Income statements, also called profit and loss statements (P&Ls), are an important tool you can use as a business owner to get a clear snapshot of exactly what your revenue and expenses are. Using this allows you to determine the net profit of your business, and like other financial statements, can help you make informed choices about your business.
An income statement gives you a comprehensive look at both your income and your expenses over a month or a quarter. Using this report, you can see which services or products you sell make the highest profit and what have the lowest margins, allowing you to determine how to leverage your higher-profit goods.
Using your P&L statement allows you to understand:
At our small business accounting firm, we work with all a variety of industries in Zebulon, helping owners and operators prepare their income statements and offering a variety of financial services. We recommend newer businesses run statements once per because there will be more variables during the beginning stages of a business operating. Plus, you haven’t established long-term analysis and tracking. Once a business stabilizes, quarterly income statements are generally fine.
The first step toward maximizing profits is knowing how your business methods and operations are working for or against you. Our team of accountants are here to help you better understand your business by providing income statement preparation and accounting services for small businesses. Call C.E. Thorn, CPA, PLLC today at 919-420-0092 or complete our online contact form to learn more about how our services can directly help your business.