Updated July 24, 2015
Accounting For Services Chicago Illinois
Doing accounting work for services is much different than doing most other types of accounting. The major differences are as follows:
- Accounts receivables – Many types of business do not offer credit to their customers. The next time you are at a grocery store ask them to bill you. If you do offer credit, depending on the whether you are on the cash or accrual basis, your accounts receivable may drive your sales.
- Inventory – If you are operating a service, you probably do not have an inventory to maintain.
- Machinery – If you are operating a service you probably don’t have equipment on a shop floor for the manufacture of a product.
- Depreciation – If you do not have major pieces of equipment, you probably have less to depreciate.
Please realize that there is a major difference between accounting and taxation. Normally businesses involved in a service spend large amounts of money courting new business. Business lunches and dinners, though necessary and reasonable for bringing in new business may not be deductible on most U.S. Income Tax Returns. Currently most meals that meet all of the requirements are only 50% deductible.
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Chris Amundson is the President of Accounting Solutions Ltd., a full service public accounting firm of Certified Public Accountants and Enrolled Agents handling the bookkeeping, accounting, tax preparation, and audit representation needs of Businesses, Estates, Trusts, and Upper Income Individuals