Starting a new business? Get 40% off our accountancy services for 3 months! 😀

x

An income statement is a document which is prepared either every month or each year, that reveals the profit of a business, by reporting all relevant income and the expenses incurred to generate that income. The income statement is more commonly known as a profit and loss statement.

The income statement uses information from revenue, capital, expenses and the cost of goods to illustrate how much profit a company is making, or perhaps losing during the year. The report will show when sales are made and when the business incurs expenses.

A cash flow statement shows when expenses are paid for and when revenue is collected, while an income statement doesn’t show these details. An income statement will indicate the likely profitability during the specified period of the plan. If an income statement is generated as part of a business plan, the statement should be produced monthly for the first year, every quarter for the second year and on a yearly basis thereafter. Comparison of income statements over a period of time will help recognise a trend in operational delivery. Future goals and strategies may be planned using information gleaned from your income statements.

Although an income statement records revenue in monetary terms, this figure doesn’t represent the amount of cash that a company has, as the figure on the income statement includes payments received and payments that have yet to be made for goods and services purchased using credit. This is referred to as the accrual basis of accounting.

guest
0 Comments
Inline Feedbacks
View all comments

Read more posts...

Get Ready for Small Business Saturday UK 2022

Small Business Saturday started in the US in 2010, on the first Saturday following Thanksgiving. It aims to encourage shoppers to consider…

Read More

Architects and Tax

Architecture is a highly diverse sector when it comes to tax. It’s partly down to the type of businesses that carry out…

Read More

June 2022 Client of the Month: Manea Kella

This month we spoke to Adrian Manea, architect and director at Manea Kella, a London based RIBA Chartered architecture and interior design…

Read More
Back to Blog...

Confirm Transactions

The number of monthly transactions you have entered based on your turnover seem high. A transaction is one bookkeeping entry such as a sale, purchase, payment or receipt. Are you sure this is correct?

Yes, submit my quote
No, let me change it

Please contact our sales team if you’re unsure

VAT Returns

It is unlikely you will need this service, unless you are voluntarily registered for VAT.

Are you sure this is correct?

Yes, the business is VAT registered
No, let me change it

Call us on 020 3355 4047 if you’re not sure.

Bookkeeping

You only need this service if you want us to complete the bookkeeping on your behalf.

Would you prefer to complete your own bookkeeping?

Yes
No

Call us on 020 3355 4047 if you’re not sure.