Running a business requires careful tracking of all profits and losses of an organization, company, enterprise. It is necessary to prepare reports on this indicator for timely analysis and preparation of documentation for tax authorities.
It is worth taking advantage of Finoko’s offer and using the profit and loss statement.
Features of the report
This financial document is the basis for understanding the state of affairs in the company. It records all cash receipts from activities, and records any expenses required for running the business.
These reports also include information about changes in the assets that the company has, and obligations to state, public or commercial structures.
The use of these reports allows you to solve several problems:
- Determine the features of income and expenses for certain periods of time.
- Consider trends in the profitability or unprofitability of the company, and take the necessary measures based on these calculations.
- Form documentation for the tax service, and deduct all legally possible amounts from the taxable base.
Income includes all cash receipts that the company receives from its activities. In expenses — the costs of maintaining its activities, from paying for electricity to funds spent on an advertising campaign.
Methods of creation
There are two types of profit and loss reports:
- Cash, used for startups, small companies and enterprises that do not have inventories. The Finoko application allows you to generate this method of reporting automatically. It is enough to upload all the information about bank payments, registration of received income. This is the simplest and most convenient method, has greater clarity, allows you to immediately determine the profitability or loss of the company.
- The accrual method works on the principle of recording all expenses, or received income, immediately after they appear, without waiting for the receipt or withdrawal of funds. It allows you to more accurately track all transactions, take into account the fact that has already happened, affecting the financial condition of the company.
Both options allow you to constantly analyze the current state of the company and predict its future. It is recommended to prepare such reports regularly in order to promptly respond to the changing situation in the business.
