Revenues and expenses do not appear here until their cash flows occur. The same firm may use accrual accounting for financial reporting, as well, but leaders probably refer first to this cash budget when dealing with cash flow issues. Right after Congress passed this law, many business owners began wondering if they should convert their businesses to C-corporations to enjoy the new flat tax rate. The 21% flat tax rate may be lower than your personal tax rate, but you also lose the 20% deduction if you convert your company to a C-corp. There's no one best business entity choice for all small businesses, but there is a best option for your small business right now. Use the tips above to figure out what that is. Your choice of business entity is a very important one. It can affect how people perceive your business and has a big impact on your legal exposure and finances.