Well...
As far as IRS is concerned the revenue is in when you billed, not when the cash came in.
And if you show the billing for next year, it'll probably affect your customer books as in their case the cost gets in when the bill is entered (again no matter when they pay it).
There's many other things you can keep in mind, let's say you pay march through december for vehicle insurance (most companies charge 10 months then you have 2 free months). So let's say is 2400 for the year, but you paid it all this year. Keep in mind 400 dollars are actual cost of next year.
To a homeowner it probably won't matter, but you still have to show the billing for next year.
You can buy some material, but if it's not used, you're supposed to give an accurate estimate of stocked materials. And if let's say you have 10K in inventory in the beginning of the year and now you have 20K , the 10K extra will be considered profit. Why? because you deduct it when you enter the bill from the supply house.
for instance:
revenues: 100K
paid materials : 30K
profit = 70K
but let's say you still got 5K of that material, it means your profit is actually 75K
My first year in business and i have a question. Right now I have a few checks on my desk from commercial customers. Not small 1-2 man companies. They are both software companies that own their own building- so they have lots of money coming in and out every month. I was thinking of holding onto these checks and cashing them in January.
Is this a bad practice and disruptive to their book-keeping? Both are great customers. The amount is small to them but can make a difference to a one man show like me If I can wait to pay taxes on it for another 15 months.
On monday I am finishing a job for a homeowner and should get a check for $3500. I was thinking of bringing it up to them. "Do you mind If I cash this check next year? It would help with my taxes." I hate to do something like that to a homeowner near Christmas so I would ask them first.
What do other companies do as far as far as year end buying? Buy material in bulk? Pay for advertising for next year?