USA Backdating Cash Accounting Payment?

[jeeso984]

I'm a cash based accounting business. I hired a contractor in 2017, was invoiced in 2017, but the money didn't actually leave my account til February of 2018. I want to book it as a 2017 expense since that's how I actually view the business.

If I was accrual, this wouldn't be an issue, but now my accountant is saying I either need to move my entire business to accrual, or move the expense to 2018. I don't want to because it's a massive $300,000+ expense and doesn't reflect the true situation of the services being rendered 2017 and should've been paid 2017.

 

[ladyrider]

Cash is cash. You can ask other accountants but pretty sure they'll agree with your current one

 

[Fabio]

I'm a cash based accounting business. I hired a contractor in 2017, was invoiced in 2017, but the money didn't actually leave my account til February of 2018. I want to book it as a 2017 expense since that's how I actually view the business.

If I was accrual, this wouldn't be an issue, but now my accountant is saying I either need to move my entire business to accrual, or move the expense to 2018. I don't want to because it's a massive $300,000+ expense and doesn't reflect the true situation of the services being rendered 2017 and should've been paid 2017.

As far as I understand, if you still have all the requirements to be cash method then you can keep the same method. Otherwise, you should be accrual method.

 

[ladyrider]

As far as I understand, if you still have all the requirements to be cash method then you can keep the same method. Otherwise, you should be accrual method.

Businesses can't just switch between cash and accrual for tax purposes.