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How to bill paid in full seasonals

Discussion in 'Business Fundamentals' started by wenzelosllc, Oct 30, 2014.

  1. wenzelosllc

    wenzelosllc Senior Member
    Messages: 406

    I offer three billing options to my clients at the beginning of the year; per visit, monthly payment seasonal, and full up front seasonal. Many of them do the up front rate and send me a check along with the contract.

    I had been depositing their checks and leaving a credit on their account. Then I would create an invoice or statement charge on the 1st of the month for a fraction of their total bill (typically 1/6th, Nov-Apr).

    I felt this was the best as I could keep cash flow positive all winter and to make it easier to see what I have left as far as their seasonal balance, etc.

    So here's my question, how do you guys enter this in your accounting software? Is this the best way? The correct way? My biggest concern is on my taxes; have money in hand this year for services I bill next year. On the books its not income until I actually create a charge.

    Thanks for the input.
  2. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,394

    I would just your accountant. My Wife does it through quick books and her and our accountant set it up.
  3. allagashpm

    allagashpm Senior Member
    Messages: 797

    I would be concerned if you ever got audited that your bank shows deposits that dont line up with the same tax year on your books. I would check with your accountant as well
  4. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Money in hand ,means you pay the taxman. you could prepay your own loans if you have any to offset what you brought in.
  5. BC Handyman

    BC Handyman PlowSite.com Addict
    Messages: 1,943

    Yup, you got the money now, means you pay the taxman now. taxman dont care when you work, just when you get $ or even as soon as you send an invoice
  6. Citytow

    Citytow Senior Member
    from phila
    Messages: 548

    we break it in 6 month increments
    example $6000.00

    oct nov dec 2014 $3000.00 in taxed funds

    jan feb mar 2015 $3000.00 in taxed funds

    or whichever percentage helps this years tax bracket then the balance will go to 2015.