Income Statement Example For Service Business

Let us name the company strauss printing services.

Income statement example for service business. Use only those categories that pertain to your small business. In any business setting finances will be a big topic. You classify those expenses that are directly related to the delivery of your service as costs of sales. How to prepare an income statement for a service organization.

The statement covers the company s financial performance for a given period a month quarter or even year. An income statement also called a profit and loss statement lists a business s revenues expenses and overall profit or loss for a specific period of time. All amounts are assumed and simplified for illustration purposes. Like all businesses one of the main financial statements a service company will prepare is the income statement.

Your specific costs of sales are going to be. Merchandising business and for manufacturing too. The income statement for a service company focuses on cost of sales and expenses. There is no space for inventory because there is no inventory in a service based business.

Watch your overhead expenses like a hawk. In addition the company takes depreciation expenses for its storefront building computer system and delivery van. While income statements vary. It shows the expenses that are directly associated with the services rendered.

Companies monitor their income performance to determine their losses and gains and financial consultants and advisors are hired to help them prepare and review financial statements to know their strengths and weaknesses and how they can do better. See how creating an. Revenue expenses operating income. An income statement reports the following line items.

For example if you have a service business you would probably use fees collected or something similar. Projected income statement abc cleaners year 1 year 2 year 3 revenue residential sales 508 806 596 643 650 256 up sales residential 176 976 207 528 226 176 commercial sales 0 0 0 vehicle cleaning sales. Some income statements of service businesses present cost of service in a separate line after revenues. Just remember the basic formula for income statements.