Blog

new-accounting-rule

There’s a New Accounting Rule and It’s Adding Trillions in Liabilities

Earlier this year, companies are required to record operating leases, such as equipment, office space, planes, and cars. It’s estimated that this new rule will pull up to $3 trillion into the spotlight, expenses that were previously often buried in footnotes rather than recorded on balance sheets.

Up to this point, companies were only mandated to record leases that led to the purchase of the asset. The Financial Accounting Standards Board has enacted this change to make it easier for investors to evaluate companies’ financial obligations.  

According to the International Accounting Standards Board, U.S. public companies are committed to $3 trillion in operating leases. Companies with the largest amount of operating leases include restaurants and retailers.

Leverage, which is measured in the ratio of debt to earnings or debt to equity, is fundamental to evaluating a company’s risk. This accounting rule change may force investors to alter the way they assess criteria to make investment decisions.

MSCI Quality index employs debt to equity as one of the major metrics in ranking companies, and if a company’s debt to equity ratio changes significantly as a result of this new accounting rule, it could get screened out of the index. In spite of that, Kevyn Dillow, accounting analyst at Moody’s Investors Service, clarifies that credit quality is not changing as a result of this new rule.

Adding another layer of complexity: some data vendors have yet to incorporate lease liabilities into a company’s total debt amount, and some don’t plan on it even in the future. This means that different platforms could ultimately run very different numbers, leading to inconsistencies in data metrics, which is a concern for many.

Flexi

Accounting rules change often, and Flexi knows you need software that keeps up. Whatever industry you work in–whether it be financial services, healthcare, insurance, or banking–Flexi can help keep you on top of the most current regulatory measures.,

Flexi’s powerful accounting software was built to simplify the complex processes that accountants face every day. Flexi understand how stressful the period close is, how complicated multi-entity books can be, and how frustrating audits are when accurate reporting is not easily available.

A laser focus on finance and accounting software has enabled the Flexi  team to scrutinize every step of the accounting process, and develop a solution designed to simplify every task. This “process-driven” approach delivers tremendous benefits to finance teams, including a faster, more accurate financial close.

Submit your information and get a demo of the Flexi suite today.

 

Category: Blog

Tags: , ,

white label accounting partner

What Makes a Great White Label Accounting Software Partner?

White label accounting software is an excellent choice for startups and small to midsize businesses. Small business owners report spending, on average, over 80 hours a year on business accounting, and the time spent can quickly spin out of control when dealing with complex accounting issues. Fortunately, outsourcing to a white label accounting software partner is a cost-effective and reliable option for managing your accounting needs.

White label accounting software is software produced by a company and then rebranded and sold by another company. This provides myriad benefits: you can focus your efforts where it counts, which is hugely important in startup and small business environments where staffs are smaller; you can save time, money, and resources; and, you have the best accounting software–the experts in the field–at your fingertips.

  • You can focus your efforts where it counts

If you’re working with a skeleton crew, every minute of every day is a precious resource. Being able to outsource complex tasks and processes can be a lifesaver. Instead of reinventing the wheel and developing an in-house accounting solution, take comfort in knowing that you can redirect your efforts to what you and your team are good at.

  • You can save time, money, and resources

By enlisting white label accounting software, you can save thousands. While a single accountant’s annual salary can be between $60,000 and $80,000, accounting software can be outsourced starting at just a few hundred a month. And in additional to the salary savings, you also save on overhead, training, hardware, benefits, and more.

  • You have experts at your fingertips

White label accounting software provides accounting expertise that a junior accountant who is not yet an expert in their field cannot provide. Having access to the experts gives you peace of mind that your accounting is always up to date and compliant.

How can Flexi help?

Flexi is one of the few vendors that has proven and delivered white label accounting solution integrations at scale for more than two decades. Flexi’s Industry Partnership (FIP) program provides software companies with the ability to OEM Flexi’s accounting solutions and seamlessly integrate them with their products through Service-Oriented Architecture (SOA) and web services.

World leading brands have relied on Flexi’s FIP program to gain a competitive advantage by quickly and easily expanding product offerings, increasing revenue, and providing customers with the convenience of a single-vendor solution, all while avoiding the cost and risk of in-house development.

The following attributes make Flexi a great white label accounting software partner:

  • Flexi significantly decreases time-to-market
  • Flexi eliminates the risk of stagnant, outdated software
  • Flexi strengthens customer loyalty with a more complete solution under your own brand
  • Flexi grows revenue through a proven partnership with a trusted leader in accounting software
  • Flexi provides expertise and a support team to ensure a smooth implementation

Learn more and explore a partnership with Flexi today. Call 800-353-9492.

 

Category: Blog

Tags: , ,

Cloud Accounting Statistics

Cloud Accounting Statistics You Need to Know

Cloud accounting software is making big waves in the accounting sphere. Cloud software is not only cost-effective and highly accessible, but it’s making data as accessible as ever.

Cloud software can be accessed from any device with an internet connection, at any time of day, by any user. Gone are the days of installing costly hardware that make data vulnerable to hackers, and gone are the days of heavily leaning on IT and infrastructure to get the job done.

With cloud software, many tasks can be automated, which not only saves time but also ensures data integrity and accuracy. And, while many people feel their data is less secure in the cloud than stored locally on their machines, encryption and tight security measures actually make the cloud more secure in many ways.

For these reasons and more, cloud accounting is the future. It’s easy to use, easy to implement and ensures that the reports you need are easy to create, access, and distribute.

Statistics you need to know if you’re considering the switch to cloud accounting software

Don’t take it from us: let the statistics paint the picture. New research shows that 67 percent of accountants prefer cloud accounting over locally installed software options and cloud software reduces labor costs by up to 50 percent. And, the market is growing. The market size is projected to reach $4.25 billion by 2023, from its current $2.62 billion.

Additionally, 58 percent of large companies are utilizing cloud accounting services, and by 2020, it is projected that 78 percent of small businesses will be relying solely on cloud technology. Companies that use cloud accounting exclusively are adding five times the clients than companies who do not, and on top of that, companies that exclusively use cloud accounting also saw a 15 percent revenue growth year over year.

Get on the cloud with Flexi

It’s easy to move to the cloud.

Trusted by enterprises for 25+ years, Flexi is among the most experienced accounting software providers in both the cloud and on-premise markets. Organizations of all sizes, particularly those with complex accounting requirements such as multi-entity and intercompany accounting needs, are benefiting from Flexi’s value: rich features, flexible deployment, easily customized, low maintenance and highly rated support, all at an attractive total cost of ownership.

Learn more about how Flexi can catapult your business today with its cloud-based services. Call 800-353-9492.

 

Category: Blog

Tags: ,

New Accounting Rule

How a New Accounting Rule is Getting CFOs Upset

Starting next year, public companies will be required to report operating leases as liabilities. Under this new rule by the Financial Accounting Standard Board, companies will be required to add to their books the debt-like obligations they incur to lease real estate, office equipment, airplanes, and more.

The Wall Street Journal estimates $3.3 trillion in operating liabilities to be worked into the corporate balance sheets of public companies due to this change. While these operating leases are currently resting in the footnotes, they will be front and center in next year’s financial reports.

The change leaves CFOs questioning whether they should renegotiate lease terms, provide specialized reports to lenders, or risk having their debts called by lenders. Legal fees, bank fees, and other fees, fines, and expenses could apply, and the corporate debt-to-earnings ratios will be disrupted, affecting borrowing power.

While the new rule is intended to improve transparency for investors and lenders and bring the U.S. closer to global accounting standards, compliance will result in time and money spent to observe the new rule. This could require new accounting processes or even new accounting software, not to mention the time and expense of staff training. This is undoubtedly a blow to the bottomline for many public companies who are now scrambling to gear up for this regulatory change.

While some CFOs will be seeking to amend loan terms, others may opt to produce one set of financials for regulators and yet another set for lenders. For some, the extra time to produce two different sets of reports is the best available option when the other option could involve hefty bank and legal fees.

As accountants and finance professionals, there is no time better than the present to familiarize yourself with the regulatory change and how it will affect U.S. business to ensure that your books–or your clients’ books–are ready.

The future with Flexi

Flexi knows that compliance is imperative for your business. Flexi provides tools and products to help keep your business up to speed with compliance and regulatory demands. As the accounting rules change, let Flexi help your business succeed.

Trusted by enterprises for 25+ years, Flexi is among the most experienced accounting software providers in both the cloud and on-premise markets. Organizations of all sizes, particularly those with complex accounting requirements such as multi-entity and intercompany accounting needs, are benefiting from Flexi’s value: rich features, flexible deployment, easily customized, low maintenance, and highly rated support, all at an attractive total cost of ownership.

 

 

Category: Blog

Tags: ,

Government Audit

A Government Audit Puts Pentagon in Hot Water Over Serious Non-Compliance Issues

A full financial audit of the Pentagon was conducted and the results showed a failing grade. Auditors requested that various financial irregularities be addressed.

Since the release of the audit results in November 2018, the press has been buzzing about the U.S. military’s assets, which are valued at $2.7 trillion. Over 600 locations were visited to conduct this audit, which involved the work of 1,200 accountants.

Auditors discovered that many back-office functions are not tracked sufficiently, making it very difficult to monitor the flow of cash in and out of the organization. The effort cost more than $400 million, and the Pentagon is being criticized for conducting such a costly audit that would undoubtedly be flawed.

In spite of the results, the amount of financial irregularities and compliance issues discovered during the audit were mostly viewed as unsurprising, and a few agencies did pass the audit: the U.S. Army Corps of Engineers, Civil Works; the Military Retirement Fund; the Defense Health Agency — contract resources management; the Defense Contract Audit Agency; and the Defense Finance and Accounting Service.

Specific instances of fraud were not called out in the report, but the report did specify “significant information technology systems security issues.” The audit also identified 20 “material weaknesses” in the department’s internal controls. The audit further specified that not all transactions are being properly recorded, which makes it very difficult to detect errors in financial statements. Historical cost data is also not being tracked sufficiently.

Rep Adam Smith (D-Wash.) said in a statement that “it is essential that we get the Defense Department to a position where Congress, taxpayers, and DOD itself can track and account for the money that is being used.”

Compliance is important and Flexi knows that

The recent Pentagon audit is a cautionary tale. Don’t let your business receive a failing grade on your next audit. Work with Flexi to ensure your accounting is always in line for your next audit by utilizing accounting compliance software.

Flexible posting and open architecture, with rules-driven engines, enable you to manage your accounting processes in a cost-effective and highly efficient manner. Analyze financial statements and track performance of your lines of business, profit centers, and locations today.

Learn why 20,000 users and counting across dozens of industries rely on Flexi’s accounting software. Contact Flexi today to learn more.

 

Category: Blog

Tags: ,

AI Automation Accounting

How AI & Automation Are Making Their Way to Accounting

Artificial intelligence (AI) and automation are making their way to accounting, just as they are permeating all other industries. AI is getting stronger and smarter as technology evolves, becoming not just an automator but also a smart technology that can learn and draw conclusions in real time.

As AI continues to advance, many fear it. While the perceived threat of job extinction looms, AI and automation can actually be extremely beneficial for accountants and finance professionals. By remaining adept and relevant in the industry, you are likely not to be replaced by robots anytime in the near future.

Working with AI and automation, not against it

Embracing advances in technology is key to remaining relevant in the industry.

AI and automation largely take the guesswork and possibility of manual error out of everyday processing. A large chunk of accounting tasks were at one time reliant on manual data entry, which meant manual mistakes. Automated, cloud-based software provides a level of security and data integrity previously unknown to accountants. These are all good things.

With increased accuracy and decreased time spent creating and running reports, accountants are left with time left in their day to devote to other, more strategic tasks. In fact an entire component of modern accounting relies on strategic and advisory services, and if your firm or organization has the time to devote to providing such services, you have an immediate edge over your competitors in the field.

While AI and automation reduces or eliminates many of the tasks historically known to the accounting role, AI and automation free up time for accountants to become subject matter experts on the various technologies and systems available today, providing a new level of value to clients.

Additionally, there are many elements in the financial industry that remain impermeable to AI and automation. A study cited by Business.com notes that 68 percent of clients surveyed prefer having access to a financial advisor over a technology offered as a replacement. This statistic makes it very clear that plenty of folks prefer the personal, human element when it comes to strategizing and problem solving. And fortunately, machines can’t replace that.

Flexi helps you embrace the future

Flexi provides software that automates many aspects of the accounting process, freeing up your time and making sure you can close the books and provide reports in a timely manner to boot. Flexi won’t replace you; Flexi will work with you.

Learn more about partnering with Flexi today. Call 800-353-9492.

Category: Blog

Tags: , ,

Cannabis Accounting

How CPAs are Entering the Fast Growing Cannabis Space

As the highly regulated cannabis industry grows, a call for strong, skilled, and experienced financial professionals is growing with it. But, many big accounting firms are still shying away from the industry as it presents unfamiliarity and risk. For the right professional, the cannabis space is booming with opportunity.

What’s complicated about cannabis

Compliance is of utmost importance for companies in the cannabis space due to differing state and federal legislation. This means that while artificial intelligence (AI) and automation are changing accounting jobs (and in some case, eliminating accounting jobs), jobs in niche industries like the cannabis industry are popping up.

Not long ago, legal cannabis products were relegated to medicinal use in a small handful of states. Legislature in recent years has opened up medicinal cannabis to a wide array of states, and recreational cannabis in a growing number of states as well. While cannabis is legal in multiple states, it is still federally recognized as an illegal and illicit substance. Therefore, remaining compliant is of critical importance to companies in the industry. A failure to comply with the various complex regulations can lead to hefty fines–or worse, shutdown.

As such, CPAs are in especially high demand in this fast-growing niche. By 2021, the U.S. cannabis market is projected to reach $70 billion. This could be a significant source of new revenue for accountants who have recently felt the threat of AI and automation changing the landscape of the accounting field and opportunities within it.

How to tap into the industry

CPAs interested in entering the cannabis space should focus on these three steps: education, networking, and building a strong and substantial team.

Educate yourself

There is much to learn about the various, complex regulations of the cannabis industry. Immerse yourself and commit to learning as much as you can about all facets of the cannabis industry, including farming, food, and retail. The AICPA website is an excellent resource.

Network with executives

Networking is arguably the most powerful method of building your business. In an age of social media, networking is easier than ever before. Join, follow, subscribe, and engage with Facebook, LinkedIn, and Twitter wherever and whenever cannabis and legal (and soon-to-be-legal) markets exist.

Build a team

You’ve educated yourself and networked–now you need to build a skilled team. Offer a complete package including bookkeeping, tax planning, and more. The demand is high in this industry–but so is the competition. Provide something truly different to prospects.

Flexi

No matter the industry you serve, Flexi can serve your accounting software needs. Learn more about partnering with Flexi today. Call 800-353-9492.

Category: Blog

Tags: , ,

accounting bots

Are Bots Infiltrating the Accounting Space?

Bots are a tool that makes it easy to engage with clients, leverage your brand, and quickly address client concerns at speeds and quantities that would be impossible for humans alone. Some bots–chatbots–communicate with users through an instant messaging platform, but bots can perform a number of functions, including robotic bookkeeping.

Bots are yet another example of automation. Just like all emerging technologies, there are both advantages and disadvantages of utilizing bots for your business needs.

The landscape

Some bots are replacing the apps that we use on our mobile devices. And there are good reasons for this: bots are cheaper, bots are faster, and bots can mimic the human touch better than apps can. Today’s bots can: take orders, provide information, provide personalized advice, provide real-time updates, and lead customers through purchases, among other functions.

Bots are also known for: buying concert seats, playing games and farming for resources in massively multiplayer online role-playing games (MMORPG), increasing YouTube views, and increasing traffic for analytics reporting. And bots are starting to make their way to the accounting space as well, by retrieving accounting data on request, providing robotic bookkeeping services, offering an automated receipt data entry tool, and more.

Know the pros and cons

There are many positives that come with the use of bots. At the core, bots bring automation to the table, and automation can speed up the rate of business while also reducing the cost of labor. Bots are exceptional at performing simple, repetitive tasks, which means your labor force can focus on other, more strategic tasks. And some bots, like search engine spiders, are inherently “good.”

With bots can come some challenges, though. The popular anti-bot CAPTCHA program can prevent bots from doing their job, for instance. And when human users interact with bots, aggravation can take place when their needs could better be addressed by human interaction.

But even worse, the technology often falls into the wrong hands. Spambots are prevalent and they harvest email addresses from contact forms, and even worse, such bots can lead to viruses, DDoS attacks, and other security risks.

Read the fine print

Bots can be extraordinarily useful in today’s business landscape. Accountants and finance professionals should embrace this technology–but be smart about it. One of the inherent risks of bots is that they will scrape valuable information. When entering into a business agreement with bot technology, be sure to read the user agreement. Information about how the bot might use data is often buried in the licensing agreement.

Flexi

Technology is ever changing, but there’s one name you can trust to keep your business on track. Learn more about Flexi today to see how Flexi can help your business succeed. Call 800-353-9492.

 

 

 

Category: Blog

Tags: ,

Compliant Insurance Accounting Software

5 Features You Should Seek For Secure, Compliant Accounting Software in the Insurance Industry

The insurance industry is a heavily regulated industry that requires assurance and compliance that only the best accounting software companies can provide. If you work in the insurance industry, you should be well-versed in the unique struggles you face–and you should seek insurance accounting software that helps you do your job better.

Here are five features you should seek and expect from your accounting software if you work within the highly regulated insurance industry:

  1. Additional automation. This will provide better security, more internal controls, and less risk of human error.
  2. Stronger reporting. This should include the ability to facilitate the creation of statutory reports.
  3. Flexibility. This should include the ability to quickly adapt to the ever-changing compliance requirements.
  4. Simplified, multi-book accounting. This enables users to track GAAP, statutory, and adjust simultaneously.
  5. Better security. This will provide more internal controls, less manual intervention, and stronger reporting for maintaining compliance requirements.

Flexi for your insurance company

Flexi understands the heavily regulated insurance industry and can guide you through the implementation process to ensure that the security, compliance, and performance mandates you need most are met.

When you choose Flexi as your accounting software provider, you gain the expertise of 25+ years serving insurance customers. Additionally, you gain the expertise of the government entities that rely on Flexi to efficiently manage claim processing needs associated with healthcare programs and disaster relief assistance.

With a seamless integration into policy, billing, and claims systems, Flexi creates superior efficiency and accuracy for insurance companies that cannot be replicated by ordinary accounting software. Feature highlights include:

  • Multi-company, multi-books (GAAP, STAT)
  • Premiums recognition
  • Workflow automation
  • Claim payments
  • Built-in compliance and audit
  • Powerful allocations
  • Global currency conversion
  • Reporting and analytics

Flexi’s comprehensive financial management software simplifies and automates the entire accounting workflow process, without compromising security. Flexi’s open architecture meets even the most stringent security requirements yet allows data to flow seamlessly with any system, whenever and wherever business needs dictate.

Flexi delivers all the rich features you’d expect in a top tier accounting solution, but without the high cost. With quick implementation that can be deployed on-premises, in the cloud or in a hybrid environment, Flexi will not only simplify your accounting processes today, but also will have you ready to adapt quickly to market or business changes in your future.

Learn more about Flexi today. Call 800-353-9492.

Category: Blog

Tags: , ,

Financially-Compliant

SOC 2 Compliance and Why it’s Important in the Financial Space

Service Organization Control (SOC) compliance has been a buzzword in the finance space since SOC reports were first introduced in 2011. There are currently three types of SOC reports: SOC 1, SOC 2, and SOC 3.

SOC 1 reports deal with financial transactions.

SOC 2 reports deal with technology and cloud computing entities, and will be our focus today.

SOC 3 reports are public documents that summarize SOC 2 reports without divulging protected information.

SOC 2 compliance

SOC Compliance

For cloud software companies, SOC 2 compliance is the most relevant of the three in 2018. The five criteria of such a report are: Security, Availability, Processing Integrity, Confidentiality, and Privacy.

  • Security
    This deals with protection against unauthorized access.
  • Availability
    This deals with accessibility of the system.
  • Processing Integrity
    This deals with whether or not the system meets its requirements (like delivering data according to set stipulations).
  • Confidentiality
    This deals with security and confidentiality of data transmission.
  • Privacy
    This deals with the system’s use and retention of personal information.

It is important to note that SOC 2 reports are unique; providers review requirements, make a determination on which of the requirements are relevant to their business, and then write the controls to satisfy those requirements. As such, an audit of an SOC 2 report is completely subjective. An audit provides an auditor’s opinion of how well the company is fitting the requirements. For this reason, the auditor’s reputation is extremely important to provide a sound and fair audit.

Why is SOC 2 so important?

SOC 2 compliance is so relevant in today’s market because the public is so interested in whether or not data providers can be trusted with confidential information. When a company receives a clean SOC 2 report, the company is trusted as a secure and compliant host.

For organizations that are looking to outsource finance information or data storage, being SOC 2 compliant is especially important. And as a consumer, if you seek a vendor who is unwilling to provide their SOC 2 reports, you may want to consider partnering with someone else. An unwillingness to provide this report to customers can be viewed as a red flag.

Flexi

Flexi is interested in helping your organization remain compliant to help propel your business forward. Learn more about joining forces with Flexi today to see how Flexi can help your business succeed. Call 800-353-9492.

Category: Blog

Tags: ,