If you plan to start a business in the United States, surely you have already heard that accounting in the North American country is easier than in other places. Well, here at FREEDOM GES we offer a bookkeeping service with support in Spanish, to make things even easier for you.
In any case, accounting is basically similar around the world, except for certain details in which the US may be different. Now let’s look at the differences.
Integration of checking accounts with accounting systems
In the US, accounting systems are directly integrated into the company’s checking account, making it possible to monitor movements almost instantly.
This technology facilitates accounting work since transactions can be classified and receipts and invoices requested in advance. There is no need for the arrival at the end of the month or for the details to be sent in advance.
Another point is that most US small businesses with billings below $25 million in 3 years use an accounting method known as cash basis when reporting their tax liabilities.
What is the Cash Basis?
This accounting method recognizes income (and expenses) based on the date payments are received (or made) and not based on the billing date. This ends up being a great advantage for sales carried out in installments since the tax obligation is only made after receiving the corresponding payment.
On the other hand, if you are accustomed to having high volumes of buying and selling products, it may be more advantageous to operate under the accrual method. In this method, the sale is recorded when an invoice is issued and not when it is canceled under payment, this makes it easier to manage accounts receivable and payable.
Presentation of Invoices
In the US, the invoice is not required to appear as an official document or accompany the goods in transit.
An invoice can be prepared in a simple computer program such as Word, as long as it contains information about the customer, the product, the payment, etc.
Regarding the transport of merchandise, since there are no barriers or tariffs for sales between states, you can send an invoice electronically to your client without the need to attach a physical copy to the products. Thus it is that commerce in electronic networks is more fluent in the USA.
Tax Payments when Generating Profit
Another advantage is that in the US, the tax is imposed on a profitable operation when profit is generated and not at the level of gross sales.
It is possible that this is the fairest tax mode given that if no profit is generated, tax obligations do not materialize, and the setbacks that the initial investments represented in the nascent company can still be reflected during subsequent periods.
We understand that sometimes when a business start, the entrepreneur carries out all the responsibilities in the company; including accounting. Apparently, this can save you money since you do not have to pay a third party, but in most cases, in the long term, it can generate fines with the IRS, due to ignorance of the laws, also if accounting is not your expertise, it can cause you too much stress and at the end, your business accounting will be messy and incomplete. The best recommendation is to seek help and delegate this activity to an expert.
Please give us a call 1-561-877-1373 and find out how we can help you. We specialize in working with small business owners from all around the USA.
FREEDOM GES
122 N Military Trail suite f, West Palm Beach, FL 33415
info@freedomges.com
www.freedomges.com
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