What Is an Income Sheet?
An income sheet is a financial document that comes in numerous forms. Also referred to as an income statement or profit and loss account, this is used to show the revenues and expenses of a company over a particular period. Examples of such include daily, monthly, quarterly, and annual periods. A contrasting document would be a balance sheet, which is meant to represent only a single moment. Charitable organizations are notable exceptions as far as users are concerned since they are required to produce a statement of activities instead of an income sheet.
How to Make an Income Sheet
There are several methods and means you can make use of if you are looking to make an income sheet for your own personal use. An example of a relevant program would be Microsoft Excel. Although many turns towards accounting professionals to help them out, DIY efforts are just as worthy, provided there are useful guides or tips to lean on. Having said that, the following steps written below are guaranteed to adequately serve as a general instruction for you.
1. Open a Program to Utilize and Choose a Time Period
There are several programs you can use to create an income sheet, including MS Excel and Google Sheets. Choose the one that you are most comfortable or proficient with and then select the time period that you are looking to cover, be it a week, a month, a quarter, or even an entire annual.
2. Proceed to Format The Body of The Sheet
When creating your income statement, know that it has four distinct sections: one that calculates gross profit, one that calculates operational expenses, another that calculates gains and losses that are unrelated to the operational costs, and lastly, a section that calculates net income. Make use of your chosen program’s tools to create said sections.
3. Prepare Your Gross Profit Section and Total The Operational Expenses
When preparing these parts of the income sheet, take special care not to neglect any detail. As much as a single item missing can mess up the income sheet terribly and leave you with an inaccurate financial document.
4. Proceed to Calculate All of Your Gains and Losses
Moving on, the next step is to calculate your gains and losses by first taking note of your non-operational gains. Next, you need to add all of the gains together so that you can find your total gains. From there, you can then calculate all of the non-operational losses before combining all of the losses in order to find the total.
5. Find Your Net Income
In order to find your net income, you’ve got a few substeps to undertake. One would be to add your gross profit to the non-operational gains, then combine your operational with the non-operational losses. Lastly, subtract your total losses from the total gains to finally come up with the net income and financial statement.