Long Island Financial Briefs April 11, 2003

Long Island Business News, Apr 11, 2003 by Ben Abelson

The CDS Cos., a Lynbrook-based financial services company targeting small businesses, has established a new strategic relationship with Intuit, the California-based software company that counts QuickBooks among its more popular lines of software.

CDS provides lending to small businesses based upon their receivables. They also manage the billing and bookkeeping work for small businesses.

Their deal with Intuit allows QuickBooks users to send CDS their receivables data electronically, allowing for faster access to a line of credit. The data would be sent through CDS' Myreceivables.com.

Leonard Leff, president and CEO of CDS, said that "by integrating into QuickBooks as seamlessly as we did," CDS' customers now have quicker access to "an almost unlimited credit line."

Leff noted that CDS' lending rates were "similar" to that of major credit card companies, adding that the deal with Intuit has already helped CDS find new customers among QuickBooks users.

Users of the program can find CDS listed through Intuit's Web site, in their catalog of business services, and through their tech support line.

"We are the only company with this type of product" aligned with Intuit, Leff noted.

In the past, QuickBooks users would have to mail or fax invoices to CDS, or file them electronically - albeit through a different program - at Myreceivables.com.

Since its inception in 1972, CDS has lent and managed over $1 billion to small businesses, the company said.

Sarbanes costs low ... for now

The initial costs of complying with 2002's Sarbanes-Oxley Act were only modest, according to the results of a new survey of senior executives at U.S. multinational companies.

Only three percent of the executives polled the latest PricewaterhouseCoopers Management Barometer survey said initial compliance was very costly, with only three percent calling it 'very costly,' and 29 percent calling it 'somewhat costly.'

Over the long term, however, these figures changed, with 71 percent of executives saying that costs will increase, and 59 percent executives expecting 'somewhat higher costs.'

"Long-term costs and certification risks are the law's twin lightning rods for executives," Robert Sturm, Long Island technology industry leader for Pricewaterhouse Coopers. "Nearly 90 percent are concerned about one or the other, and nearly half are concerned about both.

Almost 85 percent of large U.S. multinational companies have changed their control and compliance practices in response to the Sarbanes-Oxley Act, according to survey results.

It also revealed that only 31 percent of executives at those companies actually believe that the law alone will restore investor confidence.

Free CPEs

The Alcott Group, a Farmingdale-based professional employer organization, has announced that it will begin offering continuing education promotion seminars to area accounting firms.

The free, 2-credit CPE (continuing professional education) course - entitled "Current Trends in Co-Employment and How They Affect Your Client" - touts the advantages of PEO's and their potential benefits to accountants and their clients.

Professional employer organizations are companies that effectively provide the services of human resource departments to companies without their own internal HR departments. Traditionally, this means smaller businesses, which are plentiful on Long Island.

As expected, PEO would perform much of the bookkeeping and payroll duties of a small business. According to a spokeswoman for Alcott, this is one reason that accountants "love" them.

"It makes it all a lot more organized for them," she said, "so when tax season comes around, everything's already there."

Alcott only recently received approval from the State Department of Education, which governs licensing for the accounting industry, to offer the courses for CPE credit.

Lou Basso, president of Alcott, said the courses also "provide a fair education for an industry that's still rather young," and, in some circles, unknown.

Until recently there were no state regulations recognizing PEOs, Basso added, although last September Gov. George Pataki signed legislation that established a registration process for the companies.

New IRS Web page for GIs

A new section on the Internal Revenue Service's Web site is aimed at helping members of the U.S. Armed Forces serving in a combat zone get all their available tax benefits.

By clicking on "Armed Forces Tax Benefits" on the IRS' main page, soldiers and seamen can learn about the special tax provisions that apply to those in combat. These include extensions for filing tax returns and the exclusion of some military pay from taxes.

According to the site, 'active duty pay' earned while in a combat zone, and 'imminent danger/hostile fire pay' earned while hospitalized as a result of wounds, disease or injury incurred in the combat are all excluded from gross income.

Professionals working in a combat zone on a military project are also eligible for the deadline extensions.