I've been doing the accounts for my small business for almost decades.
We like to set aside monies monthly to cover those bills that come periodically, that otherwise would make our cash-flow run backwards (property taxes, insurance, utilities, etc.)
I've been doing it a way that I know is not correct. But it has worked.
If I knew what to call this, I am sure I could find an answer online.
We call it accruing for annual bills.
But I think accrual has a different accounting definition.
We currently are an s-corp, in California, doing cash based reporting.
Can someone tell me what this is called? Or, how to properly set this up on our balance sheet?
We like to set aside monies monthly to cover those bills that come periodically, that otherwise would make our cash-flow run backwards (property taxes, insurance, utilities, etc.)
I've been doing it a way that I know is not correct. But it has worked.
If I knew what to call this, I am sure I could find an answer online.
We call it accruing for annual bills.
But I think accrual has a different accounting definition.
We currently are an s-corp, in California, doing cash based reporting.
Can someone tell me what this is called? Or, how to properly set this up on our balance sheet?
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