Accounting method rule changes favor small contractors.
An accounting method is a set of rules used to determine when and how income and expenses are reported. Recently, there have been developments that will help some contractors with their tax liability. However, before getting into this, it helps to clarify two methods: cash accounting and accrual accounting. What are they and how do they affect business?
Accounting is the language of business and every business owner should speak it. It is the way to keep score and the way to find out how strong and healthy a business is financially. The success of a business depends to some extent on one's understanding of financial terms and that understanding must include the ability to make financial business decisions from financial reports.