They’re often used interchangeably-COS by retailers, and COGS by manufacturers. These accounts track the money you have to spend to create the product you sell your customers or clients. Cost of Sale (COS) and Cost of Goods Sold (COGS) are unique.Expense designates any account used to track money leaving your business.Income designates any account used to track money coming into your business.Likewise, if there are any transaction categories you need for your business that are missing from the Chart of Accounts, you should add them. The same follows for any other account that doesn’t apply to your business. The Chart of Accounts includes an account for “Gas & Auto.” But if you don’t drive for work, you don’t need this row-so you can delete it. Add or remove accounts from the Chart of Accounts Here’s how you adapt it to your business. The info in the copy of the Income Statement Template you downloaded is only there as a placeholder. Or, think about hiring a bookkeeper (like Bench).Ĭustomizing the Income Statement Template for your business If you’re at the point where you believe your business needs double-entry bookkeeping, it’s time to use accounting software. However, it’s also more work to maintain-and difficult to set up in Excel. It’s more effective than single-entry for tracking cash flow and protecting against errors and fraud. The double-entry method of bookkeeping is standard for larger, more complex businesses. Every time money enters or leaves your business, it’s recorded once, as a positive (income) or negative (expense) value.Ī quick heads up about double-entry bookkeeping. Single-entry bookkeeping is a good choice if you run a small, simple business with a low volume of transactions. And it has everything you need to get a grasp of single-entry bookkeeping in Excel. But when you’re getting started, the Income Statement Template is tidy and approachable. Later, you may prefer to use a different template, or even create your own. Before we get started on DIY bookkeeping, download a copy of Bench’s Income Statement Template.
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