Income statements, also called profit and loss statements, are reports that give the business owner a detailed look at business’s ability to generate income. Income statements compare sales to expenses and calculate the net profit after all expenses have been deducted.
Properly prepared income statement reports include:
Profit and loss statements include all income for a given period (a month, a quarter, or a year), by subtracting all expenses from revenue to determine profit or loss for the period. Since every business is unique, each business requires a different level of reporting. It is recommended that newer businesses receive monthly statements and as the business ages and stabilizes, statements be reduced to quarterly or even annually.
Income statements help businesses determine their future operating performances and help the company plan for expansion.
By managing an income statement, businesses can:
Help your business survive those unstable first years and prepare for success by working with a team of professional accountants. Our team of CPAs are experienced with small businesses and are here to help you along the way.