Accounting for Insurance Premiums

If you’re lucky, you have all your insurance policies with the same company and they all renew on the same date, but for many businesses this is not the case. You may have your worker’s compensation coverage with one insurance carrier and your general liability with another. They may also have different renewal dates and different payment plans. Trying to keep track of what you’ve paid, and what your true monthly insurance expenses are, can be difficult.
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Tags: Accounting System, Accrual Accounting, Annual Insurance, Asset Account, Compensation Coverage, Debit Side, General Liability Insurance, Insurance Accounting, Insurance Carrier, Insurance Costs, Insurance Expense, Insurance Expenses, Insurance Policies, Insurance Premium, Insurance Premiums, Insurance Year, Payroll Systems, Prepaid Insurance, Previous Year, Renewal Dates

Sales Tax (Again): Cash vs. Accrual

Since we just finished up our series on Sales and Use Tax Audits, I thought we might as well hit one more item that relates to sales tax:  the effect of cash versus accrual accounting methods on your sales tax filings.

Just as a refresher, when your accounting is done on an accrual basis, revenue is recognized when the billing goes out to the client. On a cash basis, revenue is recognized when the client actually pays the bill, and you have deposited the funds. The same is true on the payables end. In an accrual system, expenses are recognized when your vendors bill you. In a cash system, the expenses are recognized on the books until you actually pay those bills.
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Tags: Accounting Methods, Accrual Accounting, Accrual Basis, Cash Basis, Cash Vs Accrual, Company B, Payables, Sales And Use Tax, Sales And Use Tax Audits, Sales Tax, Sales Tax Rate, State Tax, Tax Filings, Tax Period, Tax Return, Wit

But HOW do You Make Sure Timing is Correct?

Last week we talked about timing and making sure that certain costs were entered when they are relevant. This is a very difficult territory for some and confusing for others.

I am going to try to make it simple (and I hope I’m able to do so!)
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Tags: Abc Inc, Accrual Accounting, Books, Business Income, Business Operations, Cash Basis Accounting, Graphic Designer, Invoice, Irs, January February March, Memory, Money, Pay Taxes, Small Businesses