Keeping records and reporting for taxes is only one area of business; ideally, an entrepreneur should have personal accounting records to know what revenue, expenses, etc. In order to do this, you can create an income statement template.
The following information is in the report –
If your business is profitable and by how much, or how much trouble you are in
If there are enough profits to cover the current needs
If there are resources for scaling, if you plan to open new locations or take on new projects
How much money you can take out of the business
Who is required to fill out an income statement?
You need to compile a report if you have a business. It’s important to keep track of what is going on in different areas; which employees are growing and which areas are doing well in terms of revenue. If you are a master colorist with your own business, you need to keep track of all of your employees and the goings-on in the salon, rent, sublease, who has paid and who still has their bill hanging.
How can you fill out an income statement?
The critical indicators for an internal income statement template are the same for both offline trading and digital companies; there are only a few slight differences. An income statement is compiled based on the results of each month and in one table for the whole year. It is easier to compare data by month and with similar data from previous years. At the end of the year, an annual activity report will be received. Where should you get the data from? To compile an efficient income statement template, you must initially keep records. How much you sold/produced/provided services and how much was earned or lost. It is essential to consider all costs. There is no need to break down cash and credit.
What data should you include in an income statement?
The figures for the report for the selected period are calculated on an accrual basis and are not transferred from a bank statement or a cash register. If in the reporting month, the goods were sent to the buyer, but the account will be settled next month, you still take into account the cost of the products in the reporting period when the goods were shipped, i.e., transferred to the buyer. You do not include the debt in the income statement template. If there are several businesses, you can make one report for all of the businesses if you want to see the big picture, or for each individual business separately. Here is an example:
Build a report showing the amount of revenue for all stores and the individual product groups. If some of your other accounts are not related to the core business, for example, interest on deposits, income from the rental of office space, equipment, they are recorded in the “Other income” section. If you provide services, such as advertising, you list the areas in which you received revenue in the report:
Develop corporate identity,
Develop corporate websites,
Support current customers, etc.
It is essential to separate the expenses
Variable costs (depending on sales): If you are engaged in production, the size of your expenses depends on the volume of products sold for the period. These may include costs for the purchase of raw material and materials, salary bonuses, transportation costs for delivery of goods from the supplier to the buyer, and other expenses — advertising costs in some businesses, licenses, business permits, etc.
Permanent (independent of sales): These include rent and utility bills, lease, communication and the Internet, the salary of employees. Here you can note the amount of taxes on wages and then later put figures in the “Taxes” section. You can also add taxes on advertising costs, hospitality expenses, etc. If there are other expenses like interest on a loan, note this information as “Other expenses.” Calculate depreciation on a separate line. Once you have collected these data in one report, you can calculate different types of profit. Here is an example of a simple income statement template.
Keep separate project accounting in the income and expense report to control each individual’s profitability. Entrepreneurs who have several businesses may cease financing unprofitable projects at the expense of successful projects. Often, the information in the income and expenditure report helps you decide if you need to stop a project or continue investing money in some area.
Do not lose data
Show all income and expenses without exception. Amounts cannot be rounded. If you record amounts approximately and forgets small expenses, your income statement template will be inaccurate and unsuitable for analysis. In order to keep all documents accurate, Lumin PDF is a great tool to use. PDF (Portable Document Format) is not just an accessible and convenient format, but it’s been the standard format since 2008. The developers of the format have created a universal document display format; the result being that your document opens and looks the same on any device.
Benefits of using Lumin PDF documents
Standardization and popularity: it opens on any device with any operating system precisely in the form in which it was created;
Space and time: It doesn’t take up much space on the hard disk due to its compression algorithms;
Security: the user can configure security settings for each file. These include the prohibition of printing, no editing, use an electronic signature to determine the authenticity of a document, etc.
Lumin PDF fillable pdf forms are used for storing, cataloging, and transmitting text and graphic information on the network. Fillable pdf forms are great for demonstrating best practices. Lumin PDF fillable forms are easy to use, to show clients, and to edit. Also, the use of fillable forms pdf-style makes theft of intellectual property even more difficult.
The PDF format has been actively used in electronic document management for many years. It has many indisputable advantages, such as compactness, cross-platform, and security. However, this format also has weaknesses that are primarily associated with the software. Lumin PDF solves these problems for you and your business.
An obstacle to the even wider distribution of PDF is the insufficient number of programs designed to create, convert, edit documents in this format. There are many free applications for viewing PDF but if you want to make any changes to the file, you will have to turn to professional programs. It’s good that Lumin PDF comes to the rescue and helps us edit, extract text and pictures, combine several documents, and perform other actions with PDF.