FAQ on Decrypting Tax Documents with AES Crypt

This week’s episode of the excellent Security Now! podcast (#599, starting at 53:10) discusses the use of AES Crypt by clients to encrypt tax data when sending it to practitioners. (I assume that those documents are destined to a professional preparer, like you, the gentle reader of this blog). While I won’t restate the original blog post (which is at http://cantus.us/encrypt-your-tax-documents-before-you-send-them/), the method described is a relatively simple way for an end user to encrypt and send a group of encrypted files over an insecure medium like Dropbox or other consumer-grade file sharing tools.  While the method described in the post can be implemented poorly (weak passwords, sending the wrong file, using e-mail, etc.), the basic methodology appears sound – but you need to evaluate the methods you approve for clients to use transmitting data.

Continue reading “FAQ on Decrypting Tax Documents with AES Crypt”

News Roundup- March 13th

Some of the current events I’ve been following include the following stories:

 

The Business Model Problem With Unicorns

There is a fundamental problem with Silicon Valley – too many startups seem to have a business model of “build to flip”. This model – which I’ve seen in the past – is a model in which the company has little, if any, interest in creating a serious, viable product, and is instead only interested in selling out to someone else. The short term thinking reminds me of the 1960’s movie musical, “The Music Man”, where a scam artist plans to sell band instruments to locals in “River City” and skip town as soon as they pay for the horns. One can see the signs of excess in the news – sex and shots in the stairwells at Zenefits, and magazine covers which show the hundreds of “unicorns” (a slang term for a private company valued over $1 billion) running for the exits, and most finding that there is no way out. When MVP describes a “minimum viable product” instead of a “most valuable player”, it’s a sign that the valuations may have “jumped the shark”.  The reported “shots and sex in the stairwells” at Zenefits will be the punch line for the bursting of a modern day valuation bubble, just as a certain sock puppet was a symbol of an earlier period of excess.

This focus on market capitalization instead of net income – or even producing a viable product – is a particularly intractable problem for items in the financial technology (“FinTech”) sector, where the industry actors (accountants, financial institutions) thrive on long-term stable relationships with customers, and mistakes are remembered for decades. Unlike other sectors of the economy, entrepreneurs are interested in dealing only with “grown ups” when it comes to their business finances. The constant change in features and application availability makes the users hesitant to adopt any solution from these companies, whose constant product and business model iteration makes their customers feel like they’re living a very strange version of Abbott and Costello’s “Who’s on First”.

There are opportunities out there – some such opportunities include automation of account assignment to transactions imported from banks, automated reconciliation of statements, and creating “digital plumbing” to solve the problem of digital silos in the very fragmented cloud economy.  Unfortunately, these tasks are not easy – which is why nobody is doing them successfully.  (I hope someone solves these problems soon.)

It also strikes me that there is excessive focus on HOW the products are delivered (e.g. browser/public cloud) instead of WHAT the products actually do for their users. This is accomplished by burying prospective buyers in a blizzard of BS before they buy. A partial list of “danger words” which indicate that this style of groupthink may exist includes cloud (all kinds), user experience, ecosystem, seamless integration, minimum viable product, iteration, market capitalization, and non-GAAP operating results. If you hear most of these words, I’d stay away – or at a minimum, hold onto my wallet. The unicorns are running for the exits, and I fear that some will be trampled as investors realize that they have bought into applications without a viable long term model for operating as a profitable business.

 

Business Grade Hardware Only, Please

One of the more important things that CPAs and other financial professionals should do is to buy good quality hardware.  This can be accomplished in a number of ways, but I have two basic rules for purchasing computer hardware

The first rule: Buy hardware produced by a leading manufacturer.

While you can save a little money by purchasing “off brand” hardware, you will almost always lose that time when you have to deal with proprietary device drivers or cheap build quality.  Although you could purchase that computer from someone besides HP/Dell/Lenovo, I have a suggestion:  Don’t do it.  The risk is too high, and the return is insignificant.  Don’t.

The second rule: Buy business grade hardware

Most computer makers have two grades of hardware: Home grade hardware and business grade hardware.  Unfortunately, many professionals pay more attention to the hardware branding rather than the build quality.  I generally feel good about the products coming from the “big 3” major manufacturers – Dell, HP, and Lenovo.  I would add to that list (insofar as build quality is concerned) the Microsoft Surface Pro line of tablets (but not the Surface tablet/laptop).  I also list Apple hardware as home grade – primarily due to the complexity of dealing with MacOS and Windows on the same machine.  Many people disagree with me on this point (the Apple fans, primarily), but given that I do speaking and consulting to CPAs, and they generally are required to use Windows applications, I generally discourage Mac adoption.  (I would remind you, the gentle reader, that it’s a free country, and if you want a Mac, go buy one – but don’t complain to me when your users can’t handle dealing with the cost, complexity, and memory requirements of Parallels desktop running a purchased Windows license – to each his (or her) own.)

My current working list of product lines which appear to be “Home Grade” vs. those which are “Business Grade” follows.

Business grade laptop/desktop hardware lines

· HP laptops: EliteBook, ProBook, ZBook

· HP desktops: EliteDesk, ProDesk, EliteOne, ProOne, Z-series

· Dell Laptops: Latitude, some Vostro, Precision Mobile Workstation devices

· Dell desktops: Optiplex, Precision

· Lenovo laptops: Thinkpad, B-series devices

· Lenovo desktops: M-series, P-series, Thinkcentre, Thinkstation

· Microsoft Surface Pro tablet/laptop

Home-grade laptop/desktop hardware lines

· HP laptops: Stream, Streambook, Pavilion , Phoenix, Envy, Omen, Spectre

· HP desktops: Stream, Pavilion, any others not in business grade device list

· Lenovo laptops: Ideapad, Flex, E, G, L, S, U, and Z-series

· Lenovo desktops: A, B, C, H, K, and Q-series.  Horizon and Erazer series devices

· Dell laptops: Inspiron, some Vostro

· Dell desktops: Inspiron, XPS, Alienware, 3000, 5000, and 7000 series

· All Chromebooks, Chromeboxes

· Microsoft Surface (not Surface Pro) tablet/laptops

· All Apple-branded laptops and desktops

 

Who Will Be The Profession’s Digital Plumber?

I’ve been using, supporting, and following accounting software developments since the 1990’s, and there’s a common problem which still needs to be solved:

“How will I get (my)(my client’s) data from (application one) into (specialized application two) so I can perform (task)?”

There have been a wide range of people who have taken on solving this problem, and almost every family of solutions (e.g. Intuit, CCH, Thomson Reuters, Sage, etc.) has solved the problem for their stack of solutions.  One can easily go from most of the major client bookkeeping products into that publishers tax application, and with a little more difficulty, one can pull data from QuickBooks desktop into the tax software.  All bets are off, however, when you step outside of your tax software’s family of solutions.

If you look at e-mail in the 1980’s, we had services like Prodigy and Compuserve, which in their early iterations had closed e-mail systems – like those run by many companies.  In fact, I have had professional jobs in my career where I didn’t have internet-based e-mail – because it was a closed system.  Once these systems opened up, I had internet e-mail from Prodigy (fmpm09d@prodigy.com).

My friend Randy Johnston has often compared the “my tools only” integration strategy as a nationalist strategy – that is, you’re picking winners and losers in a war (e.g. NATO/Warsaw Pact).  Some of this is because of benign neglect, some due to economics, but part of this is an intentional strategy.  That’s OK – providers have no obligation to support competing solutions – but it’s still frustrating.

What we haven’t seen in the US is someone who will be the accounting data version of Switzerland for practitioners– a company which will put in tight integrations to everything.  The closest company to that strategy seems to be Caseware, which exports to most practitioner tax solutions – but their relatively small US market share diminishes their effectiveness in this role.  QuickBooks is probably as close as any app here – but that’s primarily due to its marketshare in the US.  Without good cross-platform integrations and effective/automated import/exports between the different provider cloud offerings, adopters are just trading an on-premises cloud island for a provider-hosted island.  If there’s no easy way to move traffic between islands, you’re just a castaway.

I will point out that Avalara does this successfully with hundreds of accounting/ERP solutions on the sales tax side, so it’s definitely possible, and I think their strategy will pay off in the long run.

I did a session on Digital Plumbing at the Sleeter Accounting Solutions Conference last year, and some companies are out there which do different tasks associated with this for general accounting solutions.  Leaders are ITDuzzit (now part of Intuit, no longer commercially sold), Zapier, and OneSaaS, but there are many nascent competitors in this space, and I haven’t seen anyone reach scale yet in the practitioner market.

Chris Keall of the National Business Review in New Zealand points out today (link requires subscription) in a paid article that Kiwi company Common Ledger has received a relatively small amount of funding ($1MM NZD) to develop solutions in Australia/New Zealand.  What a pity that we don’t have anyone taking on this task in the US.  VC’s seem to be throwing money like crazy at cloud products, but nobody seems to be helping the various data clouds automatically talk to each other.  What a pity.

If any of you readers are aware of anyone who is solving this problem, please let me know.  If accounting is going to become more automated, we have to move past 1980’s solutions like manual import of CSV files and transition into real solutions which are less of a pain to implement.  We’ve seen this change radically with bank feeds in the cloud accounting solutions– when will we see it with other accounting data flowing between various best in breed practitioner solutions?

 

Second Annual CPA Firm Operations and Technology Survey Released

As many of you know, I do most of the data analysis and writing associated with the CPA Firm Operations and Technology Survey published by CPA Trendlines.  My co-authors, Dr. Leslie Garrett and Randy Johnston, and I  released the new 2015 edition of the survey today.  The survey was an 86 question survey, was promoted by most major publications serving the profession, and offers over 180 pages of tables, charts, and analysis about over 600 US and Canadian accounting firms.

The press release issued today follows.

ANNOUNCING THE RELEASE OF THE 2nd Annual ACCOUNTING FIRM OPERATIONS AND TECHNOLOGY SURVEY EBOOK

April 09, 2015, Hutchinson KS and Minneapolis, MN – Randy Johnston, CEO and Founder, Network Management Group, Inc., Leslie Garrett, PhD, CEO of Insight Research Group, and Brian Tankersley, editor of the publication announce the release of their 2ndAnnual Accounting Firm Operations and Technology survey eBook. The eBook is published in cooperation with Rick Telberg, President and CEO of CPA Trendlines.

“We are very pleased with this year’s survey participation, we have respondents from all 50 states, and our number of respondents doubled over last year’s results, further validating the data,” said Garrett. The 2nd Annual Accounting Firm Operations and Technology Survey eBook features results from 86 survey questions presented using bar charts and tables showing last year’s results against this year. Every survey question features a table revealing how firms of different sizes responded which allows readers to benchmark their practice against others of similar size.

The value-added content in the Accounting Firm Operations and Technology eBook includes:

  • Inside the Numbers: For each section of the survey (Demographics, Practice Management, Technology Management, Operating Systems, Computer Hardware, Application Software, File & Date Storage/Management, Remote Access/Internet/Telecommunications, and Technology Decision-making, Annoyances and Trends) our research, analysis and editorial team reports on significant findings in the data. The content in these sections are data-driven based on survey results.
  • Consultants Counsel: For each section of the survey our research, analysis and editorial team provides consulting commentary to help readers understand how they might apply the results to their practice, which aids in planning and future decision-making.
  • Trend Watch: For select results, our research, analysis and editorial team identified trends that seem to be developing, which gives the reader the opportunity to adjust their operations and technology planning accordingly.
  • Thought Leadership: Several of the profession’s most respected thought leaders weigh-in and provide insight into select results. Articles have been contributed by Richard Koreto, Managing Editor of AccountingWEB, Daniel Hood, Editor-in-Chief ofAccounting Today, Jim Boomer, CIO and Shareholder, Boomer Consulting Inc., Gail Perry, Editor-in-Chief of CPA Practice Advisor, Rick Telberg of CPA Trendlines, and Bob Scott, Editor-in-Chief of The Progressive Accountant.

***NEW THIS YEAR***

Trend Watch

With two years of data to report on, our team noticed trends developing in certain operational and technology areas. Where trends are apparent, a Trend Watch section appears in conjunction with the bar chart or table, further illuminating to the reader results that are worth paying additional attention to. “After looking carefully at the results, the editorial team thought that identifying trends was important and convenient for the reader,” said Johnston.

Productivity, Profitability, Risk Mitigation Awards

Respondents of the 2nd Annual Accounting Firm Operations and Technology Survey were asked to identify the accounting practice application software that has had the greatest impact on their firm in each of these three areas: 1) Productivity, 2) Profitability, and 3) Risk Mitigation. Congratulations to the 2015 award-winners:

  • Productivity: Intuit QuickBooks
  • Profitability: CCH, a Wolters Kluwer business
  • Risk Mitigation: Thomson Reuters

About the eBook

The Accounting Firm Operations and Technology eBook is 200 pages in length and features 86 survey questions and overall results for each survey question presented in easy-to-understand charts and tables. The eBook also provides survey results by size of firm broken down by solo practitioners, small firms (1 to 10 employees), mid-sized firms (11 to 49 employees) and large firms (over 50 employees).

Media Contact:

Leslie Garrett, PhD, CEO and Founder

Insight Research Group

lesliegarrettphd@gmail.com

To secure your copy of the eBook, visit the CPA Trendlines store, powered by Bay Street Group LLC, at cpaclick.com/nmgi-irg-1

 

Recent Reading and Writing, March News Update

I’ve been quite busy over the last couple of months, but unfortunately, I don’t have a lot which I can show you, the gentle reader of this blog.  A listing of some of the writings I’ve worked on in the last few weeks is as follows:

I also have been meeting with software publishers and reading voraciously preparing for this year’s tech conferences and seminars, which start for me next week in Philadelphia, and take me around much of the continental US this year.

I hope you’ll plan to attend the 2015 @AICPA Practitioners/TECH+ Conference in Orlando June 7-June 10th. You can save an extra $100 w/code TAC http://pstech.cpa2biz.com/

I share articles which I find interesting on Twitter – I’m @BFTCPA.  Some of the stories I’ve been following include:

I’m sad to see that The Sleeter Group has sold to Diversified Communications, but I know it was an offer which Doug and Sherrill couldn’t refuse.  Congratulations, and we hope to continue to work with you in the future.

Be careful out there, people.  I look forward to seeing many of you on this year’s journey.

 

I’m Back, Peeps!

I was going through my e-mail this morning, and saw that one of my favorite blogs, Jr. Deputy Accountant (Rated R), was back online after an extended absence.  This made me realize that I had left you, the gentle reader of this blog hanging.  Well, hang no more.  I’m back.

I’ve been very busy over the last few months, and won’t bore you with all of the details.  Some of the stuff I’ve been working on includes:

  • Analyzing the data from the 2nd Annual CPA Firm Operations and Technology Survey, including crunching most of the data and writing most of the copy.  This year’s survey included over 600 firms of all sizes.  I expect it to come out sometime around the middle of March.  (Watch out people, I have data to back up my rants now)
  • Writing a feature article on how the world of electronic payments is changing for the Tennessee CPA Journal.  I expect the article to end up in a number of other state CPA newsletters before the year is over.
  • Attended the 2015 Consumer Electronics Show in Las Vegas with my friend and mentor, Randy Johnston.  (We plot world domination together as a hobby)
  • Wrote three conference sessions for K2 Enterprises – an update on CPA Firm Technology, an overview presentation related to remote access (including some stuff comparing VDI vs RDS), and a third session on electronic payments.

I’ve also worked on too many writing and consulting projects to mention over the last few months.  2015 is picking up nicely, and I’m making the rounds to software vendors slowly this spring.  I’ve already been to Toronto, Atlanta, and have upcoming trips to San Francisco, Dallas, Detroit, Minneapolis, Philadelphia, Seattle, and many other cities before teaching season kicks off in early May.

If you’re looking for my quick takes on tech news, just follow me on Twitter (@BFTCPA).

 

Writing

I write for a number of accounting industry publications.  Some of my past work includes the following articles:

AccountingWeb

CPA Practice Advisor

State CPA Society Publications 

 

 

 

K2 Enterprises Announces 2014 K2 Quality Awards

FOR IMMEDIATE RELEASE

October 1, 2014 – K2 Enterprises has released their annual technology awards for 2014.  “It was quite interesting this year as there were no unanimous winners.  There were votes for many solutions.  We did have some repeat winners this year but no unanimous winners” said Val Steed, CEO K2 Enterprises.  K2 has been providing the K2 Quality Awards now for thirteen years. “The products represented by K2 quality awards are among the best of class available today. Our instructors and attendees recognize the merits of the offering and the benefits that users enjoy.” said Randy Johnston, Executive V.P. “Anyone who can sway over our team members really deserves the recognition.  Congratulations to all.” added Brian Tankersley, Director of Strategic Relationships.

K2 Enterprises Annual Quality Awards are determined by a voting poll of the K2 Enterprises instructor team. The polling members of this team are Randy Johnston, Will Fleenor, Val Steed, Brian Tankersley, Tommy Stephens, Bob Spencer, Lawrence (Mac) McClelland, and John Keegan.

2014 Categories and Winners:

•Best Overall Mobile Strategy –  Sage North America

•Best New Mobile AppIntuit

•Reseller ProgramADP

•CPA ProgramQuickBooks Pro Advisor – Intuit

•Reseller ChannelOpen Systems

•New Product –  AdvanceFlow – Thomson Reuters

•New ModulePoint of Sale – Open Systems

•Management Strategy –  Biznet

•Technical SupporteFileCabinet

•Customer SatisfactionBillQuick

•Ease of UseWave Accounting

Marketing CommunicationsAvalara

Overall Quality – Doc.It

•Tax TechnologyUltraTax – Thomson Reuters

•Audit TechnologyEngagement – Wolters Kluwer

•Business Intelligence SolutionPower BI Suite – Microsoft

•Workflow SolutionXCM Workflow – XCM Solutions

•Small Business Accounting SolutionQuickBooks Online

•Small CPA Firm SolutionOffice Tools Professional

•Entry-Level Accounting Upgrade SolutionCYMA

•Top Hosting ProviderCloud9 Real Time

•Social MediaJennifer Warawa – Sage North America

•Cloud Power SolutionAccountantsWorld

•Cloud Ease of UseSage One – Sage North America

•Cloud Top Shelf AwardOffice 365 – Microsoft

•Cloud New ProductMicrosoft Online – Microsoft

•Cloud PortalShareFile – Citrix

K2 Enterprises is a Hammond, Louisiana based organization that provides continuing professional education services to the accounting profession and marketing consulting services to technology providers in the accounting market. K2 Enterprises delivers approximately 900 educational programs to over 40,000 professional accountants on an annual basis throughout the United States and Canada.

K2 team votes are influenced by end user feedback and experience from consulting and extensive teaching. Detailed biographies on each of the polled members can be found at http://www.k2e.com/team.

Contact: Caron Choate

Telephone: (888) 542-9390

Email:  caron@k2e.com