Cash or Accrual?

[donloa60]

I am a sole proprietor and do business by estimating how much material is needed for my commercial flooring contractor.  I do business as a sub contractor, and get paid every 2 weeks for work done in a specified pay period.  I work from home using a software program that helps me provide reports for each project I work on.

[Paul_W1]

Hi Donloa60,

The accounting method that you set up is ultimately up to you.  Based upon your information, it would sound like you doing the accrual method.  That means you are reporting it when you actual get paid.  Cash basis is reporting the income immediately.  Since you are projecting future, you want to make sure that you are not counting the income twice.  There are many great software programs to help you and you have indicated that you have a program you are working with.  Keep up that good work.