Accrual or Cash

The books are run on accrual day to day, but the accountant backs it out to cash basis for tax purposes.

Cash basis for my solo operation.?ÿ I can't see any benefit to accrual.

Cash basis.

16 employees, cash basis for 30 years in business.?ÿ ??ÿ

1 to 6 employees. ?ÿ20 years. ?ÿCash.

Cash.

?ÿ

Wunder whut Paden duz?

When I win; I'm a gonna take the $904.9 Million cash payout. Instead of the $1.6 Billion over 20 years... ??ÿ ??ÿ

Posted by: RADAR

When I win; I'm a gonna take the $904.9 Million cash payout. Instead of the $1.6 Billion over 20 years... ??ÿ ??ÿ

I heard one guy say he was going to pay off his wife's credit cards, and if there was any money left over...

If I win I'm going to spend it on wine, women and song, and the rest I'm going to waste.

Thank you all. Sounds like Cash wins. I was pretty sure that was the answer I would get.

Posted by: holy cow

Cash.

?ÿ

Wunder whut Paden duz?

He's probably on the accrual method: anything he accrues goes in his pocket.?ÿ ??ÿ

ppm - what did your accountant and attorney say?

Cash for 20 years here.?ÿ I could never figure out why I would want to pay taxes on money I have not yet received.

Cash for 20 years here.?ÿ I could never figure out why I would want to pay taxes on money I have not yet received.

You should do what your accountant says,

but don't discount 'Modified Accrual'; sometimes called 'Modified Cash Basis Accounting'.

If you are thinking about going public, selling out to a big company (and would need GAAP or IFRS compatible books) then MCBA won't fly. But it really is kind of a best of both worlds.

If you don't have an accountant, then cash.

🙂

I don't know the difference which is why I am better off working for a construction company than running a business.

James

Posted by: John Putnam

Cash for 20 years here.?ÿ I could never figure out why I would want to pay taxes on money I have not yet received.

This is exactly why you should have an accountant!

As someone stated in a different thread, Surveyors are the world's worst businessmen...

I think the choice is heavily influenced by the size of your business.?ÿ But I know one owner who runs a dozen or so crews who regrets having chosen accrual.?ÿ (And yes, he has a full-time bookkeeper and an accounting consultant.)

For a solo operation I can't see any advantage to choosing accrual.?ÿ?ÿ

If you like paying taxes on invoices that have not been paid go with accrual.?ÿ My lousy?ÿ accountant set my s-corp up as accrual in 1997 and I've had to deal with it ever since.?ÿ I don't believe the accrual method is appropriate for a small service business with little or no accounts payable.