Can You Hide Cash Payments? (Short Answer: No)
Question: I was recently asked about receiving cash payments from customers. After showing him how to record cash payments against a customer invoice, it became clear that he wanted to keep the cash, not record it as income.
Answer: Truthfully, I have never been asked this before and was floored. When I said that this was not legal, the response was that “everyone” did it, and he only wanted to know how others hide the money.
My advice is if you receive cash as payment from a customer, record it as you would any other deposit and deposit it into your business. It’s not worth the risk or the hassle, and it’s the legal thing to do. Would you want to do business with or hire someone who did this?
Please email accounting questions you would like considered for the column to HGatter@AccountingSupportLLC.com with the subject line of "Ask the Accountant."
Harriet Gatter, owner of Accounting Support LLC, was an ad specialty distributor for 23 years and an adjunct professor of accounting at Neumann University. She sold her ad specialty business in 2012, became certified as a QuickBooks ProAdvisor, and now works exclusively with ad specialty distributors nationwide on their QuickBooks, order management and accounting needs.