcast, “My career was in outsourced accounting. Cloud-based accounting cuts the time required to do traditional accounting and bookkeeping work by 80 to 90%. I couldn’t bill by the hour. If I did, I would not have a business.”

AI: The Next Frontier of Productivity

AI advancements in banking and accounting already show remarkable potential to boost productivity. JP Morgan Chase and Bank of America’s AI-powered cash flow forecasting tools have cut human manual work by 90%. David Leary highlighted this incredible statistic: “About 2,500 corporate enterprise clients are now using this tool, and they’ve cut human manual work. So you want to care to guess how much they’ve cut it by? 90%.”

The implications for accounting firms are profound. AI could lead to the end of billable hours and timesheets due to significant productivity gains. As I shared in the podcast, “We are using AI to do the base layer of work, and we are going to then have experts who review that. We’re going to turbocharge our staff.”

These advancements demonstrate how AI can dramatically increase productivity, setting new industry efficiency benchmarks as cloud accounting did.

Embracing AI: The Key to Success

Despite the potential of AI, the accounting industry appears hesitant to embrace this technology fully. Despite high awareness, an Accounting Today survey revealed that only 19% of accountants have used AI tools like ChatGPT for work and personal reasons. This hesitancy could put firms at a competitive disadvantage.

And even if they overcome their hesitancy, overwork impedes AI adoption in traditional firms. As I mentioned in the podcast, “The firms that are overloading their people, they’re not going to be able to innovate in this way because it takes a lot of time.” 

The Future of Accounting in the AI Era

AI, like cloud accounting before it, is set to revolutionize the accounting industry by redefining benchmarks for productivity and success. However, the industry’s hesitancy to embrace AI could hinder firms from realizing its full potential. Accounting firms that proactively invest in AI automation and adapt their business models will be better positioned to succeed in the AI era. At the same time, those who resist change may struggle to keep up. 

The future of accounting is here, and AI powers it. Are you ready? To learn more about how AI is transforming the accounting industry and what your firm can do to stay ahead, listen to the full episode of The Accounting Podcast. Don’t miss out on this insightful and thought-provoking discussion!

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.