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Should previous year invoices included in current year expense for a start up company?

I work for a start up company in 2008.The company start bookkeeping as of 2008. Should I include the invoices incured 2007 on 2008 book as current expense? Thanks.

Public Comments

1. It depends if the company has their tax year set as a fiscal year or calendar year. This is determined when someone representing the firm contacts the IRS for the firm's EIN. A calendar year for business is just that, the year from January 1 through December 31. A fiscal year for a business is a 12-month start and end period other than the typical calendar year. An example would be October 1, 2007 through September 30, 2008. As I am getting into this, it is good to state there are a few simple variables to look at (like the calendar year v. the fiscal year). If an individual incurred the expense on behalf of the company, then they can submit it to the firm for reimbursement this year. It then becomes an expense for 2008. If the firm was organized in 2007 but not functionally operating until now (2008), you would be able to include it as an expense. If it is a large expense, you may be able to (or required to) split it up over the next few years. The best thing to do is consult with a CPA that is familiar with small businesses. If the firm does not have one yet, make sure you ask him or her if they specialize in small businesses. Many CPAs speciallize in different areas of business such as foreign investment, sole proprietors, estate taxation, etc.