When compiling this category, consider anything that brings money into the company, including things like interest income. On your chart of accounts, you could create line items for “income from food sold” and “income from books sold.” You can then compare the profit levels and cost of goods sold, allowing you to better determine your financial health. When you can see which locations or events bring in the most cash flow, you can manage your business more wisely.įor instance, imagine you have a store that sells an array of items. Instead of lumping all your income into one account, consider what your various profitable activities may be and sort them by income type. It makes sense to create separate line items in your chart of accounts for different types of income. Most new owners start with one or two broad categories, like “sales” and “services.” While some types of income are easy and cheap to generate, others require considerable effort, time, and expense. Income tends to be the category that business owners underutilize the most.
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