Accounts Receivable: The Devil’s in the Details

For the most part, the biggest concerns we have with accounts receivable invoices are whether the invoices are getting sent out in a timely manner and are we receiving payment on them in a timely manner as well. Overall, these are the two items that matter most to our business. But there are some smaller details related to our accounts receivable billing that we need to pay attention to as well.

When a bill is sent out to a client, there will generally be some sort of description on the invoice. In some cases, it is very detailed and specific. In other cases, the description will be very general and lacking in detail. Another issue with billing descriptions comes when the description on the invoice does not accurately reflect the product that was sold.

Read More »

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.
Read More »

During and After the Sales and Use Tax Audit

Preparing for a Sales and Use Tax Audit: Part 4

In Part One of this series, we discussed the initial contact with the auditor. In Part Two we covered two of the main areas that the auditor will be expecting to find errors in tax filings. Part Three listed the documentation that you should expect to provide with your tax returns for the audit period. In this segment, we will discuss some of the other issues which may cause an auditor to add an invoice to his report.

• Read More »

Preparing for a Sales and Use Tax Audit: Part 3

In Part One of this series, we discussed the initial contact with the auditor in response to the notification of your upcoming audit. In Part Two we covered two of the main areas that the auditor will be expecting to find errors in tax filings, use tax payments on purchases and collections of adequate sales tax from your own sales. In this article we will discuss the documentation you should include with your sales tax returns for the audit period selected.

Read More »