- Joined
- Jan 18, 2020
- Messages
- 6
Rep Bank
$65
$65
User Power: 83%
Hi all!
Hope you're having a lovely Monday. As tax season comes to an end I'm facing a little dilemma here.
My business sells physical products that are quite elaborate to manufacture. due to the worldwide logistics shitshow, we've had several delays delivering product to our client this year. We sell only B2B, and our invoices are paid net 60.
Now on to the tax question...
in late December one of our clients placed a PO for around 45K. In the accrual method of accounting (which we use in our business), we're liable for taxes on this invoice.
Here's the thing: We have not delivered the product as of April 11. it will still be another 2 weeks before we deliver, and only then the 60 days before getting paid will start counting.
I read somewhere that accrual accounting does take into account the actual delivery of goods, otherwise the invoices are not tax liable. In essence, your client is nor responsible for paying you because you haven't delivered, and You are not responsible for taxes since you haven't really closed the deal yet.
Has anyone encountered this issue in the past?
I highly appreciate any feedback.
Cheers!
Hope you're having a lovely Monday. As tax season comes to an end I'm facing a little dilemma here.
My business sells physical products that are quite elaborate to manufacture. due to the worldwide logistics shitshow, we've had several delays delivering product to our client this year. We sell only B2B, and our invoices are paid net 60.
Now on to the tax question...
in late December one of our clients placed a PO for around 45K. In the accrual method of accounting (which we use in our business), we're liable for taxes on this invoice.
Here's the thing: We have not delivered the product as of April 11. it will still be another 2 weeks before we deliver, and only then the 60 days before getting paid will start counting.
I read somewhere that accrual accounting does take into account the actual delivery of goods, otherwise the invoices are not tax liable. In essence, your client is nor responsible for paying you because you haven't delivered, and You are not responsible for taxes since you haven't really closed the deal yet.
Has anyone encountered this issue in the past?
I highly appreciate any feedback.
Cheers!
Dislike ads? Become a Fastlane member:
Subscribe today and surround yourself with winners and millionaire mentors, not those broke friends who only want to drink beer and play video games. :-)
Membership Required: Upgrade to Expose Nearly 1,000,000 Posts
Ready to Unleash the Millionaire Entrepreneur in You?
Become a member of the Fastlane Forum, the private community founded by best-selling author and multi-millionaire entrepreneur MJ DeMarco. Since 2007, MJ DeMarco has poured his heart and soul into the Fastlane Forum, helping entrepreneurs reclaim their time, win their financial freedom, and live their best life.
With more than 39,000 posts packed with insights, strategies, and advice, you’re not just a member—you’re stepping into MJ’s inner-circle, a place where you’ll never be left alone.
Become a member and gain immediate access to...
- Active Community: Ever join a community only to find it DEAD? Not at Fastlane! As you can see from our home page, life-changing content is posted dozens of times daily.
- Exclusive Insights: Direct access to MJ DeMarco’s daily contributions and wisdom.
- Powerful Networking Opportunities: Connect with a diverse group of successful entrepreneurs who can offer mentorship, collaboration, and opportunities.
- Proven Strategies: Learn from the best in the business, with actionable advice and strategies that can accelerate your success.
"You are the average of the five people you surround yourself with the most..."
Who are you surrounding yourself with? Surround yourself with millionaire success. Join Fastlane today!
Join Today
