There are two methods to record a business transaction - the cash method or the accrual method.
With the cash basis method, taxpayers record transactions when cash changes hands. This means you report all income in the year that you receive it and deduct expenses in the tax year that you paid them. The cash method is easy to use and is the default for Hurdlr Premium users. Hurdlr Premium uses the cash method by tracking your expenses and deposits as soon as they are fully processed by your credit card, bank account, or other integration.
With the accrual method, taxpayers record transactions when revenue is earned or expenses are incurred, rather than when cash changes hands. Accrual is the traditional method of accounting for business activity, because it better matches when business events can be recognized. Hurdlr Pro uses the accrual method by recording the income on your General Ledger when an invoice is sent.
Disclaimer: The information contained here is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.