How to Find the Best Business Accountant for Your Small Business in South Jersey

Running your business is difficult enough without including managing your business’s finances and books. Financial management of your company can involve potential landmines. If you make a wrong choice, your business could lose money, face penalties, and deal with tax consequences. To make sure that you avoid accounting errors and ensure your books are accurate, you might consider hiring an accountant. Finding the right firm for your small business accounting needs will require you to know the steps to take. Here is some information to get you started from TMD Accounting.

Why Do I Need an Accountant for My Small Business?

If you’ve never worked with an accountant, you might not understand whether you need one for your business. There are multiple reasons why you should work with an accountant to help with your business’s finances. Some of the benefits an accountant can offer include the following:

  • Ensure the accuracy of your books
  • Assist your business with budgeting
  • Simplify tax filing
  • Provide strong device for business decisions
  • Answer your accounting questions
  • Ensure your bases are covered in the event of an audit

An accountant can ensure that your books are current and accurate. While accounting software can help with tracking day-to-day transactions, you should partner with an accountant to review your books on a regular basis.

Identify the Accounting Services You Need

Once you’ve decided that you should find an accountant, you will need to determine which accounting services you will need. Some of the types of services accountants offer include the following:

After you have determined which services your business needs from an accountant, you can move forward with searching for the best accounting firm to meet your needs by taking the following steps.

Ask for Referrals From Other Business Owners

A great way to narrow down your list of potential accountants is to ask others you trust for referrals. Ask your family, friends, and fellow business professionals for their recommendations of the accounting firms they trust. You can also ask your attorney or your banker for recommendations and ask members of your business network.

Once you have gathered several referrals, research the options by reading online reviews. Make sure the reviews you read are authentic by checking their consistency over time and the validity of the profiles that the reviews are attached to.

Research on Your Own

Whether or not you receive quality referrals, it is also a good idea to research on your own to find the best accountant. Try searching online, reading reviews, and looking at a business directory. When you read reviews, be sure and read both those that are positive and those that are negative. This can provide you with a picture of the experiences of others. If you identify accountants in a business directory, follow up by searching the firms online to read about others’ experiences. Once you have done your homework, you should have a list of a few prospective firms.

Interview Prospective Accountants

Once you have a list of a few accounting firms, schedule time with each one to interview them. This can help you see which accounting firm will be the right fit for your company. Prepare some questions to bring with you so that you know what to ask. Some of the types of questions you should consider include asking about their services, their fees and fee structures, any additional fees they charge for specific services, their communication methods, and the types of clients they typically do business with.
You should also ask about the accounting programs they use, their credentials, and their experience with businesses in your industry. You should ask more questions than you might think are necessary because doing so can help you identify red flags. For example, if an accountant overpromises, doesn’t have credentials, or seems to embellish their accomplishments, you might want to steer clear. Make sure to interview several accountants so that you can compare the pros and cons of each before you decide.

Choose Your Accounting Firm

Once you have interviewed potential accountants, you will need to make a decision about which one to hire. In addition to weighing the pros and cons of each one, make sure to consider whether you are compatible with the accountant you are considering. You will need to work closely with your accountant, so picking one you trust and believe you can do business with is important. After you decide on a firm, contact the accountant to get started.

Contact TMD Accounting

If you are searching for an accountant for your small business, it is important to take the necessary steps to research and interview several potential firms to ensure you find one that meets your business’s accounting needs. TMD Accounting has provided small business accounting services to many different businesses throughout New Jersey for 40 years and has extensive experience helping companies in a variety of different industries. To learn more about the services we can provide, contact us today to schedule a consultation by calling 1-856-228-2205.

Why Your Law Firm Needs a Specialized Accountant

Law firms have unique financial needs that must be addressed differently than how other types of businesses handle their finances. A law firm’s need for specialized accounting applies to both the firm’s business and accounting strategies and how they track and manage various types of accounts. Because of the requirements law firms have, they can benefit from working with accounting firms that offer small business accounting services to attorneys. TMD Accounting provides accounting services that focus on the unique accounting needs of law firms and can help your firm stay on track.

Help With Income Forecasting

Most law firms use billable hours to determine how much to charge clients. Many attorneys charge for their time in six- or 10-minute increments. Tracking billable hours can be a headache for many attorneys. To ensure that your firm is accurately determining its billing, we can help you transition to tools in the cloud to track your lawyers’ hours. Using the cloud can help you to accurately and efficiently track billable hours for every client while reducing or eliminating time losses. Many small- and mid-sized law firms contend with income fluctuations, which make managing your firm’s cash flow important to your success. Our accountants help law firms to manage accounts payable, create forecasts, and reduce the time involved with receiving payments for accounts receivable.

Optimizing Taxes

Employment agreements with attorneys can be structured by law firms in different ways. Some firms pay attorneys as independent contractors. Others hire lawyers as full-time, salaried employees. Some agreements might include profit-sharing or bonuses. What might work for your firm will depend on several factors. An accounting firm that specializes in providing services to law firms can help you choose the structure that works the best for your business.

In addition to your employment agreements, you also need to ensure that you have the right business structure. The business structure you choose for your law firm can affect the taxes you might pay. We can help you choose the structure that will provide you with the most tax advantages.

Tracking Trust Funds

Law firms must keep their clients’ funds in separate trust accounts and cannot commingle them with their other money. Many firms ask for retainers upfront before they begin work. Firms must follow strict rules when they hold client funds in a trust account for recordkeeping and client notification. It is critical for you to avoid commingling the funds with your firm’s money or using one client’s money to pay for services you provide to another client. If you mismanage your trust accounts, deposit funds in the wrong account, or fail to meet your recordkeeping and reporting requirements, you could face significant penalties, including the possible suspension of your law license. A specialized accountant can help to track client funds to ensure you avoid these types of mistakes.

Matter Cost Tracking

Law firms have both direct and indirect costs. You must correctly identify which costs are direct and indirect. The accounting for direct and indirect costs must be handled differently. Our accountants can help to identify which costs are direct or indirect and account for them properly.

How to Choose the Right Accounting Firm

Choosing the right accounting firm to handle your law firm’s accounting needs is important. Here are some tips to find the right legal accountant for your firm.

1. Ask About the Company’s Experience

While finding an experienced accountant is important, you want to find an accounting firm that has significant experience working with legal clients. Ask a prospective accounting firm about its experience working with law firms.

2. Ask About the Services Provided by the Firm

You will want to know about all of the services the accounting firm offers to law firms and their levels. For example, you will need to determine the degree of control you want to give the accounting firm over your bookkeeping. If you want comprehensive accounting services, you will want to look for a full-service firm. Some firms have bookkeepers to handle daily transactions. Others might charge more if you need to hire a certified public accountant to handle regular bookkeeping tasks.

3. Ask About Audit Support

It is a good idea for you to find an accounting firm that offers help in case your law firm is audited by the state or the Internal Revenue Service. The state licensing body can audit law firms to ensure they are accurately tracking and handling client funds, and the IRS audit can happen to anyone. Undergoing an audit can be stressful. If you have a trusted accountant’s help during an audit, it can greatly reduce your stress because you can feel confident in the accuracy of your financial data.

4. Ask About Fees

Accounting firms have different payment structures. Some charge flat fees for each task performed while others charge by the minute. You will want to understand your accountant’s fee structure so that you will know whether your accountant’s bill will increase each time you make a phone call or whether it will be calculated by task.

5. Ask for References

It is a good idea to ask other law firms about their experiences working with the accounting firm you are considering. Word-of-mouth referrals can help you determine which firms are known to provide good specialized services to law firms. You can also ask the firm you are considering to provide you with references from law firms that have used or currently use their services. Follow up with any references you are provided to ask about their experiences.

Talk to an Accountant for My Small Business

As an attorney, it is critical for you to carefully track your firm’s and your clients’ money. Working with an experienced accountant at TMD Accounting can help to ensure you meet your regulatory requirements and grow your practice. Contact us today for a consultation by calling 1-856-228-2205.

Cash vs. Accrual Basis of Accounting – What’s Best For Small Business?

Choosing the right accounting type for your small business can be a challenge. Cash and accrual accounting might seem similar, but choosing the wrong one can hurt your financial reports. When you know which one works for your purposes, you can keep all your books in order. Here are the differences between cash and accrual accounting.

What Is Cash Basis Accounting?

Before choosing the right accounting method, you need to know the basics. Let’s start with cash basis accounting. When you use these methods, you will record the income as it is received. All expenses are recorded when paid as well. With cash basis accounting, you only record the money when it enters or leaves the account. For example, if you have a restaurant that purchased supplies on credit for June but will not pay the bill until July, it is recorded as a July expense. With these accounting methods, you will not have any accounts payable or accounts receivable.

Since cash basis accounting is a simple way to track your financial records, many small businesses and sole proprietors use this method. If you make less than $25 million in annual sales with no direct-to-consumer merchandise, then cash basis accounting could be a good option. Cash basis accounting has a shorter learning curve than accrual accounting. There are a few items to record, making tracking your revenue and expenses more manageable.

Unfortunately, cash basis accounting does not provide you with the most accurate financial picture. You might think you have a high cash flow when it is just the result of your previous month’s work. Cash basis accounting does not conform to the GAAP standards. If you think your business will grow in the future, you might not want to choose this method.

What Is the Accrual Method?

With the accrual accounting methods, all expenses and incomes are recorded when earned and billed. This method abides by the generally accepted accounting principles (GAAP). With these methods, you will have a clearer picture of your finances. For example, if your business bills a client for $1,000 in March, you record that income for the month, even if the funds don’t reach your account until April. The same is done for expenses.

Some small businesses use accrual accounting as their primary method. However, if your company produces over $25 million in sales revenue during a three-year period, you must use the accrual method.

Many small business owners avoid accrual basis accounting because it is resource-intensive. There will be plenty of extra steps and paperwork associated with this method. You will need to have an adequate cash flow to ensure all bills are covered from month to month. Unfortunately, this method does not provide an accurate short-term view of your financial health.

Accrual Vs. Cash Basis: Which Is Better for Small Business?

Now that you know the basics of these accounting methods, it is time to choose the right one for your small business. If you have a small business that primarily takes cash transactions and does not have a large inventory of products, then the cash basis method might be the right choice for you. This method is a reliable, convenient, and easy way to track your expenses and revenue without knowing much about bookkeeping.

Accrual accounting is definitely the better option if you want an updated and accurate accounting of your company’s financial health. For the most part, accrual accounting can be a little intimidating. You can always hire small business accounting services to help with your finances. Here are some other factors to consider when choosing your accounting method.

Sales Revenue

You should take a look at your sales revenue. If you have more than $25 million in annual revenue, you must use the accrual methods according to GAAP. Many small businesses might not have hit that amount, but it could be a possibility in the future. Keep that in mind for your business.

Complexity of Your Business

Depending on the complexity of your books and industry, one accounting method might be the better choice. For example, you should avoid the cash-based accounting method if your business has multiple accounts, various LLCs, and hundreds of employees. With those methods, you will not be able to gather information about your financial picture from the balance sheets, cash flow statements, or income statements.

Public Company

According to the GAAP guidelines, if you have a public company or one that will go public in the future, you need to use the accrual basis. These types of businesses have to report an accurate view of their financial health to shareholders.

Final Word

Before choosing the right small business accounting method, you must thoroughly examine your company. While you can always switch the methods later, it can be a hassle and disrupt business. Many accounting tools and professional services help you accurately account for your financials. Whether you choose accrual or cash basis accounting, you always want to select the right option that will work for your business. Plus, you must make sure to stay compliant with those GAAP standards.

Do you need an accountant for my small business? Reach out to TMD Accounting. Whether you choose the cash basis or accrual accounting method, we will make sure you have an accurate record of your financial health. We have helped small businesses throughout Gloucester County for over 40 years. Schedule your consultation by calling 1-856-228-2205.

How to Change Accountants 

As a small business owner, you likely understand the importance of working with an accountant who understands your business and works to help you meet your goals. If your current accountant is not the right fit, you might wonder about how to go about switching to a new accounting firm. At TMD Accounting, we have provided small business accounting services to many companies over the past four decades. When we meet with new clients, many express they were frustrated with their former accountants because of poor communication. We always maintain strong communication with our clients to ensure they understand their finances and where they are at. Here is some information about steps you can take to change accountants with minimal disruption to your business’s operations.

1. Know Why You Want to Change Accountants

If you feel dissatisfied with your current accountant but are hesitant about switching, think about the reasons why you are considering a change. Business owners choose to change accountants for many reasons, including poor performance, lack of communication, or failure to provide good advice. Some businesses hesitate to change accountants because of fear. However, it doesn’t have to be difficult to switch to a new accounting firm. Small issues you are currently experiencing with your accountant can grow if you put off changing to a new firm. Understand why you want to switch and move forward with the process. You will likely feel relieved once you do so.

2. Find a New Accountant

Once you understand your reasons for wanting to change accountants, you will want to find a new firm before you end your relationship with your old one. Some of the characteristics you should look for in a new accounting firm include good communication skills, experience in your industry, the right credentials, excellent reviews, and the right types of services for your business.

A good accountant should allow you to contact them as often as you need without charging extra. Quality accountants understand that allowing their clients to ask questions means that they will not have to fix as many things later. Other firms charge clients by the minute for asking questions. Schedule a consultation with a prospective firm to help you determine whether the accountant is a good match for you.

You will also want to find an accountant who has experience working with companies in your industry. This helps you to ensure your regulatory compliance. Working with an accountant who understands your business and your industry also helps them to provide strong business advice.

The firm you choose should also have the right credentials. Look for a firm with accountants who are certified public accountants or enrolled agents. Ask the firm about the continuing education their accountants attend and what they do to remain current with changes in the tax laws.

Looking at reviews of a prospective accountant is also a good idea. However, make sure the reviews you read are authentic by checking whether they are provided by people with real profiles, are specific, and are posted over time instead of bulk reviews that suddenly appear all at once.

Finally, make sure the accounting firm you are considering offers all of the types of accounting services your business needs. If you are outsourcing multiple services, choosing a firm that offers all of them can help to simplify how many companies you have to regularly contact.

3. Notify Your Current Firm

It might be difficult for you to notify your current firm that you are moving on. While it might seem awkward, you still need to have the conversation. Your new accounting firm might assist with the process by helping you choose the service end date with your current firm, settling unpaid bills, and facilitating the exchange of records. Some businesses avoid this step because of its awkwardness, but you must notify your current firm of your planned move to ensure your records are transferred smoothly without any problems for your business.

4. Set Expectations With your New Firm

When you first start working with your new firm, you should make certain your accountant understands your reasons for switching to them and the expectations and goals you have for your business and your partnership. Establishing your goals and expectations at the outset can help to ensure that both you and your accountant will be able to focus on growth opportunities and stability for your company. You should expect to have meetings with your accountant to make sure that you are set up to succeed. Your accountant will want to understand your business completely to help you create a goal plan and establish best practices.

Find an Accountant for My Small Business

While realizing that you need to change accountants might feel intimidating, you should trust your instincts and move forward. Working with an accounting firm that is a better match for your business can make a world of difference in your business’s success and growth. It is not as difficult as you might think to change accounting firms. When you approach the process professionally, it can be fairly smooth. TMD Accounting provides a full menu of services for businesses in numerous industries and can help you determine whether we might be the right fit for you. To learn more about the benefits of switching from your current firm to us, contact us to schedule a consultation at (856) 228-2205.

How to Prepare Tax Records for Your Accountant

When it comes time to prepare your income tax returns, you need help from an accountant. Most business owners don’t have the time to file taxes or want to make a costly mistake. An accountant can sort through all those records, but they need a little help from you. You must bring the proper documents and forms to help your accountant during tax time. Here are some ways to prepare your tax records for your accountant.

What To Bring

Before you head over to your accountant, you need a few essential documents. First, you must bring identification information. These documents will prove your identity. You should bring your Social Security card and a photo ID. Along with that, take a copy of your most recent tax return.

In some cases, you might not qualify for the same write-offs or deductions as the previous year. However, these documents can help your accountant access certain information and calculate deductions. If you are working with a new accountant, your past tax return will allow them to discover any discrepancies between those previous tax returns.

Don’t forget about those wage statements. If you are an employee at a company, you should bring your employer’s W-2 wage and tax statement. Freelancers and independent contractors are considered non-employees. While they don’t receive the traditional W-2s, these workers often get a 1099-MISC from each client. You should send these forms to your accountant.

All dividend income from investment, unemployment, and Social Security income will need to be reported. You should have received a statement for those sources of revenue. Bring those documents to help your accountant.

Any real estate documents are essential. When it comes to real estate, there are many deductions. You should deliver all documents related to proof of paid mortgage, home equity loan interest, a recent home purchase, or paid personal property taxes to your accountant.

You want to get all those credits and deductions during tax time. Always have your proof of expenses. These documents include IRA contributions, invoices, medical bills, charitable contributions, self-employment expenses, mileage logs, and job hunting expenses. You would rather bring too much documentation to your accountant rather than miss critical pieces of information for tax time.

Common Business Records

There are plenty of tax documents you will want to bring for your accountant. First, you need all those financial statements for your business. These documents include balance sheets, cash flow records, and profit-loss reports. If you have employees, payroll information is another vital document for your accountant.

If you have any business expenses, take those records and hand them to your accountant. These expenses can include rent, utility, office supplies, telecommunication, internet, advertising, and travel costs. For those businesses that have vehicles, you will need to record all of the motor vehicle expenses, including driving logs and operating costs. You will need to keep track of asset additions and disposals involving machinery, buildings, and land.

Make the Process Easier for Your Accountant

When you use small business accounting services, you will want to make their job easier. In most cases, you pay the accountant by the hour. If they have to search for information, it could lead to frustration for all parties. Plus, it adds to your expenses. Here are a few ways you can help your accountant.

Speed Up the Process

With all of that information, documentation, and receipts on hand, your accountant will have an easier time with your tax returns. Remember that accountants are busy and work on several tax files during tax time. When you have all of your information, it can help them efficiently prepare and file your taxes.

Stay Organized

Whether you are a sole proprietor or operate a large company, you always need to stay organized. You should keep all receipts together. With the proper organization, your accountant does not have to spend time shifting through boxes of receipts. Those unsorted documents will increase your accountant’s time spent on your taxes.

Summarize Your Expenses

Consider providing your accountant with a summary of your records. All of your checks, business expenses, and invoices should be totaled and categorized. When everything is indexed, it will make your accountant’s job much easier for tax season.

Keep Personal and Business Expenses Separate

If you have several businesses, always separate each company’s revenue and expense documents. In addition to that, you never want to mix both your personal and business expenses together. Once again, if you do that, it will take time for your accountant to separate those expenses for your tax returns.

Don’t Wait Until Tax Time

When you work with an accountant, they can provide advice throughout the year. You do not have to wait to ask questions for the tax season. These professionals will be able to provide answers to your business questions. Plus, they can maximize your credit and deductions. In addition to that, they can analyze your financial health to plan for the future.

Come Prepared

Every year, filing tax returns can be complicated. Accountants know how to handle these tasks, but you can make their jobs easier by preparing the proper documentation. You can take the stress out of the season by staying organized when working with an accountant.

Final Thoughts

When you need an accountant for my small business, reach out to TMD Accounting. We have helped small and large companies for the past 40 years in Gloucester County. Our family-owned and -operated business can assist with your payroll, taxes, and bookkeeping services. Schedule your consultation by calling 1-856-228-2205.

Bookkeeping vs Accounting: Which is Right for Your Business?

Is there a difference between bookkeeping and accounting? If you have a small business, you know it can be challenging to keep an accurate record of your financial information. There are key differences in the roles that an accountant and a bookkeeper play for your business. You can better view your financial health, prepare for the future, and get a handle on those day-to-day finances with help from these professionals. Here is what you need to know about bookkeeping and accounting for your business.

Bookkeeping and Accounting Differences

Bookkeepers and accountants have different roles. While they have a common goal and similar tasks, these skill sets are used for various purposes. Take a look at these differences.

A bookkeeper will help to answer your day-to-day financial questions. These professionals can produce financial statements, such as a balance sheet. A bookkeeper will balance your ledger, record daily transactions, maintain expenditures and income records, and enter your credits and debits.

An accountant works a little differently. These professionals will analyze your business costs, provide macro-financial advice, and adjust the ledger entries. An accountant also prepares your taxes and helps you with in-depth budgeting. Plus, you can get assistance with strategic planning. Sometimes, you don’t have to find a separate bookkeeper or accountant. Some small business accounting services will handle all of these tasks for your company.

Maintaining Your Books

You should find a reliable bookkeeper if you need someone to manage the books. These individuals will maintain a ledger. Mostly, they use a software program to track those finances and ensure the books stay balanced. They record every transaction to an account for your expenses and income. You will want a reliable bookkeeper when you need a day-to-day picture of your financial health. When your books are maintained daily or weekly, you will never have to pay “catch up” when it comes time for taxes.

When it comes to your ledger, your accountant usually determines the accounting method, whether it is the cash basis or accrual method. The accountant will use these books to assess your business and help you make plans. All that information on the ledger will assist your accountant in preparing your tax documents.

Offering Business Advice

You can count on your accountant and bookkeeper to be key advisors for your business. When your bookkeeper works on your ledger, they can detect potential red flags if any issues arise. Since a bookkeeper has a more micro view of your books, they can help provide advice about budgeting and spending for the short term.

On the other hand, your accountant is an invaluable resource when it comes time to understand your larger financial picture. Every quarter, your accountant assesses your company’s financial statements to understand your profit, losses, and cash flow. Additionally, they can provide you with updates about the potential financial issues with your business. An accountant helps you understand how certain decisions will affect your financial goals.

Creating a Financial Strategy

When you have accurate records, you can see how your money flows on a short-term basis. With that information, you can decide where to take your business in the future. While the bookkeeper works hard to strengthen your company’s foundation, you need an accountant’s help with those future plans.

A skilled accountant will help you scale and plan for the future. They will analyze the books to see what works or needs to change. In most cases, they can help your business move into the next phase of your plans. Accountants can assist with other tasks, such as strategic tax planning, calculating growth, analyzing investments, and acquiring assets.

Bookkeeper vs. Accountant: Which Is the Right Choice for You?

If you want someone to handle the day-to-day finances of your business, choose an experienced bookkeeper. Accurate record-keeping is an essential aspect of your business. With help from a trusted bookkeeper, you can make that process more manageable and straightforward.

When you need to have a big picture outlook and assistance with strategic planning, an accountant can help. For example, if you want to acquire real estate, an accountant can incorporate your ideas and analyze your finances so that you can make the right choice for your business.

All businesses need to keep track of their expenses, transactions, and income. Do not think that you have to choose one professional over the other. These professionals can work together to give you a better overview of your short-term financial health and long-term financial goals. Some accounting services can handle all these responsibilities so that you can get the best of both worlds.

The Bottom Line

Every business owner needs to understand the financial side of their company. Bookkeepers and accountants can help make the process easier when it comes to your records. These professionals will work together to help with your finances.

You will want an experienced bookkeeper to set up your books and maintain them for your business. A skilled accountant understands your business beyond those day-to-day activities so that you can make smarter financial decisions. A bookkeeper and accountant can set up your business for success, allowing you more free time to focus on other matters.

Need an Accountant for My Small Business?

At TMD Accounting, we helped small businesses plan for the future and manage those day-to-day financial duties. We are a flexible, affordable, and reliable option in the area. Whether you need help with tax preparation or payroll, our team will assist your business. Schedule a consultation by calling 1-856-228-2205.