The first decision you must make is the type of accounting method that is right for your business. Accounting methods determine how and when you record your revenue and expenses. The two main types of accounting methods are cash accounting and accrual accounting. Cash accounting is recommended for small businesses. It requires that you record the transactions when you have actually made or received the payments.

Accrual accounting is usually the choice for large entities. With this accounting method, you record each transaction as it occurs, whether or not you have actually made or received the payments. You may choose to use a mix of the two accounting methods. For example, you may use accrual accounting to record revenue and cash accounting when recording bill payments. You must choose one of these accounting types the first time you file a tax return.

We help you choose between the accounting method depending upon your business structure, size of your company and volume of transactions your company is undertaking.