Accounting Methods & Periods
Improve cash flow and tax efficiency through the methods your business uses to report income.
The tax accounting methods a business uses has a direct effect on taxable income, and the timing of income and expense recognition can matter as much as the total amount.
In dynamic business environments, methods that were appropriate at one stage of growth may become outdated as tax laws and overall tax objectives evolve. Companies should periodically review their accounting methods to confirm they continue to support their tax strategy effectively and efficiently.
BPM’s tax professionals help businesses pinpoint planning opportunities through tax accounting methods studies that will help them achieve tax goals.
What Accounting Method Studies Can Address
An accounting methods study can help companies evaluate whether their current methods align with their broader tax strategy and identify opportunities to adopt methods better suited to their specific objectives.
Depending on the company’s facts and circumstances, this may include accelerating deductions, deferring revenue recognition, accelerating income, or deferring deductions to efficiently use tax attributes or respond to anticipated changes in tax rates.
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BPM’s Approach to Accounting Method Changes
An accounting methods review can help companies evaluate whether their current tax accounting methods remain appropriate in light of their business objectives, tax profile, and evolving tax law. We assist clients in identifying method changes and elections that may support cash tax planning, including opportunities to increase cash flow and defer income taxes while maintaining compliance with applicable tax rules.
Our process can also help companies review existing tax positions to identify areas of opportunity, potential exposures, and methods that may warrant correction. Where improper or outdated methods are identified, we can help bring those methods into compliance, which may reduce audit risk and potential IRS adjustments.
In addition, we help clients assess new opportunities that may arise from changes in tax law, IRS guidance or policy, business operations, or financial reporting, and evaluate whether calculations can be simplified to reduce administrative burden and free up internal resources.
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