When Starting A New Business - Part 3


        Now that ideas have taken shape, preparations are being made. These will set the stage for how the business will function in a practical way moving forward. A critical decision that must be made at this point is what accounting method will be used. Once the choice about how to report income and expenses is made, it must be used consistently. This is a serious decision and must be well researched.
       Cash. Using this method, income would be reported and expenses deducted, in the year they are received or paid. This is not to be confused with the Accrual method. Here, a business would report income or expenses in the year they earn them, even if they are paid in a different year. A Qualified Tax Professional is essential at this point to help set up the framework of what can become a solid and successful business.

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