How to Use and Income Statement Template
Many business owners can be fearful of anything that relates to financial statements. This will result in them losing out on financial gains and opportunities. This is why it is important to be able to distinguish between the financial tasks that are beyond one’s skill set and those that are quite simple.
So I hope that you appreciate the tips that I am going to give you now. After all hiring a professional or even just a bookkeeper can be quite pricey, besides being time-consuming. So I’m here to tell you that if you can’t add and subtract or even if you can’t without a calculator then an income statement is something that you could yourself.
Of course I would caution you from attempting to prepare a full set of financial statements by yourself. And even if you have the guts attempt preparing a full set of financial statements it is very likely that you may need the services of a certified public accountant in order to have a compilation, review, or audit done.
The best thing to do if you are unsure about what an profit and loss statement looks like is to find one on the Internet. This can be done by looking at the financials of most all Publicly traded companies that are required to make available their financial statements which include an income statement on a regular basis.
There are two basic sections of this report when it is prepared using the single step method. If this is your first income statement I would not suggest that you attempt a multi-step income statement, or at least if you do have it reviewed by an accountant or bookeeper.
The first section is revenues, this section should be on top of the report. It is possible that there may be revenue items that are better placed at the bottom, this would be reserved for miscellaneous type items.
The second section be for expenses. The expenses can be sorted either from the largest to the smallest or alphabetical by their category.
Now that you understand what the income statement should look like it was good idea to use a template to make your final copy look really professional. All it takes is an understanding of what is supposed to go where to utilize a template or sample income statement.
