A profit and loss statement, or an income statement, refers to the kind of detailed report that shows an owner of a business what their potential ability is to generate income. They do this by comparing sales and expenditures, and then looking at the net profit that would be made after every expense is accounted for.
Income statements show all the income received for a specified period of time, whether it be for a month, a quarter of the year, or annually. This is done by subtracting the expenses from the revenue so that the profit or loss for the given period can be known. These reports help business owners understand how they are doing and what needs to be done financially within their business.
At our small business accounting firm, we would recommend small businesses in Cary that are just starting out to receive monthly statements. As time goes on and businesses continue to develop and stabilize, we would recommend these statements to be reduced to either quarterly or annual reports.
After receiving several income statements about the small business, business owners can determine how to better strategize for expansion and growth.
Income statements help businesses to:
Our experienced accounting team is more than willing to assist your small business with all financial endeavors. We can help you establish your small business and create a successful future for it for years to come.