An income statement is one of the financial statements of the company. It shows the performance of the company over a certain period of time which is why maintaining it is an essential element of managing finances.
As it covers revenues, expenses, and income, an overview of the income statement can help the company to know its position as well as the area it has to work on in the future to improve its performance. In addition, an income statement with positive figures of net income can attract investors as well.
An income statement is the most crucial accounting tool that you can have for your business be it a big or a small business. Without an income statement, it is impossible for you to know how much profit you have made. It shows what your revenue for the entire year and what your expenses for the year were. This allows you to note down the cost of the goods sold and the revenue generated against that.
A typical income statement starts with the revenue you have made in the entire year. Then you subtract the cost of the goods sold from the revenue to get the gross profit. From the gross profit, you deduct all the expenses like salaries, rent, electricity etc. and you get the net profit. This figure highlights the total profit you have made in the entire year.
If you have a business and you need to make an income statement, then you can download any income statement template from the internet and list down all the revenues and expenses you made in the entire year. A template will benefit you in the way, you will not have to write everything down, you will just have to enter the figures and you will get the result yourself. It shall save your time and effort as a majority of the expenses will be listed already.
To maintain and manage income statements, companies either design their own templates or use the existing available ones. Using the available templates saves resources in terms of cost and time. The existing templates have been made with a thoroughness that requires a lot of time which the company can save if it uses these available templates.
MS Excel is one of those programs that provide a lot of different templates that are easy to fill as well as customize and update. Therefore, if a company is opting for existing templates, it usually chooses Excel templates.
An income statement template is an excel spreadsheet that facilitates an accounting department to input income statement figures of revenues and expenses that will then calculate the net profit or net loss. It has many associated benefits such as:
- Using a template makes it easy to maintain and put figures for the income statement.
- It can easily be updated for the time period required by the company policy.
- It clearly shows the areas that need attention. For example, a rising trend in a certain expense can be highlighted so that prompt consideration can be given. Similarly, a negative income figure or a loss probes the managers to investigate the reasons and then take timely action accordingly.
- It can easily be customized for different items required by different companies.
- The general format helps in the minimization of errors and mistakes.
- The usage of template is advisable as it saves the time and cost of designing a new income statement every time it is required.
If the income statement template is designed in a way that it is user-friendly as well as attractive, it would be helpful for the users who are putting in information as well as for the shareholders and investors who want to review the performance of the company.
Download your file below.
Income Statement Template
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