The Best Way to Determine Income & Expenses for a Small Business
It can sometimes be difficult for small business owners to create budgets when they first start their businesses. Keeping careful track of expenditures, overhead and income allows you to create records that offer an overall view of the amount of money coming in and going out of your business.
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Instructions
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Create a spreadsheet or install accounting software to track your income and expenditures. Use any spreadsheet program with which you are familiar.
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Add column headings to your spreadsheet that match the types of expenses and income your business has. For accounting software, input the types of income and expenses in the appropriate fields or use the software's specific options to create income and expense categories. Common expenses include inventory, supplies, utilities, rent, renovations, payroll, taxes and advertisements. Income categories include direct income, recurring income, investment income, sales commissions and partnerships.
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Gather receipts, invoices, deposit slips and any other relevant documents or paperwork so you can record the money flowing in and out of your business.
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Sort your income and expenses into the categories you created for your spreadsheet or accounting software. Enter the amounts into your spreadsheet or accounting software in the correct categories.
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Add new columns or entries as required to track income and expenses. Use this information when you wish to create a profit and loss statement.
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