Cash versus Accrual: Let Our Rochester CPA Assist in Your Choice

The qualified Rochester CPA we will assign to your business as an independent accountant possesses the appropriate education, training and work experience in the related fields of bookkeeping, accounting and auditing. As such, he will be able to provide his professional – read: educated and informed - opinions on various matters in this regard.

One of the most important aspects of his work is providing guidance on the best accounting method to use – cash versus accrual. All other aspects of bookkeeping, accounting and auditing as well as compliance with business laws will be affected or influenced by your final decision on it. Let’s take a closer look at the pros and cons of both accounting methods, which our Rochester accounting firm can be of valuable assistance.
Basics of the Methods

Keep in mind that the Rochester CPA assigned to your business has comprehensive knowledge of both types of accounting methods. Don’t hesitate to ask questions because the more you know about the methods, the more effective you will be able to use it in your business. Let’s start with the basics.

In cash accounting, cash outflow and cash inflows are recognized as recordable transactions as soon as the money changes hands (i.e., from your business to the supplier or from the customer to your business). As such, sales made without cash payments (accounts receivables) are not considered as income in the same way that expenses made without cash payments (accounts payable) are not recorded as expenses on the books of accounts.
In accrual accounting, the transaction including receipt of income and payment of expenses are counted regardless of whether cash and other assets actually exchanged hands. Income is recognized when sales are made and expenses are recorded when these are also made. Your assigned Rochester CPA will usually recommend this method for compliance with existing laws, rules and regulations on the United States including its tax laws.

Impact on Tax Planning

Your choice between cash and accrual method of accounting will affect your declaration of taxes. Keep in mind that you want to minimize your declared income and/or maximize your declared expenses in the year when your estimates point to the highest income. The result: You will pay lower taxes without being slapped with an IRS complaint.

Tips that the Rochester CPA may provide on this matter:

• For cash accounting - Ask your customers to pay their accounts during the year when you plant to take in the highest income. Pay your bills during the year when your estimates point to the highest income, thus, allowing for higher deductible expenses and lower taxes for the year.

• For accrual accounting - Send out the bills for your customers’ account receivables before the end of the present fiscal year or after the beginning of the succeeding fiscal year; decide the year when the income should be recorded. Ask the vendors to send you their bills for your accounts payable in the year when your financial plan demands the highest expenses.

Are you confused by now? Don’t be. That’s where you can turn to our Rochester CPA in particular or our Rochester accounting firm for professional assistance. for more inquiries please click here

Avoid Rookie Mistakes When Selecting CFO Outsourcing Services

The company you choose to handle your CFO outsourcing is going to impact your financial management system. Their goal will be to ensure that your company’s performance improves, while helping to better manage operations and funding. It is with this in mind that you should look to working with a Rochester consulting firm and ensure that they are going to be qualified to help guide you through this entire process. This may take some time, but in the end, it will help you to avoid serious rookie mistakes.

This begins by understanding that good companies will not require you to sign a long term contract with the CFO outsourcing company. While there may be documentation that you sign to utilize the services of this corporation, you shouldn’t be required to commit to a specific amount of time. After all, you may only need the services of the company a few times and a particular CFO might not meet your needs. In the event that you do choose to stick with an individual for a long term, ensure that they are able to commit the time and understand what you will be looking for in their services. That way it will remain mutually beneficial.

It will also be important that any CFO you consider shouldn’t be a part of your company. This individual should be part time at the most and paid through a 1099 form. This allows you to avoid payroll and having to include this individual on your company healthcare. While you are securing the individual that is being recommended, ensure that their standard fees will fit into your budget. Some companies will have an hourly rate for this individual, while others may allot you a maximum of so many hours with the CFO and they receive a flat payment, no matter how many hours are spent with your company.

Above all, the goal is to choose someone who can handle this role and the challenges that come with it. Typically, young adults and those with less than 15 years of experience in an industry don’t tend to be good choices. The reason is that they might not have faced many of the issues you are going through and it will be important that the person you take on is able to deliver fast, effective results. If specific concerns or issues are going to come up, let the Rochester consulting firm that will help you with your CFO outsourcing know in advance. This will reduce the risk of you taking on someone who might not meet your needs and it can help to build a level of mutual trust and understanding about what your needs are, while ensuring that they are being met.

How CFO Outsourcing Can Boost Your Business

In today’s economy, more of the smaller companies are now being faced with the same financial challenges that were once reserved for larger corporations. Sometimes this is the struggle of shutting down doors and unloading assets. In other cases, it is a sudden growth that that needs to be capitalized on. In both  scenarios, CFO outsourcing can be useful. When hired through a Rochester consulting firm, you will have access to an experienced individual who will remain dedicated to taking your business to that next level.

One of the most common reasons people turn to a Rochester consulting firm to handle their CFO outsourcing needs is money. While these companies need the experience of this viral roll, there isn’t often enough cash flow to justify the costs that come with filling a full time position. When outsourced, the company is only charged with the time that is spent helping them directly.

With the professional in place from the CFO outsourcing company, they will begin to go over the financial statements of your business. In many cases, this person will be a Rochester CPA who will look for incomplete or inaccurate data and then fix it quickly. The result will be that your financial information is up to date, while ensuring it meets the current accounting standards that are in place. With this information done, you can move on to the financial decisions that will impact your business.

As soon as the complete financial statement is available, banks and vendors can receive copies of these statements to determine if credit can be issued for you. Knowing that the records are accurate, you are getting a realistic picture of what is available to you. Some companies may also be willing to raise your limit, as they have more faith in your bookkeeping practices, knowing that a professional is handling them.

Another benefit that can occur when you utilize these professionals is that you can determine if any theft or fraud is taking place in your company. The unfortunate truth in a small business theft of a variety of things happens all the time. This includes lists of customers, cash, inventory and everything else. With the CFO going over your records and keeping track of things, you will be able to find a problem right away and this professional can help you to tackle the concern before it becomes a bigger issue.
  
You are going to find that there are some great Rochester consulting firms that will be able to help you take your business to the next level. Just make certain you keep these essential points in mind and do what you can to motivate you to take the next steps and begin working with a professional CFO for your company.

Your Accountant Can Do More than Taxes and Crunching Numbers

When most people walk into any Rochester accounting firm, they are only interested in having their books done. This can be just basic bookkeeping, or tracking assets for several companies. In some cases, the Rochester accountant may even be hired to do a simple audit for a company.

But there is so much more that this professional can do for you. You might not realize this, but beyond your basic finances and tax planning, this professional will be able to help you with more areas of your business.

Most professionals working in a Rochester accounting firm will have a great deal of knowledge and expertise in the world of business. Since the industry standard is a Master’s in Business Management Accounting, they are going to know more than just how to run the book. In fact, the time that they have spent in colleges learning this information usually gives them a good eye that can help you through some of the other situations your business is going through.

In fact, business plans and even a business succession plan can be handled by your Rochester accountant. They can even help you to go through the process of forming partnerships, trusts, estates and other legal elements that you might not be able to do on your own. Thanks to their understanding of business and tax law, you can have some peace of mind in knowing this is being done properly.

Even when your company is face is a bankruptcy, this team of professionals is going to be able to guide you through the steps, to ensure that your best interests are kept and that your company is left with options that could result in it eventually being saved. This comes from understanding and deciphering the details of the local and federal laws and knowing what your options are. While you could do this on your own, the accountant is going to end up being your best choice.

No matter what Rochester accounting firm you choose to handle your tax planning, audits or even business assistance, it will be important that you do ensure that they are certified to help you. An example would be a Rochester CPA, as they have the right knowledge and tools available to them, to help ensure that they are giving you the best guidance possible.

Remember, this is your business and your life that is going to be impacted. Make sure you take a moment to ensure that you are hiring the best. What you will find is that the area offers a variety of professionals who have different levels of experience you can choose from. It is important you choose the most qualified individual that you feel comfortable around as there is a good chance you will be seeing a lot of each other.