Are there any accountants out there that would like to convince me that accrual accounting is better for a small business than cash accounting?
I'm talking about having a discussion, not an argument. An exchange of ideas and open minds. We can have a civil chat and explain to each other why we think our idea is better.
I believe that cash accounting is the only way to go for small businesses unless accrual accounting is required for a bank loan.
How small a business?
Let's start at the $25,000,000 mark. That the IRS limit established in 2018 before you need to do accrual accounting for tax purposes.
I am guessing that there are a few accountants out there that disagree with this position!
Are you interested in having the conversation?
Please let me know in the comments!
#accounting #wtcfg #bookkeeping
I was working with a client recently. She is really sharp - she understands everything that I throw at her and always asks great questions.
In her case, she was anticipating a negative bank balance six weeks ahead. She hired me to help her organize expenses around this particular week, and to specifically find expenses that we could move around to avoid a negative balance.
We went from top to bottom on her list of expenses, which ranged from about $100 to $50,000. We tried to move some to a date after the week with the negative balance.
I realized that what we were doing was like moving chess pieces on a chessboard. Moving a large bill was like moving a king or queen; it could change the strategy of the game.
Moving a pawn - a small bill from $100 to $500 - would not make a huge difference, but if you move enough pawns they add up and can even win the cash flow game for you.
Are you interested in learning how to play chess with your cash?
If you are, check out my course Winning...
Sales growth at all costs? Most of the clients that I work with have great sales, are growing revenue, or could grow revenue if they had additional cash to fund the growth. At the same time, every one of my clients is struggling to manage their cash.
After doing the basics of getting their cash management systems in place I almost always recommend that they fire some of their clients.
Yes, fire clients.
These clients are killing the company’s cash flow and slowing or eliminating the company’s ability to grow.
Which Clients Are Hurting Your Company?
There are two types of clients that hurt your company:
Client’s that hurt your profits and cashflow
Clients that hurt your productivity and moral