No way! For government contractors, your books must be on the accrual basis. So if you don’t see accounts payable, accounts receivable, or accrued expenses (especially payroll and vacation), your costs are not accumulating in the right time period to compute your indirect rates, contract billings, and income taxes (unless you’re a cash basis taxpayer).
This is myth #7 of our SBIR Accounting Myths blog series. George Moker is a CPA and an entrepreneur who brings a real approach to managing the accounting needs of your firm. George created this series of blog posts to his more than 30 years of small business and startup experience in an attempt challenge the myths about an adequate accounting system and its importance within your organization.
For more information on how we can help with your SBIR accounting needs, please visit us at www.mokercpa.com