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#accrual-accounting

Accrual Accounting

Accrual method accounting principles, conversion from cash basis, and revenue recognition timing

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10 min read

Virginia's New Paid Sick Leave Law: The Small Employer's Timeline, Payroll, and Bookkeeping Guide

Virginia's SB199/HB5 phases paid sick leave in by employer size — 50+ employees on July 1, 2027, 25+ on January 1, 2028, and every employer with at least one employee on January 1, 2029. Employees accrue one hour per 30 hours worked up to 40 hours a year, unused leave carries over, and violations expose employers to double damages plus attorney's fees. Here is how to configure payroll, audit an existing PTO policy, and book the compensated-absence liability.

Mike Thrift

payrollcompliancesmall-business
8 min read

The 2½-Month Bonus Rule: Why Year-End Bonuses Must Be Paid by March 15 to Be Deductible

An accrual-basis employer can deduct year-end bonuses in the year earned only if employees actually receive the money within 2½ months after year-end — March 15 for calendar-year businesses. The deduction also requires a liability fixed by December 31 under the all-events test, and it fails for bonuses owed to related parties under Section 267 regardless of payment timing.

Mike Thrift

tax-planningaccrual-accountingpayroll
10 min read

Medical Spa Bookkeeping: Why Your MSO/PC Split, Membership Revenue, and Injectable Inventory Need Their Own Books

Med spas that book prepaid packages as day-one revenue, expense injectables on purchase, or run the MSO and PC through one bank account produce financials that fail audits and due diligence. This guide covers keeping separate books per entity with reconciled intercompany balances, recognizing package and membership cash as deferred revenue per delivered session, capitalizing neurotoxin and filler as inventory until use, and a monthly close checklist that ties POS unearned balances, physical counts, and management fees to the ledger.

Mike Thrift

healthcarebookkeepingrevenue-recognition
11 min read

Indoor Playground Bookkeeping: Why Party Deposits, Memberships, and Cafe Sales Each Need Their Own Ledger

Party deposits are a contract liability under ASC 606, not income — a $100 deposit stays in deferred revenue until party day, annual memberships spread over twelve months, and cafe sales carry food costs and separate sales-tax rules. How indoor playgrounds should split their books by revenue stream, handle breakage and state escheatment on unused passes, and track seven weekly KPIs from deferred-revenue balances to cafe attach rate.

Mike Thrift

bookkeepingsmall-businessrevenue-recognition
10 min read

Zone Skipping for Small E-Commerce Shippers: When One Truckload Beats 3,000 Parcel Labels

Zone skipping loads all parcels bound for one region onto a single truck and hands them to the carrier near the customer, repricing a Zone 7–8 cross-country label as bulk freight plus a Zone 2 final leg — a 20–40% cut on that leg and roughly $5,000 off a $30,000 week for 3,000 New York–to–California packages. It only pays above about 1,000–1,500 parcels a week to one region and adds about one transit day; this guide covers the break-even math, the mistakes that erase the savings, cheaper alternatives like split inventory and rate shopping, and how to book linehaul freight, consolidator fees and final-leg postage so the program's margin is actually measurable.

Mike Thrift

e-commercesmall-businesscost-management
10 min read

Washington's Homeowner Recovery Program Is Live: How Contractors Should Reserve for Judgment Claims That No Longer Go Away

Since July 1, 2026, Washington homeowners can collect up to $25,000 of an unpaid contractor judgment from the state's Homeowner Recovery Program, after which L&I can pursue the contractor for reimbursement with interest on payment plans of up to 36 months. This guide explains the eligibility rules, the post-2024 bond levels of $30,000 general and $15,000 specialty, and how a residential contractor should log disputes, accrue probable losses under ASC 450, fund a separate cash reserve, and amortize a state repayment plan in a plain-text ledger.

Mike Thrift

constructionsmall-businessrisk-management
12 min read

Surf Shop and Dive Shop Bookkeeping: Why Your Best Season Can Still Leave You Broke by October

A surf or dive shop is six businesses under one roof — school, retail, travel, rental, air fills, and repair — sharing one seasonal cash window. Learn how separate revenue lines, deferred-revenue accounting for prepaid lessons, and 12-month cash forecasting that isolates inventory purchases reveal which business actually profits and whether summer funds the winter.

Mike Thrift

seasonal-businessbookkeepingsmall-business
16 min read

Wholesale Distributor Bookkeeping: Freight-In, Vendor Rebates, and Consignment Inventory

A guide to the three bookkeeping fault lines that distort a wholesale distributor's margin and balance sheet — capitalizing freight-in into landed cost, accruing vendor rebates as a contra-COGS reduction instead of income, and tracking consignment inventory by location and ownership — plus a monthly close checklist and journal entries.

Mike Thrift

bookkeepinginventorycost-of-goods-sold
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