Having an accurate income statement is a vital part of the bookkeeping process because it offers you an idea of where your business stands financially.
An income statement, otherwise known as a profit and loss statement, examines your revenues against your expenses to provide you with a financial profit or loss statement.
An accurate income statement can also help you with the following needs:
Track revenues and expenses to determine the financial operating performance of your business
Determine where your business is over or under budget
Identify specific items that are causing unexpected expenditures such as phone, fax, mail, or supply expenses
Track dramatic increases in product returns or cost of goods sold as a percentage of sales
