We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Are the Best Tips for Preparing a Monthly Income Statement?

By G. Wiesen
Updated May 17, 2024
Our promise to you
WiseGEEK is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGEEK, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

When preparing a monthly income statement, it is important for it to be accurate and accessible. The information presented on it should be relevant and complete, which means that proper accounting and tracking of revenue and expenditures is vital. Color-coding often makes information easier to find and read, especially net income that is typically expressed using black or red. While a monthly income statement can be created on paper, it may be easier to use a software program such as a simple spread sheet to quickly enter values and calculate results.

Creating a monthly income statement is important for any company or individual who wants to track expenditures and see how revenue compares to costs. One of the most important things about this document is that it needs to be complete and accurate, otherwise it is useless. All sources of income need to be considered for an individual, such as a job, returns on investments, and rent received on property. Companies may have more considerations for revenue on a monthly income statement, but it is just as important that all of them be included.

Any expenditures that a person or business faces must also be on this document. Incoming money is important, but it needs to be compared to funds that are going out. Rent, utility bills, and food expenses are all examples of costs that an individual needs to consider. Businesses preparing a monthly income statement should look at employee salary, overhead costs, and payments to vendors that are all important expenses.

This information can become difficult to track or read once it is part of a monthly income statement, and color-coding can help rectify this. All expenses of a certain type, such as different bills that are similar but to various sources, can be documented in a single color. Similarly, one particular color can be used to indicate a certain type of income, such as payments received from tenants in different rental properties. The net value each month for income or revenue is typically color-coded, with black indicating a profit for the month and red showing a loss.

It can also be easier to create a monthly income statement using computer software. Graph paper or ledgers with columns can be used to make a hard copy of this document, but this is not always practical. Spreadsheet programs are often excellent choices for generating these records. Such software can typically calculate values and make the creation of a monthly income statement fast, easy, and accurate.

WiseGEEK is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.