Income Statements, sometimes referred to as Profit and Loss Statements (P&L), provide the business owner with information regarding income and expenses at any given point in time. It is crucial to see what income has been recognized within the month - income from sales, services, GST or PST, or interest. On the expenses side of the equation, the business owner needs to know what he or she is spending on things like rent, insurance, utilities, professional services, office supplies, advertising, office maintenance, automobile expenses, travel, etc., etc. The end result, whether you choose to look at it on a monthly, weekly, or yearly basis, is the business owner's net income. How else can you determine how well the business is doing? Are you spending too much in one area or another? Do you need to cut back on some expenses and increase others? Do you need to put more energy into sales and marketing?
Income statements must be accurate in order to provide the precise information that your Chartered Accountant needs for year end tax filings. It all filters down...precise order entry results in precise income statements resulting in precise tax filings. Anything less will cost you more money and time !
