Improve Your Practice With SaaS

Column: From the Trenches

From the August 2011 Issue

There are ample articles trying to convince you of the value of Cloud Computing. There are three primary application approaches for the cloud: 1) Backup, which we have reviewed in prior columns covering products like NetRescue, Gillware and eFolder, 2) Hosting, including companies like CPAASP InsynQ, Awensa, Cloud 9 and Real Time Data Services, Thomson Reuters, or CCH, and 3) Software as a Service (SaaS) applications that are multi-tenanted and run through a browser. The focus of this column is on specific SaaS applications that can help you and your clients. Areas of interest include Accounting, Budgeting, Forecasting & Business Intelligence, Sales & Use Tax products, and Confirmations that minimize fraud on both cash as well as on AR and AP. SaaS tools often eliminate implementation complexity and reduce deployment time.

Today, technology can solve business problems in multiple ways. Historically, we used service bureaus, but most applications for the last 20 to 25 years have been run on-premise with local area networks. SaaS applications “in the cloud” have appeared over the last 10 years or so, and the variety and quality of applications are improving all the time. Combining on-premise with cloud applications or “hybrid” is the approach that should be the most effective for the foreseeable future. You may want the security of keeping everything on-premise, or you may want the convenience, minimal technical issues and possible economic benefit of placing everything in the cloud. If you are looking to solve your business needs or to solve your client’s needs in the best way possible, we expect a hybrid blend of on-premise or SaaS for some time to come.

Confirmations

One of our favorite SaaS applications is available from Confirmation.com, who has developed tools for audit confirmations that not only include cash confirmations, but have added a feature for AP response. There is no charge for small businesses to register as a responder, and we strongly urge you to encourage your clients to register. Confirmation will verify the business credentials, and then the client can respond to inquiries electronically and in a secure fashion. If your client has an employee that provides false information in response to an auditor's confirmation request, that individual can put that company at risk of being associated with financial fraud. The traditional paper-based process auditors use to confirm their client's payable and/or receivable balances doesn't control where confirmation letters are sent or prevent a rogue employee from sending a false response. An electronic confirmation saves time, centralizes responses, archives responses electronically, increases accuracy and increases response rates.

Sales Tax

In many U.S. jurisdictions, it is difficult to calculate Sales Tax accurately, particularly as the number of jurisdictions approaches 20,000. With SaaS offerings, the tax rates can reflect the current law and accurately calculate for a given location. Products like Avalara AvaTax, SpeedTax, Sabrix, and TaxWare provide tax calculations that comply with the multiple levels of tax, including state, local, school district, transportation and other special taxes. Free sales tax calculators are available on the Avalara site. Avalara also has a CPA firm program to support processing sales tax for clients. Beyond the calculations, the company can also complete Sales Tax returns, Use Tax returns, efile as allowed and make the sales tax payments electronically.