Providers of goods and services may experience a disconnect between how their cash income is reported for accounting purposes versus how it’s reported for tax purposes. Income taxes require that when cash for goods or services is received, it must be reported. Accounting methods require the cash for goods or services be matched with the expense of the delivery of the goods or services when those goods are shipped or services are provided. CBIZ revenue recognition specialists can assist with these timing differences and revenue recognition issues that your company could encounter.
Our tax specialists will work closely with you to determine if the cash received from your goods and services can be deferred for tax purposes. Clients who have advance payments or deferred revenue in the liability section of their balance sheet may be able to defer eligible cash received for one year or until it is recognized for accounting purposes. We analyze your fact pattern to determine if either the advance payment or the deferred revenue rules will apply and perform any necessary accounting method changes.
Through our national network of accounting, tax and business providers, we bring a depth and breadth of expertise to every client engagement. You can rely on our experience to ensure you take advantage of revenue recognition tax rules while staying in compliance with financial reporting regulations.