When it comes to accounting for law firms, one of the hardest accounting tasks to perform is correctly processing client trust accounts. Since a client trust account is a special bank account wherein law firms hold monies for clients to cover expense costs, it has to be separated from all other accounts of the law firm. As well, the funds have to be identified clearly. Every state has their own guidelines to govern the reporting and handling of a law firm’s trust funds. However, in any state attorney’s may not borrow or use trust fund monies to operate their law firm.
One of the obvious methods to account for and reconcile monies held within a trust account is to buy accounting software. QuickBooks is one of the most popular because it is not overly expensive. As well it can be used to manage the other accounting that law firms have to do such as daily transactions necessary to run the firm, including billing. However, an attorney using accounting software as a way to do their accounting for their trust account rather than hiring an experienced accounting firm must be diligent when it comes to using the software. They have to ensure that all financial transactions are properly recorded because there are serious consequences for mishandling trust fund monies. As well, they need to be careful with regard to who they hire to do their law firm’s bookkeeping.
One common issue related to accounting for law firms is the misuse of trust funds to pay for personal or business expenses, including payroll and taxes. Rather, fees that are earned should be taken from the trust fund monies and transferred to a separate law firm account, and then the money can be used to pay the attorney’s operating expenses, or be taken personally. Additionally, attorneys should never pay a client with respect to a settlement payment prior to the check clearing. If they do, the advance could end up coming out of funds held in trust for a different client.
The most important principle of accounting for law firms is the prohibition against commingling funds. This happens when an attorney combines their own monies with their client’s trust monies. Attorneys can never deposit their own money into their trust account, except when they have to pay their bank fees. As well, the prohibition against commingling requires that timely disbursements be made from an attorney’s trust account. This means that attorneys must withdraw their fees as quickly as possible after they are earned. They should never leave the funds sitting in the trust account. Law firm accounting also requires that settlement proceeds be paid to the client out of the trust account as soon as the check clears.
Highly experienced firms that deal with trust accounting for law firms are always your best bet. If you are an attorney and think there may be any type of problem with your trust account, make sure that you consult a professional. The last thing you want is to be is wrongly accused of commingling funds.
As an entrepreneur, your company is your livelihood. Every day, you work hard to make sure it runs successfully and that you are meeting your business targets. For this and many other reasons, you want to ensure your company’s finances are handled by a professional. Every year legislators twist and tweak tax laws, leaving the average business owner scratching their head when faced with financial decisions. Accounting firms stay abreast of the new tax laws, offer financial advice to businesses, and assist them with the development of budgets and other financial goals. Whether you need someone to handle weekly payroll or you just want reliable tax advice, a qualified accounting firm can help you handle your businesses finances with accuracy and ease.
So where do you begin when looking searching through the many accounting firms in your area? Here are some tips to help you hit the ground running:
Your circle: First and foremost, talk to family, friends or business peers to find out what accounting firm they use and if they would recommend them to others.
Your business: Most accounting firms specialize in a few business areas in order to offer clients better service. Consider the industry you are in and make sure you go with an accounting firm that understands your company’s needs and unique financial goals.
Fees: Billing varies greatly between accounting firms. Some charge a set rate for each financial task they perform, while others charge by the minute: raising your bill every time you call them. It is important to understand how they conduct their billing system before they start working for you, so you are not surprised with a massive invoice at the end of the month.
What you need: Think about the level of service you require before you start interviewing potential accounting firms. Some can offer detailed advice on how to keep financial records, while other accounting firms compile the necessary financial reports but offer little feedback. The amount of advice you need depends on your own financial knowledge and experience. Additionally, if you need complete bookkeeping services, look for a full-service accounting firm that employs bookkeepers. An accounting firm that does not employ bookkeepers will charge more if a Certified Public Accountant (CPA) handles routine bookkeeping tasks.
Availability: Do you require an accounting firm for tax-filing purposes or day-to-day business needs? Some accounting firms shut their doors in the spring and only re-open for the following tax season. If something comes up, you want to be able to rely on someone who can help … at any time of the year!
IRS support: When the Internal Revenue Service (IRS) calls, it is reassuring to know that your accounting firm will be right by your side. IRS audits are a way of life for some businesses, but facing an audit is undoubtedly a stressful situation. Some accounting firms offer their own offices for audit purposes and provide an accountant to represent your interests.
When taking your business from the United States and expanding it into the international arena, there are a number of things to consider. None of which are more important than the financial state of your company. Working with an international accounting professional can help resolve some of the issues associated with an international expansion of this nature.
One must test your financial model and the revenue targets to ensure that you can expand while simultaneously servicing your debt. An international accounting professional will work with you to include hypothetical parameters such as an interest rate hike, current deflation or difficult market conditions. Despite the fact that the world underwent a major financial crisis in 2008/09, many international businesses continued to achieve growth due to the establishment and implementation of realistic and effective financial models that had been stress tested.
With an international accounting professional, there are many different ways to raise the capital needed for global expansion. There are traditional means such as bank or intercompany loans however there are alternatives as well. It’s important to work hand-in-hand with your international accounting professional at your side to determine how much and from where.
Once you have secured financing, from there on out it becomes about managing finances amongst the United States and your target country. Test your assumptions by determining if you can achieve the desired debt to equity ratio recommended by your international accounting firm and any additional financial advisors you may be working with. Confirm that your treasury function is permitted under local and US law to ensure that the terms of your financial agreement doesn’t breach the transfer pricing rules or thin capitalization thresholds.
This is really the nuts and bolts of what it is to receive and maintain financing. Contact an international accounting professional that you trust to be able to set yourself up for expansion into emerging markets.
No longer does a multinational company need to be a corporate giant like General Electric or Wal-Mart. You don’t need billions in annual revenue, hundreds of employees, and multiple offices domestically to expand. Many small and mid-sized companies are venturing abroad and not necessarily for sales. We’re not talking about strictly selling your product internationally. International expansion could mean searching out a leading edge technology at a lower cost or to find labour for a lower wage than what is offered in advanced economies in North America and Europe. Anytime your business crosses a border, significant financial risk is posed but an international accounting professional can help.
What an international accounting professional can bring to the table is their expertise in being able to navigate financially through different markets. You want a partner when confronting new tax laws, repatriation of cash, intellectual property theft, currency fluctuations, labor law and regulatory issues, etc. In order to be able to succeed on a multinational level, an international accounting professional is mandatory. There’s too much at stake and far too much to lose if you’re not careful. You don’t want to be caught with an unexpected tax bill when you needed it the least. Errors like these shut down businesses and whether it’s temporary or permanent, a shutdown of any kind could result in you losing your part in the market.
Locate an international accounting professional today to begin setting yourself up for international expansion.
With the increased globalization we’re experiencing in the modern period, we find that more countries are coming into economic prominence than ever before and that more markets are opening up for American businesses to break into. For those business who seek international expansion or who are already in the process of selling their goods and services worldwide, an international accounting firm is what is needed to ensure that taxes are paid and that financial records are well-kept.
As the world comes into its’ own within the next few decades and multiple superpowers rise to create complete globalization, an international accounting firm will one day be a must-have for every business. Though that point is decades away, what an international accounting firm offers is simplification.
What happens if you make a purchase that requires payment in a foreign currency or that you sold a product for which you receive a foreign currency? This presents a multitude of different challenges that normally one would not experience working domestically. Worse yet, what is the exchange rate changes between the date you record an accounts payable and the date you actually make payment in foreign currency? It’s issues like these that an international accounting firm that resolve quite easily and keep your head out of this mess.
If you aim to open subsidiaries in foreign countries, an international accounting firm can assist with the likelihood of having to prepare your financial statements using the rules and currency of that foreign country.
There’s no need to go through these headaches. Leave it to the experts. The rules certainly change as borders are crossed and as you continue to expand internationally, an international accounting firm can complete foreign financial analysis, foreign audits, and can provide you with a consultant on the differences between preparing tax returns for a domestic parent company and preparing taxes for foreign subsidiaries. This is what worries many owners when they expand internationally because tax rates are different in different countries, tax rules are always changing, and tax planning can be extremely difficult in a landscape where you’re just beginning to learn what way’s up.
Small businesses may require an international accounting firm should they choose to outsource their manufacturing processes to a foreign country or to several foreign nations. They will no doubt be complications that arise from differentials in wage rates, the availability of resources, tax laws, and other factors. It’s the aforementioned simplification that an international accounting firm brings to the table.
Every internationally successful entrepreneur can tell you that it’s more who you surround yourself with than anything and the international allies you choose when undergoing expansion. When it comes to the financial department, leave it to the experts. Leave it to your experts. Through the efforts of an international accounting firm, you can delegate administrative conundrums like those mentioned above. Management of an international business is quite a bit different than a domestic one and it can become quite complex. This allows you to oversee the major business decisions that guide brand development, marketing, project management, and other aspects of your business that are integral to a permanent expansion out of the United States and to achieve prominence abroad.
Looking for an Accountant for your Business
No what matter what size of business you own, good accounting practices are crucial. A good accountant or accounting firm will not only make sure that your finances are in order, but will also make sure that your tax filings are accurate, complete, and fit into regulatory standards. A good accountant will also advise you on ways you can minimize the tax burden on your business, including items you can claim and the structure of your business. Whether you’re seeking accounting for small business or large, it’s important that you find a firm that works well with your specific business.
A good accounting firm needs to have a proven track record with businesses the same size as yours, and they should have an understanding of your industry, your business type, and your management structure. A good accountant knows your business inside out, and is able to leverage that knowledge to achieve significant tax savings to help you achieve financial growth. Not all accounting firms are created equal. Accounting is not a one size fits all industry, so it’s important that your accountant work well with your business.
Choosing an Accountant for your Business Size
One of the biggest considerations when choosing an accounting firm is the size of your business. Accounting small business services vary greatly from services for large business. There are a few reasons for this. Of course there is the matter of how much money your business brings in. A higher cash flow will result in a higher amount of taxes paid, and therefore extra caution is required. Business structure will also affect accounting procedures. Accounting for small business often means working with owner-managers, and that is a much different practice from accounting for a major corporation. Owner-managers often see a lot of overlap between their personal and business finances, so a small business accountant must be prepared for that.
Large businesses often tend to have more complex business structures as well, in order to protect assets and maximize cash flow, so a large business accountant must have a strong understanding of business structure options. Finally, a large business usually requires a large accounting firm to ensure they have the manpower to manage a larger account. Firms that specialize in accounting for small business might have the knowledge to work with a large firm, but they might not have the time required.
Is your Business Large, Medium, or Small?
Once you’ve decided to find an accountant for your business, it’s time to determine what size your business is. This might sound easy, but everyone has different ways of classifying small, medium, and large businesses. If you’re a little unsure of what size your business is, talk to prospective accounting firms. They’ll let you know how they classify business size you can choose the right firm. No matter what type of business you run, it’s important to find an accounting firm that works well with your business. Understanding the difference between accounting for small business and accounting for large business is the first step in finding the best accountant for your company.
A lot of work goes into running a small business – or any business – but the difference with a small business is the man power. In most cases, small businesses can’t afford the luxury of hiring a large staff to handle all the work which means that the majority of the work and responsibility falls to one or two people. Depending on the type of business you run, this may be just fine but the chances are you probably have a little more on your plate than you can handle. Whether the accounting for small business duties are piling up or you’ve fallen behind on supply orders, you have to do something to fix it.
Being a small business owner is a point of pride for most. It says you made it, and you made it there on your own steam and ambition. Sometimes this pride translates to inability to ask for help when it is really needed. This doesn’t mean applying for a loan, no. This means the most basic help, from getting your filing done to answering the phones, sometimes you just need help. Most of the time, however, hiring someone to help isn’t in the budget. Luckily, you don’t have to hire someone on full-time, in fact they don’t even need to be at work in some cases. This is that beautiful thing called outsourcing. You need some accounting for small business assistance? Great! Outsource it. You need a part time clerk or secretary? Perfect. Get an intern.
There are many ways to handle the challenges that come with owning a small business and the best part is, you don’t have to do it alone. While you tackle finding new sales paths, locking down clients and promoting your brand, the rest of the business is in good hands. Outsourcing accounting for small business tasks like payroll, taxes, bookkeeping and year end reporting, means you have more time to focus on building your business. If you can let go of the reigns in all the smaller areas, like administration, then you have more time and focus to put toward your success. The more successful you are, the more you can afford. One day you may be able to employ a full staff and take a holiday – who knows!
What’s important is that you choose an accounting firm you can trust to handle your business’s financial affairs correctly. Just because you are outsourcing doesn’t mean you don’t deserve excellent customer service and quick turnaround times. Accounting for small businesses can involve a lot of important documentation and you want it done right so that you don’t have to worry about it. Outsourcing your accounting will give you access to professional services and advice without paying someone a full-time salary.
If you have finally decided that you need to delegate some work to a third party so that you can focus on your business, consider outsourcing your accounting for small business tasks. It’s an important part of your business that undoubtedly eats up a great deal of your time. Why not leave it to a professional?
We only die once, which usually means that we only need to establish our estate once as well. However, when we only do something one time, we do not always get it right, and, in fact, we usually miss more than one thing. This is why we want to show you how to avoid the top 10 estate planning mistakes.
1. Procrastinating – Thinking you Have all the Time in the World
We don’t like to think that we are ever going to die, but the time eventually comes for everyone. This is why you should never procrastinate your estate planning. Even if you don’t think you have any finances to plan for, chances are you high that you have something you want to leave to a loved one.
2. Don’t Think of the Long-Term Wellbeing of loved ones
On that note, we would love to be able to leave our loved ones a lot of money so we know they are safe. However, this is not always the right thing to do. Sometimes a trust fund is the answer rather than a lump sum. It depends on the person and situation.
3. Don’t Take Everything Into Consideration
Sometimes we invest ourselves in one set estate planning approach, and do not think of the big picture. You need to consider all the what-ifs. There are three components to looking at the big picture and these are:
• People: This includes you, your spouse, children, grandchildren and other relatives.
• Property: This includes all your assets and wealth – personal property, real property, investments, money, potential inheritances, and retirement funds, as well as what you own now, and might own in the future.
• Process: This means how to develop your estate plan to ensure you optimize management initiatives, techniques and legal entities to achieve your long-term goals.
4. Not Planning for Divorce
With estate planning, we often don’t think that we might divorce our spouse, but sometimes it happens. This is where a contingency that places restrictions on money distribution outside the family is required; as well as other considerations.
5. Not Planning for Disability
An unexpected disability has a great impact on our personal and financial affairs. Therefore, deciding who will handle finances, childcare and healthcare decisions is important. It is never too early to plan for a potential long-term disability because it only takes a second for an accident to happen.
6. Don’t Keep Documents up to Date
Often the importance of updating documents is overlooked, but it is imperative to estate planning in Los Angeles or anywhere in the United States. This includes your will, title documents, and numerous other assets. Always make sure you have everything up to date.
7. Underestimating Trusts
Trusts are not only for minor children; they are a way to protect assets that involve the whole family—and these assets need protection from creditors.
8. Not Including Digital Assets
We live in a digital world where we make money online, and if you don’t have the password, you cannot get into digital accounts. This is why someone needs to have a list of all your online usernames and passwords; in particular, your PayPal account.
9. Not Thinking of tax Consequences
It is sometimes easy to forget about the big bite taxes takes out of estates. This also applies to life insurance policies. You should transfer life insurance policies to a life insurance trust.
10. Doing it Yourself (DIY) to Save Money
Although the DIY mentality is excellent for some things, it is not ideal when it comes to estate planning (https://en.wikipedia.org/wiki/Estate_planning). It may seem like perhaps you are saving money, but in actuality it is probably costing you money. Estate planning is one instance where you need an expert on your side.
Professional estate planners are experienced in not only managing estates, but dealing with estate planning issues as well. They know how to avoid the top 10 estate planning mistakes because they are involved with estate planning every day.
If you choose to do your own estate planning rather than hire top accounting firms, make sure that you avoid the mistakes discussed here. The last thing you want to do is miss something, or not complete the right paper work. The whole purpose of estate planning is to make sure your loved ones are cared for exactly how you want them to be.