How To Create Monthly Income Statement For Your Business
You must have an income statement while running a business. This document is useful to know the condition of the business such as the profit you earn from it. Creating the document is not as complicated as you can imagine. Just follow the steps below to create a simple income statement for your business.
Set the Time
This document is used to record business revenue and expense in a certain period of time. You may set the period monthly, quarterly, or annually. Just make sure that the period is fit with your business cash flow so you can create an accurate income statement.
Write Down the Header
The function of the header is to know the detail including the period. For a simple statement document, you just have to write down the company’s name and period.
Create the Statement’s Body
The income statement body consists of 4 different sections. Those are revenue, operating expenses, additional income, and net income. In the revenue section, you can write down the gross profit or amount of money you earn from the business.
You have to write down the amount of money you have to spend on the business operational. It is also a must to write down the detail of the expenses and the types of expenses you have made. If you have additional income different from the sales, you can write down it in this section. Subtract your expense from the revenue to know the net profit and then write down it on the net profit section.
You can separate it statement into three columns. First, you can write down the type of statements such as sales revenue, operating expenses, and additional income. In the second column, you can write down the detail of each statement such as the cost of goods sold, gross profit, advertising, supplies, other revenue and expenses, and many more.
The third column is the place to write down the amount of money so you can get the accurate net income from your business.
Find an Income Statement Template
If you need a simple process, you can just download an income statement template. The template is offered for free. After downloading the template, you can edit or fill the blank section based on your business’s financial condition.
Create an income statement regularly and keep it. You can open the document to know the financial condition of your business.