I’ve had 2 opposing opinions from 2 different accountants regarding whether cash or accrual income reporting is a best fit for my company.
Ones saying that due to having employees, acrual system needs to be used. Small trade business with a revenue of >$2m.
can anyone see why using a cash basis would be an issue?
Hi @Vibeydiva,
We generally advise you to seek professional tax advice on this which you already have.
The rule of thumb in these instances is that if you're paid upfront then cash is probably good option for you. If you're not paid upfront, then accrual is good way to go. The answer is usually the accounting method that fits best with the way you have your business set up.
I've found an article on the business government site called 'Choose between cash and accrual accounting'. This talks about the pro's and con's on both accounting methods. The decision is yours!
Hi @Vibeydiva,
We generally advise you to seek professional tax advice on this which you already have.
The rule of thumb in these instances is that if you're paid upfront then cash is probably good option for you. If you're not paid upfront, then accrual is good way to go. The answer is usually the accounting method that fits best with the way you have your business set up.
I've found an article on the business government site called 'Choose between cash and accrual accounting'. This talks about the pro's and con's on both accounting methods. The decision is yours!
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