Income statements are one of the most important ways companies demonstrate their financial performance over a given period. Also called a profit and loss (P&L) statement, income statements are a way to show potential and existing shareholders and others involved in the business’ operations that the company is in good health. Conversely, income statements can also highlight inefficiencies, underperforming areas and mismanagement, which is why they are often scrutinized so closely. They are also part of the suite of documentation a company is required to submit when doing their taxes.
As you can see, income statements are vital for businesses and therefore need to contain accurate information and proper formatting. We are going to take a quick look at what a profit and loss statement contains and how you can use a free income statement template to record, edit and share information regarding business’ gains and losses in an efficient way.
What does a profit and loss statement template include?
In simple terms, a profit and loss statement shows the net income of a company; that is, the amount of profit after all ingoing and outgoing expenses are accounted for, including taxes. To this end, the following should be clearly shown:
Revenue – This includes any money made from direct business activities or secondary “non-operating” revenue such as interest accrued from investments.
Expenses – This also falls into two categories. There are the primary expenses related to business activities such as cost of goods, administration, salaries and so on. Then there are non-operating expenses like interest paid to service a loan.
Gains – This should be thought of as money made from activities that are not likely to occur in each period of reporting. Something like the sale of land delivers money to the business but is not in the scope of normal operations.
Losses – The opposite of gains, losses represent irregular costs, such as settlements in court (which hopefully does not occur often).
Whether releasing an income statement yearly, monthly or quarterly, the clear and detailed presentation of these four key areas make for easy comparison and allow stakeholders to feel that your company is transparent and can be trusted.
Where can I find a P&L statement example?
If you are unsure of how to format this document, it is best to use a profit and loss template. Luckily, the profit and loss statement format is the same, regardless of frequency of reporting or the size of your business.
A great profit and loss statement template is provided by Lumin PDF, a PDF editing software company. While some people use income statement templates in Word or Excel, PDFs are the safest option. For one, formatting lists and tables in Word can be a nightmare, and in Excel, things can render differently depending on the application used to open the spreadsheet. PDFs display the same, no matter what the device, and while they used to be difficult to format, companies like Lumin PDF give users the ability to edit profit and loss templates, add fillable fields with ease, and then share and store them with cloud integration.
Lumin’s profit and loss account template is extremely clear, using bold fonts and formatting that is familiar to people who regularly review P&L statements. Fillable and customizable fields are already set up for all areas that businesses are likely to report on. Lumin PDF integrates with Google Drive, OneDrive and Dropbox, meaning that you can have a monthly income statement template stored in the cloud, to be shared and edited in real-time by anyone with the right permissions in your organization.
Manipulate income statements with ease
With the decline of the traditional office setting and corresponding rise in online and remote solutions, more and more people are creating and sharing documentation in a purely virtual setting. This is why finding an efficient way to handle documentation is so important. If you are a one-person operation, you are likely handling the day-to-day business operations and most of the administration. This is exactly where free profit and loss templates for self-employed people can come in handy, everything is already set up and ready to go. Not having to research and come up with your own template leaves you free to concentrate on what is important, getting the customer facing side of your business to run smoothly and effectively.
Lumin PDF is one of the leading editors on the market and uniquely suited to this new online environment. The software includes e-signature capabilities, the option to split and merge files and the ability to annotate documents, so if you are working remotely on a projected income statement template with colleagues from the finance department, all changes and comments can be easily tracked.
From personal income statement templates to profit and loss sheets for big businesses, editable PDFs are the way to be efficient while having a professionally formatted document to present to shareholders and all the other people invested in your business.