Create an accurate income statement with QuickBooks accounting software
Don’t let your business down by taking long hours to create a monthly income statement. QuickBooks accounting software can help you create an accurate income statement in a short period of time. All company accounts need to be correctly recorded in order for the business owner to make a proper analysis of the how well the enterprise is doing, how to improve sales, and what pitfalls to avoid.
The goal of any business is to generate profit at the end of every month – which adds up to a total profit at the end of the financial year. In most cases, profit is used to measure a company’s success and determine how – or if – it is able to continue the following year. In order to calculate these monthly totals, many things need to be considered for an income statement. These include all types of income, capital, expenses and cost of goods or services.
1. Operating section
- Revenue – this is the company’s total income that is obtained from sale of goods or services, less considerations such as discounts, returns and allowances.
- Expenses – the total cost of sales, which includes material costs, direct labour, research, overhead costs and SGA (Selling General and Administrative) expenses. SGA is the total expenses needed to sell the company’s product or service. Depreciation is another expense, also known as amortisation, which is the decline of value of fixed/intangible assets.
2. Non-operating section
- Revenues and income, which is comprises secondary activities such as rent or income from patents
- Irregular expenses or losses – such as foreign exchange loss
- Finance costs, which are the costs of borrowing money from creditors, such as bank charges
- Income tax expenses, which is the amount of money that is payable to the tax authorities.
3. Inconsistent items
- This sector is a separate report as it assists in predicting future cash flow.
- These are all types of material items that are disclosed in a separate statement. This includes disposal of property, plant, equipment, investments, discontinued operations, restructuring, litigation settlements and other provisions.
5. Earnings Per Share (EPS)
- These are disclosed on the face of the income statement owing to each one’s importance. There are two types of EPS that need to be reported: basic and diluted.
- Basic – actual outstanding stock
- Diluted – all outstanding stock options such as warrants, convertible bonds and other securities that can be converted into shares
The above is a general outline of the basic information that you will need to create an income statement. This may be quite difficult with so many numbers to work with from all areas of the company. But with the help of QuickBooks accounting software, you can ensure that all figures are correctly documented and obtain a good overview of your company’s income.
Accurate and fast-to-create income statements from QuickBooks
Have all your company account information recorded, laid out and formulated correctly. You don’t need to be a qualified accountant to create an income statement for your business using QuickBooks accounting software. Find out more about our QuickBooks accounting packages, which include the SimpleStart, Pro and Premier programs. These packages vary for different types of businesses. For accounting software that can help you to create an income statement, contact us to find out more. Browse QuickBooks selection of software products to learn more about how our packages can help you with all types of account-related work.