Welcome to Income Statement Re-imagined!
The "Income Statement" is the most common and easiest of Accounting Reports to digest, as long as you modify the report name itself
Why did they call it an "Income Statement"?
For ONE, It reports on both Income and Expenses, not just Income...
For TWO, the singular resulting value is known as "Net Income" or "Profit" if positive, not "Income"...
Why isn't this report known BEST as the "Net Income Statement"?
A careful study of all the Dogma of Bookkeeping and Accounting might surprise you.
That's when you might realize that nothing was named quite right. Many items are unnecessarily confusing, and it sure seems like an Educational Conspiracy in one form or another transpired...
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If you could "re-imagine" the "Income Statement", outside of the name itself, is there anything you might add?
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We did that and what we added was a a small area for a sub-report on the same report sheet along with a strange option that gives some fun insight that helps a great deal when viewing a "Net Income Statement".
This is nothing like "Balance Sheet Reimagined" which we'll get to later. On that report we changed almost everything around. These changes are smaller, but in a way that most will find rather appealing.
Welcome to Income Statement Reimagined.
A Simple and Refreshing thought with Tantalizing Ramifications
Sections Below include:
Meet the New Income Statement! -- A "Net Income Statement" with a few fun options!
How does it work?
The Report Header
Half #1 - Company Net Worth (Incremental)
Half #2 - Company Net Worth (Absolute)
Meet the New Income Statement
A "Net Income Statement" with a few fun options!
Our Reimagination of Bookkeeping came with a pretty big leap. That was the creation of a FREE spreadsheet based template and FREE education to replace the way overburdensome relational database solution that Quickbooks and comparable have always been. Many of our features and options are the result of the spreadsheet environment.
In Accounting there are FIVE primary account types. Asset, Liability, Equity, Income and Expense (ALEIE). NOTE: Cost of Goods Sold (COGs) is a subcategory of Expense that is often times broken out seperate as if it is separate from all other account types when it is just a sub-type for Expense.
The "Net Income Statement" reports on cashflow that entered and exited the business with an "Income" or "Expense" categorization only, with COGs also included in that since they are a sub-expense category.
=== UNIQUE FEATURES ===
1) ON / OFF Switch
All data is entered into journals and once there that data is never "duplicated" or "rewritten' again. Each and every report is simply a "view" of that journal data manipulated in another way. As such math related to the Income Statement Calculations is running at all times with each Journal Entry you make. To speed up file performance most reports have on/off switches in the event greater file performance is needed, you can leave the report off and only turn it on when using it.
2) Report Type
We offer a Standard Income Statement and then we offer a "ZAP - Income Statement +". This extended report generates Net Income values just like the standard report but it shows more information which helps with cash flow visualization.
3) ZID
ZID is a generic word for project, property, client or some other sub categorization system you may have applied to transactions. This allows for filtering on a subset of Income Statement data.
4) Manual Sort on Accounts
We offer a manual sorting system for Accounts in the Chart of Accounts and that can be seen here where we go from Expenses to COGs and back to Expenses that are for temporary allocations only and should always be zero on final reports.
5) Multiple Net Income Summary Tables
The spreadsheet format allows users to create all kinds of sub-reports right on the formal report template. If you have COGs great, if not you can make that sub-report disappear easily.
6) Cash Delta Report
The Cash Delta Sub report comes in handy. Often times when looking at an Income Statement things won't make sense to a small business owner and that is because they may have taken out or put in a lot of their own money and being able to see that at the same time one is reviewing net Income really helps out cognitively.
Meet the ZAP Income Statement +
This is just an extension of the Income Statement Report.
It shows all transactions for all account types found in the General Ledger for the report dates.
1) Asset and Liability Information
The Asset and Liability Information isn't typically very useful, but its there as part of the report
2) Equity
The Equity inflows and outflows are useful. They color in cash flow pieces sometimes when the Income Statement seems to diverge from expected Asset or Liability Account Balances.
3) ZAP Special
We don't have a system for "suspended " accounts. We have an additional account type which should only be used for setting account balances and some transfers which are inner company transfers at times when both accounts are not being tracked with their own journals (typically only found when setting up an existing company in a new file and cutting a corner).
The Drill Down Reporting...
Modern Spreadsheets allow for links that can move the user around the file. Unfortunately, these links can only get a user from point to point. It's not easy to attach a variable to the link and then have the user transferred to another location AND update a value in a cell at the same time. Hopefully some day that will be easy. For now it's not, thus some work arounds had to be employed for "drill down" reporting.
Imagine you wanted to "drill down" into the $128 commission and fees item.
In a typical website you would click on the category or amount and be shown a sub-report via one method or another.
In this template, you click on the column expander (2) to reveal a sub reporting system right next to your report.
When expanded, you will discover a sub-report with (1) an On/Off Button, (2) a Select / Drop Down Box with all possible Accounts/Categories listed and (3) a list of matching transactions for the Category selected. It would be nice if you could click on the item in the list and have the drop down auto change. That is doable but it requires a bit of custom scripting that requires some additional cell naming and identification, that we've decided to omit to keep things simple. So, select the Account from the drop down and your report will be created on the fly in real time with the Income Statement still in view! If you click the view link you will be taken to the Journal and the row in that Journal for the transaction for editing.
The General Ledger Data Subset...
Spreadsheets have some unique limitations on the way data can be queried. They have these fancy systems called "arrayformulas" which can be used to return queried data in a way that the spreadsheet equations do not have to be in all the cells, BUT those are limited to the number of parameters they can use for a query. Thus, for complex queries, often times a "view" or "subset" of General Ledger or Journal data must be created first, after which another query from an "array formula" can be run to create the report.
This Income Statement is affected by these limitations, but in an educational way and for purposes of troubleshooting, that may in fact be a good thing. The expender noted by (3) reveals the subset of data used to create this report.
