Choosing A QuickBooks Hosting Provider – 8 Tips To Make The Right Choice

My Post.pngAmong the most prolific accounting software in the market, QuickBooks offers a variety of features, including invoice creation, payment processing, advanced reporting, and more. 

However, when installed on the local systems, QuickBooks’ functionality is restricted due to the limitations of the local IT infrastructure, such as lack of remote access, data security, and hardware flexibility.

A better alternative to host your QuickBooks is the cloud environment. Cloud offers you the level of mobility, flexibility, and scalability that local desktop just cannot. 

There is a plethora of QuickBooks hosting providers in the market that offer you their cloud infrastructure and services. However, the question is – which one is the right fit for your business? 

Here are some tips to help you choose the best QuickBooks hosting provider for your business.

1. Look for Intuit Authorization

Once you have decided to host your QuickBooks on the cloud, look for hosting providers that have partnered with Inuit under their hosting program. The hosting partners are authorized by Intuit to host QuickBooks after thorough screening. This will narrow your search considerably and save you a lot of time and effort. 

Moreover, the Intuit Authorized Commercial Host also offers genuine QuickBooks license along with the hosting services; you can buy the same if you do not have one.

2. See for Hosting Expertise and Experience

There are various options when it comes to cloud hosting service providers in the market. However, they offer cloud services to a variety of domains like website hosting, gaming, etc. These providers offer you a virtual server on the cloud as per demand but do not have custom solutions for accounting. 

You should look for a hosting provider that offers cloud accounting solutions. These providers offer solutions specifically for QuickBooks, and all the services are designed for it. Moreover, you should consider the experience of the provider in offering QuickBooks hosting services. The more experienced providers have pre-defined procedures for tackling issues. 

3. The Support Should Be Top-Notch

Customer Support is one of the parameters that draws a clear line between the good QuickBooks hosting providers and the not so good ones. You should look for a cloud provider that offers 24x7x365 support to the customers. 

Also, enquire if they offer more than one platform to contact them, i.e., phone, chat, email, etc. You can also check reviews on sites like Serchen to check their support history and resolution time. 

4. Do Not Compromise on Security

The security of financial data is imperative for the growth and sustenance of any organization. Hence, you would need your QuickBooks provider to leave no stones unturned as you have entrusted them to handle your data. 

Ask the provider about the security protocols the deploy to secure the business process. For instance, you can ask if the provider encrypts your data, offer access controls, offer protection against ransomware and DDoS attacks, etc. 

5. Go Through the SLA Carefully

SLA or Service Level Agreement is a document that contains all the terms and conditions of the hosting services. It also contains essential parameters like the minimum uptime value that the hosting provider guarantees for the QuickBooks hosting services.

SLA makes the hosting provider legally bound to deliver all the services as mentioned. It is recommended that you go through the SLA thoroughly to get a good idea of the provider.

6. Disaster Recovery is a Must

All the reliable QuickBooks hosting providers in the market offer a minimum uptime of 99.999 percent, which amounts to only 6 minutes of downtime in a year. This is possible only if the provider implements a disaster recovery plan as a part of their cloud services. 

Disaster recovery ensures that your entire accounting solution, along with QuickBooks, data, and other applications are replicated in servers that are situated in a different location. Hence, when the QuickBooks hosting provider’s data center is hit by a disaster, your access is transferred to the redundant server in another data center in real time.  

It is a necessity that the QuickBooks hosting provider you choose has a disaster recovery plan in place. 

7. Ask for Customization Options

Every business is different, so are its requirements. The renowned QuickBooks provider takes this factor into consideration while designing the perfect cloud accounting solution for your business. 

Hence, you should look for cloud providers that can offer a cloud solution tailor-made for your specific business requirements. Some providers also offer specialized services for every version of QuickBooks, be it Pro, Premier, or Enterprise.  

8. Check If Data Backup Is A Part of Cloud Services

Almost all QuickBooks providers offer backup solutions for the storage of business data. However, there are always some hidden or additional charges associated with it. You should see to it that the data backup is a part of your pricing package. 

You should also choose a provider with automated backup solutions so that all the data is backed up automatically without your intervention. Also, ask the provider about their retention policies and data restoration process.

Final Note

Moving your QuickBooks to the cloud will solve all the challenges you face with your local IT infrastructure. However, it is not the end of the story. Choosing the right QuickBooks hosting provider is equally important. A good QuickBooks provider will ensure that you unlock the full potential of the cloud and reap all the benefits that it offers. 

sharad-ace

Sharad Acharya is a technical writer at Ace Cloud Hosting. He loves to research the latest technologies and has written articles on the cloud, virtualization, and security. You can follow him on FacebookTwitterGoogle+, and LinkedIn.

 

 

Learn More About Ace Cloud Hosting

NOPAT: What it is and how to calculate it

My Post (23).pngNOPAT is Net Operating Profit After Tax. It shows a firm’s after-tax profits from day-to-day business operations. Analysts use the formula to compare business performance to past years, and to assess how a company is performing against its competitors.

This article uses an income statement to explain NOPAT, and to point out how the calculation differs from net income, EBIT, and other balances. You’ll learn how to calculate NOPAT, and how the formula can be used to make better decisions from financial reporting insights.

As an example throughout, meet Patty, the owner of Seaside Furniture, a manufacturing company. Here is Seaside’s 2019 income statement:

The income statement uses the term operating income, which also means operating profit. This discussion will use operating profit.
You’ll note that the operating profit formula ($200,000) differs from earnings before tax calculation ($184,000), and the reason for the difference helps to explain NOPAT.

What is NOPAT?

The NOPAT (Net Operating Profit After Tax) formula allows you to compare the profitability of two firms, assuming that neither business has any debt outstanding. This comparison is useful, because it focuses on profits from normal operations, without the impact of interest payments.

In 2019, Seaside had a $300,000, 6% loan outstanding, and paid interest expense on the loan. NOPAT removes non-operating income and expenses from earnings before tax. In 2019, Seaside had a $2,000 gain on sale of equipment, and $18,000 in interest expense, and both are in the non-operating category.

Non-operating activities

Non-operating activities are not generated from normal business operations. Seaside manufactures furniture, and selling a piece of equipment is not Seaside’s main business. Paying interest on a loan is also a non-operating activity.

As you see in the income statement, operating profit is calculated before the gain on sale and interest expense.

Comparing performance

Assume that Premier Furniture is a Seaside competitor, and also generated $1 million in revenue during 2019. However, Premier carried $500,000 in debt. You can compare the profitability of Seaside and Premier by using operating profit.

Let’s assume that Jill owns a $10 million furniture manufacturing business, and is considering a purchase of either Seaside or Premier. To assess profitability, an investor may use NOPAT to compare the two firms.

Operating profit reveals how each company generates a profit from normal business activities. Gains and losses on asset sales are unusual, and the level of debt may vary greatly over time. NOPAT excludes these variables from the formula.

The operating profit and net income balances are also different.

NOPAT vs. net income 

Net income includes all income and expenses, including taxes. Seaside’s net income includes the gain on equipment sale, interest expenses, and tax expenses. Operating profit does not include those three balances.

NOPAT vs. EBIT

EBIT refers to earnings before interest and taxes, and Seaside’s EBIT is slightly different than operating profit. Operating profit ($200,000) does not include the gain on equipment sale, interest expenses, and tax expenses. EBIT, however, would include the gain on sale, which would generate an EBIT balance of $202,000.

The NOPAT calculation includes the company’s tax rate.

How to calculate NOPAT

The NOPAT formula is (operating profit) X (1- tax rate). This calculation presents operating profit based on after-tax dollars.

Seaside’s 2019 calculation is ($200,000) X (1 -25% tax rate), or $150,000.

Is depreciation included in NOPAT?

Depreciation is included in the NOPAT calculation. Seaside posted $20,000 in depreciation, and the balance is included in total expenses. Note that depreciation is a non-cash expense. If Seaside pays $20,000 for a machine that is depreciated at a rate of $2,000 a year, the company does not write a check for the expense.

Some analysts prefer to use the NOPAT margin formula.

NOPAT margin

This margin is calculated as (NOPAT) / (Total revenue). The 2019 NOPAT margin for Seaside was ($150,000) / ($1,000,000), or 15%. The margin calculates the amount of profit earned on each dollar of sales. If a business can increase the margin, the firm is more profitable.

This formula is similar to profit margin, which is (net income) / (revenue). Seaside’s profit margin for 2019 was ($138,000) / ($1,000,00), or 13.8%. The profit margin ratio is lower, because net income includes more expenses than operating profit.

There are several reasons why NOPAT is a valuable tool for business decisions.

Why is NOPAT important?

NOPAT is a great indicator of how well a company uses assets to generate profits for core operations. Seaside can increase operating profit using these strategies:

  • Sale price: Increasing sale prices can increase profits.
  • Reduce costs: The firm’s $600,000 cost of goods sold balance, for example, includes material and labor costs. If Seaside can negotiate lower material costs or pay a lower hourly labor rate, profits will increase.
  • Gain efficiency: Businesses can work more efficiently by embracing technology. Accounting software can help a firm post accounting transactions and create invoices in far less time, which reduces costs.

The NOPAT formula removes the impact of debt, and the tax savings of carrying debt. The $18,000 interest expense reduces Seaside’s tax liability. If the company didn’t carry debt, the tax expenses would be higher. – Read more

Learn More About QuickBooks

Defining and implementing the accounting cycle for your business

My Post.pngManaging a small business is challenging. But if you can produce accurate accounting information, you can make better decisions and grow your business. When it comes to accounting, many business owners don’t know where to start. They need a roadmap that provides the steps required to create useful accounting data and financial statements. The accounting cycle is that roadmap.

What is the accounting cycle?

Accounting is the process of gathering information on business activity, posting transactions, and producing financial statements. The accounting cycle is a series of steps, completed in a specific order, that ends with a set of accurate financial statements. If you don’t follow each step in the cycle, you won’t produce accurate financial data.

Why is the accounting cycle important?

The accounting cycle can help you account for all financial transactions, protect assets from loss or theft, and report financial results to stakeholders. Small businesses often operate on narrow profit margins, and access to cash may be limited. These businesses have less room for error. Following the accounting cycle can help the business owner stay on track.

1. It protects your assets from theft

Assets are resources—vehicles, machinery, equipment—you use to generate sales and profits. Businesses must invest in asset purchases and maintenance. Without assets, businesses can’t operate. The accounting cycle protects assets from loss and theft. Imagine when a retail store purchases inventory, for example.

An accountant reviews the vendor’s invoice and the shipping receipt before increasing the inventory balance in the accounting records. Source documents support each accounting transaction, which reduces the risk of theft.

2. It helps you report financial results to stakeholders

Business owners may keep stakeholders informed for a variety of reasons. Stakeholders include employees, investors, creditors, regulators, and vendors. Investors want to know if the business is generating profits and that the business’s value is increasing. Creditors need to know if the company is generating enough cash to repay a loan. Vendors want to know if the business will continue to order goods and services and that the business can pay invoices on time.

The accounting cycle requires accountants to review the general ledger and the trial balance before using the information to create the financial statements. When a business owner can generate reliable financial statements, they can maintain good relationships with stakeholders.

How to implement each step in the accounting cycle

Every business should have a formal procedures manual that documents each step in the accounting cycle. The manual outlines each accounting task, how often the business must complete each task, and who is responsible for each task. Using a manual clarifies each process and reduces the risk of confusion.

Let’s look at an example. Outfield Sporting Goods follows the six steps in the accounting cycle.

1. Gather source documents

A source document is generated when an event happens in your business. Source documents include a receipt for a purchase or an invoice sent to a client.

On May 5, Outfield purchased $3,000 in leather materials to make baseball gloves. Their accountant reviewed the vendor’s invoice and the shipping receipt, which verifies that Outfield received the materials.

2. Determine the financial impact

Next, Outfield’s accountant must decide how the event impacts the accounting records. In this case, the inventory-material account increases by $3,000, and cash decreases by $3,000.

3. Post a journal entry

Outfield’s accountant records events the accounting records using journal entries. The journal entry includes the date, debit or credit, account number, account title, dollar amount, and a description of the transaction. The accountant enters this journal entry into the accounting system: – Read more

Learn More About Quickbooks