An income and expense report is the owner's own view of the month: what came in, by source, and what went out, by category, with the difference at the bottom. It is simpler than the accountant's profit and loss and it is meant to be, because the owner reads it to decide things this week and the accountant prepares the formal statement for the year. This page is for the small business owner building the income and expense report template they read every month: what it lays out, how it differs from the profit and loss, and how to read it. The business expense spreadsheet on this site produces the expense half by category.
The income half
Income by source, for the month and year to date: sales by product or service line, or by customer type, whichever the owner decides by. Refunds shown as a deduction. Other income, interest and the like, separately. Income is recorded when it is earned or when it is received according to the basis the business keeps its books on; the template should say which so the two halves match.
The expense half
Expenses by category, from the same list the tracking spreadsheet uses, for the month and year to date. Cost of goods first if the business sells goods, then the operating categories, then equipment and capital purchases shown separately because they are spread over years. Meals and entertainment on their own line. Team members' reimbursed spending included under its category, not under reimbursements. The spreadsheet on this site produces this half.
The result, and the two ways to read it
Income less expenses is the month's result. Read it against last month and against the plan for the month; a quiet month that was planned is not the same as a quiet month that was not. Read the fixed expenses total on its own, because it is what the business has to earn before anything, and read the discretionary lines, because they are what the owner can change.
How the income expense report differs from the profit and loss
The accountant's profit and loss follows accounting rules: prepayments spread, capital purchases depreciated, accruals for costs incurred but unbilled. The owner's report can be simpler as long as it is consistent and the differences are known: capital purchases shown but kept separate, prepayments noted, meals in full with the half-deductible rule left to the accountant. The owner's report is for decisions; the profit and loss is for the return and the bank.
Building the template
One page. Income by source at the top, expenses by category below, the result at the bottom, month and year to date side by side, last year's month beside them if you have it. Fill it from the tracking spreadsheet and the sales record on the same day each month. PerDiemDesk Pro, at $4 per month for the whole team, supplies the reimbursed lines by category; the free spreadsheet here supplies the expense half.
Questions people ask about income and expense report template
Is an income and expense report the same as a profit and loss?
Close but simpler. The owner's report is for monthly decisions and can leave the accounting adjustments to the accountant's profit and loss.
How should reimbursed employee spending appear on an income expense report?
Under the category of what was bought, in the month it was incurred. Reimbursement is how it was paid, not what it was.
What is the most useful line on the report?
The fixed expenses total, because it is the amount the business must earn before it makes anything.