How do you pay your taxes? Cash or Accrual?

This is our first year in sage, so as we are looking towards tax season we are curious how all of you pay your taxes.    We have traditionally used Cash basis so now feel a little lost not seeing a cash income statement.  So if you pay your taxes in Cash using Sage 100 Contractor, how do you know your numbers?  Do you have your accountant figure them, do you have a specific report you use?   Is the Statement of Cash Flows like a cash report?   

If you pay in accrual.  Did you switch from Cash?  How was the process in changing over?  

If you continued in cash or switched to accrual what was your reasoning?

Thanks in advance!

  • 0

    Sage 100 Contractor is designed as an accrual accounting system, first, last and always....  It is the best way to manage your business on a day to day basis. 

    Converting your accrual basis accounting balances to Cash Basis for preparation of your taxes once a year (or a couple of times a year to keep an eye on your taxable cash basis income) can be done by a competent tax accountant off the books (on workpapers) fairly quickly.  Basically, they take the reverse the balances in the major accrual balance sheet accounts at the beginning and end of the year and post them to income statement accounts and equity accounts. The first few times through, it may seem a bit hairy, but you'll get used to it. Your tax accountant may be willing to train you to do the conversion so you can check on your tax picture on an interim basis.

  • 0 in reply to Walt Mathieson

    Thanks for the Reply Walt.   That does help.  We have met with our accountant and now have the formula to make adjustments.  We run our daily books as accrual, just have historically paid our taxes in cash.   So I was curious if other companies using sage 100c pay their taxes in cash or accrual as a general rule.   

    I guess as a follow up question, has anyone on here switched from paying their taxes in cash to accrual?  It looks like an intensive process.