Pricing
We’re thrilled to have you as a client. At VJ Tax & Accounting, we understand that every business is different. Our services are tailored to meet your business needs. We offer packages that meet everyone’s needs, Please read below to find the best fit for your situation. Flat monthly rates are based on the accounting basis and number of monthly transactions.
The key difference between accrual and cash-based accounting is the timing of when transactions are recorded. Accrual accounting focuses on recognizing revenue and expenses when they are earned or incurred, while cash-based accounting relies on actual cash inflows and outflows. The choice between these methods depends on factors like the size and complexity of the business, regulatory requirements, and the need for accurate financial reporting.
1. Simplicity: Cash basis accounting is simpler and easier to use for small businesses with straightforward cash flows.
2. Recognition of Revenue: Under cash-basis accounting, revenue is recognized only when cash is received. This means that you record revenue when you actually receive payment, not when you complete the sale or service.
3. Recognition of Expenses: Expenses are recognized when cash is paid. If you pay a bill in December, the expense is recorded in December, even if the goods or services were received earlier.
4. Limited Financial Insight: It may not provide an accurate picture of a business’s financial performance because it doesn’t account for transactions that have been promised but not yet paid or received.
5. Tax Implications: Some tax authorities allow smaller businesses to use cash basis accounting for tax reporting purposes, but larger businesses may be required to use the accrual method.
1. Complexity: Accrual accounting can be more complex because it requires tracking accounts receivable (unpaid invoices) and accounts payable (unpaid bills) to accurately reflect the financial position of a business.
2. Recognition of Revenue: Under accrual accounting, revenue is recognized when it is earned, regardless of when the cash is received. This means that if you provide a service or sell a product in December, you record the revenue in December, even if you haven’t been paid yet.
3. Recognition of Expenses: Expenses are recognized when they are incurred, regardless of when they are paid. For example, if you receive an invoice for services in December but pay it in January, you would record the expense in December when you received the service.
4. Accurate Matching: It provides a more accurate matching of revenue and expenses, making it easier to assess the profitability of a business over time.
5. GAAP Requirement: Generally Accepted Accounting Principles (GAAP) often require larger businesses and publicly traded companies to use the accrual basis of accounting.