Accounting software by Intuit, QuickBooks is used for its basic bookkeeping tools as well as deeper insights and dedicated support. The software mainly targets small and medium-sized businesses as well as freelancers.
Generating income statements or profit and loss reports is one of the key features of QuickBooks. As QuickBooks describes it, an income statement can give you a snapshot view of the financial performance and profitability of your business. This is useful when making financial decisions and the statement is vital to understanding cash flow and profitability.
While outsourcing your finance to an accountant in Ilford can give you access to professional expertise, accounting software like QuickBooks can simplify otherwise complicated and time-consuming tasks like the preparation of an income statement.
This does not mean that outsourced financial management services do not have their perks. By outsourcing your finance, you can access finance and accounting services like financial statement services, company secretarial services, and bookkeeping. In addition to this, you can also benefit from a reliable financial business partner or a trusted business advisor.
Software like QuickBooks can be extremely useful to a business, however, and generating a profit and loss report has never been simpler. There are various items you must review when generating an income statement through QuickBooks.
Balance sheet
It is also recommended that you check your balance sheet before generating an income statement using QuickBooks. Financial reporting services use a company’s assets, liabilities, and shareholders’ equity when preparing a balance sheet and it is one of the three main financial statements used when evaluating a business.
While one of the financial statements is a statement of cash flows, the other is the income statement. Given the significance of both a profit and loss report and a balance sheet, a reliable financial business partner or accountant will show you the importance of checking your balance sheet when generating an income statement.
Cash and accrual
The default setting of QuickBooks template reports is accrual accounting as it matches transactions to the time period they affected. This is ideal for most cases but there could be instances when you need a cash-basis report. If this is the case, there are steps you can take to make the necessary changes to the software.
The cash method ratio option on QuickBooks will switch from accrual accounting to cash-basis and, unless you save a custom version of the report, you will have to select the cash method ratio option whenever you run the report.
How current is your data?
Generating an income statement through any accounting software requires data on your business. This applies to any financial management service and statutory reporting services. When generating a QuickBooks profit and loss report, it is important to review your data, making sure it is up to date.
Current data is required when generating profit and loss statements to the current date and it is vital that you check your data before generating a statement. An accountant or outsourced financial management services can provide you with the latest data on your business while a reliable financial business partner may advise you on the best ways to ensure your data is up to date.
This is also important if you do not routinely reconcile your bank accounts. While other features on the accounting software can help you with this, you can start by updating your accounts and making sure your transactions are organised and approved.
You can then synchronise any applications that you use and enter all outstanding expenses and sales you do not automatically import.
Data range
A trusted business advisor will also tell you to pick the right reporting options for your goal. This can include monthly, quarterly, and annual reporting. However, your QuickBooks year must match your fiscal year or the data range used will change. To make sure your QuickBooks year and your fiscal year match, adjust the advanced company settings on the software.
When you change the dates on the software, make sure these changes do not affect any other reports you are generating or that the date does not reset whenever you leave the page.
Company goals
When outsourcing your finance to company secretarial services UK or an accountant in Ilford for bookkeeping, it is vital that you keep in mind your company goals and objectives. This applies when using accounting software like QuickBooks as well, especially when generating a profit and loss report.