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Accrual or Cash
Posted by ppm on October 21, 2018 at 3:51 amHope this isn’t something that’s been asked already, or over discussed. I am just curious the percentage of land surveying companies that are on a cash basis or an accrual basis for taxes. Talking about a company with small number of employees (< 10).
bill68 replied 5 years, 5 months ago 14 Members · 18 Replies- 18 Replies
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. I can’t see any benefit to accrual.
Cash basis.
16 employees, cash basis for 30 years in business. ?
1 to 6 employees. 20 years. Cash.
Cash.
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… ? ?
I hope everyone has a great day; I know I will!- 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… ? ?
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.
Wunder whut Paden duz?
He’s probably on the accrual method: anything he accrues goes in his pocket. ?
ppm – what did your accountant and attorney say?
Cash for 20 years here. I could never figure out why I would want to pay taxes on money I have not yet received.
Cash for 20 years here. 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. 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. But I know one owner who runs a dozen or so crews who regrets having chosen accrual. (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.
If you like paying taxes on invoices that have not been paid go with accrual. My lousy accountant set my s-corp up as accrual in 1997 and I’ve had to deal with it ever since. I don’t believe the accrual method is appropriate for a small service business with little or no accounts payable.
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