If you are a small business owner, you are always on a search to improve your bottom line. Forecasting and budgeting your expenses is one of the best ways to boost your revenue. With that, you can ensure your business is on track for both short- and long-term goals. Here are some of the best practices to incorporate into your business for effective budgeting and forecasting.

Create a Budget

Effective budgeting and forecasting need to start with a plan. You cannot make a solid business decision without a budget. Your business needs to create a budget and stick to it. This step can help your operations stay on track. With a budget, you have a road map to track the progress of the business. Once you have created a budget, please do not ignore it. A budget is there for a reason: to help manage your expenses and other costs.

Plan for Short- and Long-Term Business Expenses

If you want effective budgeting and bookkeeping, you must always plan for your business’s short- and long-term expenses. With this plan, you can ensure you have the necessary resources to meet your current and future financial needs. Take time to list all of your current expenses, including both variable and fixed ones. By doing that, you can see where the money is going for each month. After that, consider your long-term goals. Whether you have to make improvements or expand your business, you need to factor those long-term costs into your business plan.

Always Anticipate Changes

Unfortunately, income and expenses will not stay the same. If you want to ensure your finances stay on track, you always need to anticipate those changes. While it may seem like an impossible task, you will want to review your financial statements regularly with your accountant. With a quick meeting, you can see where all the money is heading and whether there are any potential problems on the horizon.

After that, you can always make adjustments to your budget. If you are spending more than expected, adjust the figures so that your budgeting remains accurate. Forecasting is not always exact, but you can use these best practices to prevent any problems that could harm the financial future of your business.

Forecast To Predict Trends

Forecasting can help with your financial planning and budgeting. Look at past trends and use them to predict future patterns. You can make more informed decisions about where to spend money. There are several ways to forecast your financial future. No matter the method you use, you need to collect accurate data. Also, it is crucial to revise and review your forecasts as new data becomes available. Forecasting can be an invaluable source to help you make better decisions for your business by continuously updating your budgeting and examining the current data.

Review Your Budget

As previously mentioned, your budget will change. You should not think of a budget as a stationary number. Schedule a time to review your budget with your bookkeeper or accountant. If you need to make adjustments to keep you on track, that does not mean there is a problem. All businesses review their budgets from time to time. Use your budget as a tool to track your income and expenses. You can make better decisions about allocating resources and managing your operations with a budget.

Seek Experienced Financial Help

Forecasting and budgeting are vital tools for both small and large businesses. When you have a clear picture of your finances, you will be able to make better decisions. However, many business owners do not know where to start and often struggle to manage their expenses.

In those cases, you may want to seek professional help for your bookkeeping and accounting duties. Many business owners struggle to keep up with books, budgets, and other financial responsibilities. While you may not want to spare the extra expense, think about these professional services as an investment in your business.

An experienced and qualified accountant can offer some guidance and expertise to help improve your bottom line. With their help, you can develop a budget that will work for your business needs, giving you more clarity to make significant financial decisions. You should never be afraid to ask for help, especially regarding your finances.

Effective Budgeting and Forecasting Benefits

An effective budget can help your business save money and keep track of any spending. Along with that, it can help forecast your future income and expenses, which might help if you need to tighten costs down the road.

Don’t forget about forecasting. This tool is vital for making informed decisions for expansions, investments, and other financial moves. When you have effective budgeting and forecasting, you can make the most of your existing resources and keep all those finances on track for your business.

Budgeting helps your business in the present, and forecasting is essential for those future plans. With these best practices, you can ensure that your data is accurate, helping to move the business in the right direction.

Reach Out To an Experienced Accounting Firm

At TMD Accounting, we have over 40 years of experience helping small and big businesses reach their financial goals in Gloucester County. We are here for your business if you need help with bookkeeping, taxes, payroll, or financial planning. We provide affordable, flexible, and reliable solutions for your accounting needs. Schedule a consultation by calling 856-228-2205.

Are you looking to become a more profitable and efficient business? Accounts receivable services may be able to help. Small business accounting services can streamline your billing process, ensuring that payments are received on time. Additionally, outsourcing these accounts receivable services allow you to focus on other parts of your business. Here is how accounts receivable services can help you have a more efficient business.

What Are Accounts Receivable?

Accounts receivable is the money a business has a right to receive because it provides services or goods on credit. In short, it is the money customers owe for services or products that have not been paid. For example, if your business sells a product on credit, a customer will have a certain period to pay you for the product. In many cases, the time frame is 30 days.

Your business must record the sale as an account receivable on the balance sheet. Once the company reviews the money, the account receivable would be removed from the balance sheet and replaced with cash. As you may tell, these accounts play a vital role in your bookkeeping since they represent future revenue. Accounts receivable will give your company insight into your overall cash flow and when you can expect timely payments from customers.

Generally, companies with higher amounts of accounts receivable could have more difficulty collecting payments from their customers than those businesses with fewer accounts. Customers who owe a large amount of money could default on their payments, meaning you could lose out on that income.

What Are Accounts Receivable Services?

You can track your customers’ payments and manage your cash flow with a professional accounts receivable service. These services handle many tasks, such as collections, invoicing, and customer service. An account receivable service will also allow you to gain insight into your customers’ behaviors. Also, accounts receivable services can optimize your billing and collection process, helping identify or correct trends. All these services can streamline the billing process, helping improve your bottom line.

Why You Need an AR Service

Using accounts receivable services will provide your business with the resources and tools to streamline invoicing, collections, and payment processes. There are plenty of benefits, and they include:

Reduce Administrative Costs

With an AR service, your business can save time and money by allowing them to handle all aspects of collections and invoicing, including sending payment reminders and following up with customers.

Improve Cash Flow

These AR services can help you get money faster into your account by using automated invoice processing that can optimize your cash flow.

Keep a Focus on Your Business

Managing accounts receivable can be time-consuming, especially if there is no dedicated person or staff to handle these responsibilities. Outsourcing your accounts receivable tasks allow you to free up time to operate your business. With that, you can help grow your company and generate more revenue.

Increase Insight Into Your Customer Base

These AR services will give insight into your customers’ behaviors, including payment trends and patterns. With this information, you can improve your business planning and customer relations. You can see these trends to understand your clients’ spending patterns so that you can tailor your services and products to their needs.

Choosing an Accounts Receivables Service

These professionals are here to help improve and manage your cash flow. Along with that, they can help you reduce the time you spend on administrative tasks. Most AR services will cover a few areas in accounting and bookkeeping, such as reporting, invoicing, collections, and customer services. An AR service can reduce administrative costs, improve cash flow, and increase efficiency.

There are several things to consider when it comes time to choose an accounts receivable provider. First, when it comes time to find an accountant for my small business, they should have the experience and reputation to handle most of these tasks. You need to choose a company that can meet your specific needs. Some accounts receivable services will be able to provide you with generalized services. However, others may only specialize in a particular area. Choose one that will work best for your business operations.

Accounts Receivable Services Offer Many Benefits

When you need to keep your company’s financial accounts up-to-date and accurate, consider choosing an accounts receivable service for your business. Without help, tracking invoices or transactions with customers can become difficult. Selecting a professional AR service provider is essential to pursuing a healthy financial future.

Accounts receivable management is essential to all businesses, but it doesn’t have to be a hassle. When you want to ensure timely customer payments, you need to consider outsourcing these services. With that, you can save time, money, and headaches. Think of these services as an investment in your business. Your AR team will take care of those critical tasks as you manage other aspects of the business. By partnering with a reputable accounts receivable company, all of your invoices will be paid on time and in full.

Looking for a South Jersey Accountant?

If you are ready to choose a professional AR team for your business, reach out to TMD Accounting. We have over 40 years of experience helping companies with their accounting needs in the Gloucester County area. We are a family-owned and -operated business. We pride ourselves on being an affordable, reliable, and flexible solution for your accounting needs. Our team wants to help your business grow. One way to do that is by outsourcing your accounts receivable services. Schedule a consultation by calling 856-228-2205.

Some restaurants might raise money with outside financing or by selling assets. However, the majority of the cash should come from its cash flow. Why is understanding cash flow necessary for your restaurant? Here are a few things to understand about these cash flow statements.

What Is Cash Flow?

This term is the amount of money you have made from food and beverage minus what you spent on operating costs. Understanding the restaurant’s cash flow can help budget for expenses and allow investors to see the potential in your business. If you want to calculate your restaurant’s cash flow, you can use the following formula:

Cash Inflow – Cash Outflow = Total Restaurant Cash Flow

However, there are a couple of things to take into consideration. You will need to know your inflow and outflow of cash. For the inflow, you need to add up all the money that comes into your restaurant during a specific period, including food and beverage sales. You can also include merchandise sales, received loans, catering and event money, and other items your restaurant has sold. That is known as your cash inflow.

Next, you need to determine your cash outflow. During this stage, you will want to add your operating costs for the same period. These expenses include utilities, inventory, rent, insurance, payroll, restaurant furniture, kitchen supplies, and appliances. Adding all of those expenses will give you the cash outflow.

With those two figures, you can calculate your total restaurant cash flow.

Reading the Restaurant Cash Flow Statement

There are three crucial statements for restaurants that help manage finances: the balance sheet, income statement, and cash flow statement. The restaurant’s cash flow statement will determine whether your company is financially healthy. These cash flow statements are broken into three categories:

• Cash flow from operating activities
• Cash flow from investing activities
• Cash flow from financing activities

However, the two most important aspects of the cash flow statement are financing cash and net income.

Financing cash will show that your restaurant has borrowed money or raised funds by selling stock. To an investor, your financing cash will show whether you have the money to pay dividends.

As you may have guessed, the amount of money the business produces is called the net income. This figure does not tell the whole story. Instead of relying on a single number, investors will look at the cash flows. If the restaurant’s cash flow is smaller than the net income, it could be a sign that the company is losing money.

Restaurant Cash Flow Management Tips

Now that you understand the basics of a restaurant’s cash flow statement, how can you properly manage your cash? First, you may want to work with our small business accounting services. We can provide advice to help manage those expenses and assets.

Aside from that, here are a couple of tips for your business.

Have a Restaurant Cash Flow Forecast

By analyzing your restaurant’s point of sales system, you can guess the amount of cash flow for the upcoming year. While sales can always change, you will have a little more insight into what you should be making for the forthcoming year. You can then decide whether to cut back on spending or invest more money into the business. A restaurant cash flow statement allows you to create seasonal budgets. With that, you can navigate those ups and downs in the industry.

Streamlining Your Costs

If you are unhappy with your restaurant’s cash flow, you might want to reduce overhead costs. Take time to talk to vendors and utility providers about whether you can lower your payments. You may want to remove low-profile or less popular items from the menu. Also, you could reassess your schedule and cut down on staffing hours.

Don’t Rely on Credit

When you have to pay back those debts, it can take a massive chunk out of your restaurant’s cash flow. Instead of relying on credit, you might want to talk to vendors about getting a discount when paying in full.

Get Those Books in Order

While bookkeeping is not a glamorous part of the job, you must stay on top of your books and accounting. A clearer picture can give you a more accurate look at your financial health. If you don’t want to handle this responsibility, consider hiring a professional to take on the bookkeeping and accounting tasks.

Diversify the Vendors

When you rely on one vendor, it may be convenient, but it can put you in a bad situation if something happens to their business. You can get the best deal and negotiate on those prices by working with multiple vendors. Plus, you will always have a fallback if a company goes out of business or runs out of an item.

Save for Emergencies

With a large cash flow, you might want to spend it on something big for the restaurant. However, take a portion of that money and set it aside for emergencies. If you are prepared for expenses, you will not scramble to take out a high-interest loan or pay on credit in an emergency.

A restaurant cash flow statement is vital to understanding the financial picture of your business. Without it, you will not know whether you’re making money or spending too much of it.

When you need an accountant for your small business, reach out to TMD Accounting. Our family-owned and -operated business has been serving the community of Gloucester County for over 40 years. We are a flexible and affordable way to keep track of your restaurant finances, including those cash flow statements. Schedule your consultation by calling 856-228-2205.

As a business owner, you want to keep an eye on your finances, including your expenses. When you process any transaction, it needs to be recorded in the books. For that reason, you need to know the difference between liabilities and assets. Here is a complete breakdown of these terms and what they mean for your small business.

The Difference Between Assets and Liabilities

Before you can know the differences, you need to understand these terms’ meanings. Liabilities are existing debts that a business owes to a vendor, organization, employee, lender, another business, or government agency. Many of these liabilities will help the business owner finance their company, such as a loan. On the other hand, assets are the resources or sums of value that a business owns. These assets can provide long-term benefits to the owner and also help to generate revenue.

You must list all liabilities and assets on a balance sheet, which is a vital financial document for any business.

What Is a Balance Sheet?

The balance sheet is one of the three fundamental financial statements for a business, along with a cash flow statement and income statement. The balance sheet lists the business’s total assets and how those assets are financed. Balance sheets could be called a statement of financial position or net worth.

The balance sheet will be divided into two sections. All the company’s assets remain on the left side. A list of the liabilities and equity stays on the right. The liabilities and assets are separated into two categories: current and noncurrent. Liquid accounts, such as cash and inventory, are considered part of the current category. Property, equipment, and long-term debt will end up in the noncurrent categories.

Liabilities Examples

Liabilities are either long- or short-term. As previously mentioned, short-term liabilities are current liabilities, and those long-term ones are considered noncurrent. Current liabilities often include credit card balances, accrued expenses, unpaid invoices, and payroll taxes. Noncurrent liabilities are leases, deferred tax payments, and mortgage loans. You must pay those short-term liabilities within one year of incurring the debt. Long-term liabilities are often paid over several years.

Examples of Assets

Similar to liabilities, businesses can also have noncurrent and current assets. A current asset is known as a short-term one, while noncurrent assets are long-term. Current assets include investments, accounts receivable, cash, and inventory. Those noncurrent assets include equipment, trademarks, and patents. All of these items provide continual, long-term value to the businesses. However, you cannot convert noncurrent assets into cash within a year. Additionally, these long-term assets tend to depreciate over a period of time.

Along with that, assets are intangible or tangible. Intangible assets are non-physical items you cannot convert to cash, including trademarks, business licenses, logos, and patents. Tangible assets are physical items that you can easily convert to cash. These assets include bonds, equipment, and inventory.

Assets, Liabilities, and Equity

Once you figure out what you owe compared to what you own, you will want to know how much value is left over. That term is known as equity. You can figure that out by totaling your assets and subtracting those liabilities. For small business owners, your equity is the business’s net worth. If you have a partnership or sole proprietorship, the equity is often called the “owners equity” on the balance sheet. In a corporation, this equity is referred to as “shareholders’ equity.”

No matter the name, equity is vital to your company’s relationship between liabilities and assets. On the balance sheet, the assets equal the total returns plus the total equity. There are several accounting equations to use to determine these figures, such as:

• Equity = Assets – Liabilities
• Assets = Liabilities + Equity
• Liabilities = Assets – Equity

With those equations, your small business accounting services can determine if the business finances through debt or uses its own funds to operate the company. However, these equations will only work for those who use the double-entry bookkeeping methods for their books.

Equity can affect both sides of these equations. If the business only has figures for equity and assets, it can easily calculate liabilities with no issues. Remember that bookkeeping and accounting can be tricky for any business owner. For that reason, hiring a professional to help calculate your assets, liabilities, and equity may be a good idea.

Do These Calculations Matter?

Liabilities, assets, and equity are essential for your business accounting system. With these numbers, you know how much you own, how much you have, and what is left over for your business. You will know where your money is at any given point in your business. These numbers ensure you do not make mistakes in recording those transactions.

Balancing liabilities, assets, and equity is the foundation of double-entry bookkeeping. Without knowing these calculations, you will not be able to understand your business’s finances. As a result, you could have a strong cash flow, but you may have an outstanding debt that eats away at your profits. With a better understanding of these terms, you can confidently know the financial health of your business.

At TMD Accounting, we help you track your assets, liabilities, and equity. Our experienced team can assist with your small business’s accounting, bookkeeping, and tax matters. We are a family-owned and -operated business that has been serving the Gloucester County area for over 40 years. You can count on us when you need an accountant for my small business. Schedule an appointment by calling 1-856-228-2205.

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.

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.