Difference between Audits, Reviews, and Compilations

Owning a successful business is no child’s play. It takes a lot of effort and hard work. Hence, once you’ve established your company, you need to make sure that when you apply for a loan for the expansion of your business, your bank has enough evidence of your success so that they can finalize your loan without any hesitation. 

So, what is this evidence that your bank would require to determine if you qualify for the loan? Financial statements. 

In case you’re looking for stockholders, private investors, and creditors to invest in your company, then they too would require a record of your business’s financial position to assert whether your company is worth their investment or not. 

You can prepare your financial statements by yourself. However, hiring professionals might be a better option since they’re trained and can issue financial statements that accurately represent the economic position of your business with ease. 

At ThomasRoss Financial Group, we offer sublime accounting services New Jersey. Our accountants  are highly-qualified and have years of experience under their belts, which ensure that all the records they draft are error-free and a true representation of your business’s financial status.

There are three different types and levels of financial statements:

1. Audit

2. Review

3. Compilation

Depending on the type of financial statement drafted, the level of assurance may vary. 

1. Audit

Audit offers the most accurate representation of your business’s financial position. An auditor performs an analytical review and subjective testing to issue an audit. They can also verify a specific piece of information if they determine that it needs investigation. 

The process of drafting an audit requires interaction with third parties, evaluation of internal records, and examination of specifically chosen transactions. On the basis of the research performed, an auditor issues a report that mentions whether the financial statements are error-free and properly recorded or not. 

Here, we have jotted down some of the features offered through an audit: 

• It provides the highest level of assurance for stakeholders, investing companies, suppliers, employees, pressure groups, and customers.
• It enables easy, accurate, and on-time payment for goods and services tax, corporate tax, and other taxes.
• It follows the bank agreements. 

It enables the selling and buying of businesses with ease. 

Every public company needs to have an annual audit. However, we recommend that non-public establishments, such as non-profit organizations and other entities that receive finances from the government should also get an annual audit. 

2. Review

This financial statement is not as thorough as an audit but is more extensive than a compilation. A review is a record of the methodical processes used for the financial statements of a company. It also contains information about the queries made for your business’s management team. Further operations may be executed if the financial statements or information related to it seem questionable or inaccurate. 

A review doesn’t need procedures such as extensive studies, evaluation of your business’s internal controls, physical examination of your business’s possessions or confirmation of statistics with third parties. Instead, a review draft provides a limited assurance as it doesn’t contain the report of any material modifications for the financial statements in accordance with the Generally Accepted Accounting Principles. A reviewed financial statement should definitely contain all the important disclosures and footnotes. 

A business may ask for a review report of your business’s financial statements because it offers a neutral surface on which you can provide the data acquired by a CPA (Certified Public Accountant), without paying the hefty price of an audit report. This is advantageous for your business as well as the company interested in your business. 

3. Compilation

A compilation report offers the lowest level of assurance. This procedure is simple in the sense that it only includes the compilation of the financial statements of a business. The information provided in this report is purely the representation of the management of a company, which doesn’t offer any opinion or assurance for the statements. No investigation of the management or methodical procedures is required to issue a compilation. Rather, only the knowledge of accounting principles and basic perception of your company are utilized to draft this report. 

In addition to this, many times, banks need compilations in order to verify the status of your business’s financial position for loan approvals. 

All three financial statements have various purposes and different things to offer. Certain situations require specific types of financial reports. Hence, it’s important that you understand the differences between these statements in order to be able to choose the one that fits your circumstance the most, since all of these financial statements have unique weaknesses and strengths. 

If you need any further assistance or have a requirement for professional accountants, then please get in touch with us at ThomasRoss Financial Group. 

Business startup new jersey

The thought of being your own boss is always thrilling, isn’t it? However, in order to start a successful business, it’s important that you follow a good plan. We, at ThomasRoss Financial Group, offer our clients highly-skilled and experienced business analysts who create schemes that ensure the success of your startup. Our business startup services New Jersey allow individuals to fulfill their dreams of owning a company that thrives on the corporate world in little to no time.

New Jersey is a great place to start a new business, as recent statistics show that it’s the 3rd highest rated city for startup growth in the USA.

In this blog, we’ve broken down all the steps you need to follow in order to successfully start a business in New Jersey.

Step 1 — Decide on a Business Idea

This goes without saying, but you can’t start a business without an idea. This is your chance to be creative. However, coming up with a unique idea in a world where it seems like everything has already been invented, can be pretty hard. Hence, in order to stand out in the market, it’s essential that you work on your business idea extremely well.

Step 2 — Choose a Name for Your Business

This is another step that’s incredibly important and isn’t something that you should take lightly.

Your business name will have a huge role to play in attracting your clients. Decide on a name that works with the sort of business you plan to start.

In order to ensure that your business stands out among your competitors, you should choose a name that:

. Showcases the main aspect of your company

. Is easy to say

. Has a nice ring to it

. Is accessible for “.com” domain

Step 3 — Plan Your Business Module

Planning for a new business is incredibly important. Before you go ahead and invest your hard-earned money, make sure that you critically analyze your idea. It’s often seen that when individuals try to examine their business concept, they fail to observe it from a client’s point of view. This is why you need professionals like us to help you out.

Here are the following things that you need to plan before you enter the business world:

Product Development

I) Determine the main aspect of your business.

II) Plan what services you’d provide to your clients.

Advertising and Sales

I) Figure out the demographics of your potential clients.

II) Decide on ways you want to advertise your startup.

Staff and Employment

Determine the number and type of staff and employees you need to hire for your business.

Financial Strategies

I) Plan a budget for your startup.

II) Decide on a number you’re willing to invest.

III) Determine the salaries you’d pay your employees.

At ThomasRoss, we provide all our clients with excellent business startup services New Jersey. Our business and financial analysts guide you in every step of the way, ensuring that you have a solid plan before you begin venturing the business world.

Step 4 — Register Your Business

There are two benefits of registering your company as a Corporation or an LLC:

• Your business will have enhanced credibility, which means people will find it assuring to work with you.
• In case your business is sued, then you’ll be protected from personal liability.

For startups, registering as an LLC is an excellent move as they’re extremely easy to set up and administer. In addition to this, you’d be required to pay fewer taxes in comparison to other business entities.

You can successfully register your business as LLC in New Jersey for about $125.

Registering your business is important, otherwise, you’d be held accountable for the liabilities and debts for your business. Along with this, those who don’t register their businesses, may need to apply for a Trade Name, also called “DBA”.

Step 5 — File for Tax Registration

Almost every business requires an EIN (Employer Identification Number). It’s also known as the Tax ID Number. In order to recognize a business for federal tax filings, an EIN is needed. You can’t open business accounts or employ staff without an EIN.

There are some additional taxes that you need to register for when you’re starting a business in New Jersey:

• New Jersey Sales Tax

If you’re selling a physical product (pillows, toys, soaps, etc), then it’s essential that you register your business for sales tax in New Jersey.

• Employee Withholding Tax and Unemployment Tax

If you choose to employ a staff for your business, then on behalf of your staff, you need to register for Employee Withholding Tax and Unemployment Tax.

Step 6 — Open Business Accounts

For personal assets protection, opting for specific business credit and bank account is extremely important.

Your personal assets, such as your home, car and other valuables would be at risk, in case you have just one account for your business as well as personal use. If in future, your business faces a lawsuit, there could be a potential danger where you could lose your assets if you choose to not open a separate account for your business.

By following the tips below, you can ensure the protection of your business and personal assets:

• Open a business bank account

This will segregate your business’s assets from your personal assets, in turn, preventing your risk of losing your personal assets. In addition to this, opening a business account also makes tax filing and accounting easier.

• Get a business credit card

This will help you segregate your business and personal expenses. Along with this, getting a credit card for your business will also build your company’s credit history, which, in turn, can be used to raise capital on a later stage.

Setting up a startup in New Jersey isn’t a complicated procedure at the least. However, one must be extremely meticulous and calculative while planning the module for one’s business. If you need qualified experts who can help you plan for your startup, then feel free to reach out to us at ThomasRoss Financial Group.

Business valuation service New Jersey is a practice and a set of tasks that determine the monetary and market value of a company or a business. Valuation of a business is done for multiple reasons such as your need to sell your company due to retirement, divorce, health, reduced cash flow, etc. In all these cases, you need to provide the value of your business. Are you looking for business valuation services New Jersey? ThomasRoss Financial Group is here at your service! We also provide brilliant business start-up services New Jersey.     

What are the Primary Business Valuation Methods? 

The business valuation of a company or a business, when performed as a going concern, is mainly approached via the following methods:

•   Relative Valuation – Market Approach
•   Intrinsic Valuation – Discounted Cash Flow Approach     

Market Approach 

The market approach is a type of relative valuation, which is often used for the process of business valuation. It comprises of Comparable Analysis and Precedent Transactions. 

Discontinued Cash Flow Approach 

Discounted cash flow approach is a type of intrinsic valuation, which is an extremely elaborate and in-depth approach to the business valuation process. 

If you’re an owner of a startup, then reach out to us at ThomasRoss Financial Group for business start-up services New Jersey. You can also avail our services for Business Valuation Services New Jersey so that you’re aware of the worth of your business at all times. 

The Three Main Methods of Business Valuation 

1. Comparable Analysis 

This is a relative valuation method in which we evaluate the present worth of a company by comparing them to other similar companies. We look at trading multiples like P/E, EV/EBITDA, and/or other ratios. This method is a very common business valuation approach as it presents the current value and can be calculated rather easily. 

2. Precedent Transactions 

This is another relative valuation method in which we evaluate a comparison between a company and other recently sold companies of the same industry. These transaction values are essential for mergers and acquisitions transactions. However, this method is not used as often as comparable analysis, since the data can very quickly lose its value, as with time it may not continue to prevail as the current market value.  

This is why we suggest you avail our business valuation services New Jersey so that you can  always remain up-to-date with the current market value of your company. At ThomasRoss Financial Group, you can also opt for excellent business start-up services New Jersey. 

3. Discounted Cash Flow Analysis

This is a type of intrinsic valuation method in which we forecast a company’s unlevered cash flow and discount it back to today’s value. It requires the most substantial amount of assumption, analysis, and detail. The method often produces a result that is the most accurate valuation of a business. 

Business valuation is of utmost importance and shouldn’t be neglected or done by the owner himself, as the results may end up being biased in nature. Contact us to avail a team of professionals who will evaluate the accurate value of your company with total ease and at affordable prices! 

Mergers & Acquisitions (M&A) are described as the process of combining two companies for their economic betterment. This process involves business evaluation and is one of the most important aspects of the financial world. We, at ThomasRoss Financial Group, provide business valuation services New Jersey for different procedures like bank financing, mergers & acquisitions, and restructuring & insolvency. 

Why Opt for Our Business Valuation Services New Jersey? 

In terms of mergers and acquisitions, business valuation is incredibly important. When two companies decide to combine their operations together, they need to be able to provide an accurate representation of their business’s economic worth and current market value. Without the valuation, companies will not be able to decide the final market costs of consolidation. 

What is Mergers & Acquisitions? 

Mergers take place when two businesses of about the same size join their operations in order to form a larger company. This happens when both the businesses are in agreement that merging the companies would create a significant surge of sales and in turn, help them attain a higher market value. When two companies merge together, they essentially become equal partners and work together with a mutual understanding. 

Acquisitions take place typically between a larger company and a relatively smaller one. The larger company usually takes over the smaller company by buying a portion of the smaller company. In addition to this, the acquirer may absorb the company by buying their certain assets. 

How Do Mergers & Acquisitions Occur? 

• They occur by exchanging the shares for assets
• They occur by purchasing assets
• They occur by exchanging the shares of shares
• They occur by purchasing common shares 

What are the Different Types of Mergers & Acquisitions? 

Mergers & Acquisitions can take different forms, based on different aspects. 

The two main forms are:

• Merger through absorption
• Merger through consolidation 

The Three Types from the Economic Aspect: 

• Horizontal merger

       This occurs when both companies are in the same industry. 

• Vertical merger

       This occurs when both the companies are at different value chain or production stages.

• Conglomerate merger 

This occurs when both companies belong to two different industries. 

There are several things one must take into account after one establishes a business, and reconciliation of the business’s bank account is one of the most crucial things. Through reconciliation, you can compare the financial records provided by the bank with the internal financial records of your company. In order to identify any unusual transactions such as frauds or accounting errors, make sure you reconcile your account on a monthly basis. This can also help you with detecting inefficiencies in the finances of your company. We, at ThomasRoss Financial Group, offer accounting services New Jersey. Here we will discuss how bank reconciliation works and the different benefits a company can reap from them.  

How Bank Reconciliation Works?

In order to reconcile your accounts, start by comparing your monthly bank statements to the internal records of balances and transactions of your company. Check each transaction separately, making sure the amounts are consistent with one another. Also, make a note of any difference that you notice and get them investigated immediately. The process of bank reconciliation can seem a bit daunting, and not something all business owners can indulge in all by themselves, hence, you need professional business consultants to help you out. We have a team of professionals who offer accounting Services in New Jersey, and by availing their services, you’re bound to stay stress-free. 

What are the Benefits of Reconciling a Business Account? 

There are several benefits of bank reconciliation. Here, we have mentioned the important ones for you: 

• Fraud Detection 

Since reconciliations of bank accounts involve the act of comparing the cleared checks with the disbursed ones on the company’s bank financial statement, a careful review based on the proper controls and processes helps to showcase the fraudulent activities. With our accounting services in New Jersey, you can be sure that we will catch all traces of fraudulent activities on your account. 

• Overdraft Prevention 

The process of cash outflows to vendors and employees and the incoming payments from clients and customers require different amounts of time. The time required can be more if the company is working on very low cash reserves. This is where bank reconciliations can help. It will allow you to manage postpone payments that may cause company overdrafts. You will be able to handle other issues such as bounced checks, insufficient fund interests, and fees. 

• Recognizes Bank Errors

Accounting errors can be made by bank employees quite often, but they may go unnoticed by you. That is why you need a team of professionals to help you with the reconciliation process for your account. With our accounting services in New Jersey, there will be no scope of overlooking any such mistakes. 

Bank reconciliation of your account allows your company to notify the bank of its fault on time. From there, the bank may do their research and correct the errors on your account.

It is important to assess your bank account at least once a month to keep a track of all the activities taking place. However, the process itself can be extremely time-consuming. Hence, hiring professionals to manage the reconciliation of your bank account is going to be your best bet. Reach out to us if you’re looking for accounting services New Jersey.