Reporting Business Income and Expenses – Which Accounting Method is Right for You?

While these considerations are very important, especially if you are new to business ownership, it’s also important you establish and follow clear accounting methods and periods to ensure you are accurately reporting all income and expenses for the tax year that’s just passed.

Whether you follow a calendar year, a fiscal year, or a short tax year, each taxpayer is required by the IRS to use a consistent accounting method (i.e. how your company’s transactions are recorded in your financial records), but how do you determine what’s right for your small business?