Profit And Loss Statement Template For Independent Contractor

Profit And Loss Statement Template For Independent Contractor – As an independent technology contractor, I used various accounting solutions to manage my company’s expenses and income. At first, I used software packages installed on a local computer (or network). Recently, I have preferred the convenience and availability of online solutions. But in the early stages of all my businesses, I often started the process with a simple Excel spreadsheet.

I have several goals in writing this article. One of them is to give you information about the company’s finances (also called profit and loss). The second goal is to use your financial statement information to evaluate whether this downloadable independent contractor income statement template is useful to you as an independent contractor (or self-employed).

Profit And Loss Statement Template For Independent Contractor

As a small business owner, there are a few advantages to using an Excel template that you should consider: convenience and cost effectiveness. As long as you have Excel skills, entering data into a spreadsheet is very easy. The rows and columns are displayed on the screen and all you have to do is scroll to where you want to enter the information. You don’t need to switch between multiple windows or understand what software-specific buttons do. If you already have a Microsoft Office package (or need it for business communication), using the Excel template does not incur additional costs.

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Now you must also know that Excel is not a perfect solution. There are some disadvantages to using Excel: few external options and no integration with the accounting system. A spreadsheet is a “flat” file as opposed to a “relational database”. The single file method means that table data can be exported using copy/paste or as a comment. Most accounting software has a database as the background of the data, which allows the data to be organized and queried in almost unlimited ways (although the software often limits the query options with included pre-programmed questions).

In addition, the use of a simple spreadsheet prevents the integration of this information into the accounting system (e.g. payroll taxes, self-employment taxes, estimated taxes and software for reporting income taxes). A spreadsheet summarizing gross and net income can be manually transferred to another accounting software (or assigned to your accountant), but it cannot be exported to another system without going through several steps to get there.

Before we dive into the details of this model, let’s make sure we’re on the same page and cover a few accounting basics.

To help you understand some accounting principles, let’s take a quick look at the two main accounting reports: the balance sheet and the income statement.

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Note: Most of the information in this section is a summary of the article on the United States. Securities and Exchange Commission. The article is a short read that I recommend for a deeper understanding of accounting reports.

The balance sheet “provides detailed information about a company’s assets, liabilities, and net worth” (U.S. Securities and Exchange Commission). The balance sheet represents a picture of the relationship between the company’s assets, liabilities and cash value at a given moment.

Note: “Net worth” can also be replaced by “equity”. It’s the same concept, but the name varies depending on whether the company has shareholders or owners.

Assets: “There would be money left over if the company sold all its assets and paid off all its debts.” (*1)

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An income statement (also called an income statement) is “a statement that shows how much money a company has generated over a period of time… [it] also shows the costs and expenses associated with making that money (U.S. Securities and Exchange Commission). The result of this statement is the company’s net profit or loss and can be expressed by the following formula:

The description of the items in the income statement is reasonable (revenue is money that flows into the company and expenses are money that leaves the company). However, if we look at the independent contractor income statement template, you’ll notice that the Income section also has other items calculated for our income (such as discounts and cost of goods sold). – We’ll come back to it later. in this article.

You now have a basic comparison between spreadsheet and accounting software packages and an understanding of basic accounting reports and terminology. Let’s take a look at the details of this worksheet to see if this downloadable independent contractor income statement template is right for you.

Note: I am not an accounting or tax professional. My experience is more than 20 years as a self-employed person and running my own company, a bachelor’s degree in business administration and the mentioned references. My experience is effective but not infallible, and the information in this article should not be considered professional accounting or tax advice. I encourage you to use the information you get from this article as a starting point for your research.

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The same spreadsheet in this template (called “Independent Contractor Income Statement”) contains the usual profit and loss sections (income and expenses) I mentioned above. See the screenshot to see the speaker display (the history of the Income and Expense sections has been hidden to give a clear overview).

This template uses a simple design layout. The categories are on the left and the data is entered in the main text. The columns divide the data by month and the current year is on the right. There are several “tooltips” (indicated by three triangles in the right corner of a cell) that provide information on how to fill certain cells (one tip is shown in the preview image).

How to use an independent contractor income statement template, including creating a spreadsheet, adding personal information, and understanding accounting.

This table has minimal settings. Take a look at the configuration image and you should see a “Start of State Year” field. Enter the start date for your financial statements – usually the same start date as your tax period. Unless there is a requirement in your state or country, I recommend using January as the start date. Although this means that the first year only takes part of the year, it is usually the beginning of the tax year and is easier than the tax season and the accounting season. A tooltip (highlighted in yellow) shows the date format to use – the spreadsheet automatically adjusts to month, day, year.

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Now let’s add some sample result data to use this table. I divided the data screenshots into income and expenses.

Look at the picture of the money and enter the information shown (just select the right cell and enter a number). Red items should be prefixed with a “-” sign to indicate that it is a negative number and should be removed. I have previously referred to these negative numbers as “book income”. A part (i.e. money) is usually an addition to the money part. However, there are deductions (expenses) that are directly related to the financing item (for example, returning goods for sale). These “returns” do not represent the price because they are not possible without the original “sale”. So it’s just a discount (or “discount”) from the “sales charge” – so the subheading “Less” follows the money item.

Note: Don’t forget to add a “-” before the number in the “Less than” sections. Otherwise, “Minimum” entries will be added to the money instead of subtracted.

Now be very careful when we go to the “Price of Goods Sold” section. Although these are the same as the “minus” items discussed above, this income model considers them “positive” items that are included on the “Total Cost of Goods Sold” line and then subtracted from “Gross Profit”. (Some spreadsheets have it as “less: cost of goods sold” and require that it be entered as a negative number, as in “Less: returns” discussed earlier.) So even if it’s a deduction, be sure and enter it. them to “positive” Numbers – the table removes them.

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The cost picture shows the numbers that must be entered at the bottom of the table. Enter all costs as positive numbers – the spreadsheet will enter them and subtract the total from the “gross profit”.

After entering the first quarter (January to March) data into the spreadsheet, let’s look at the numbers to see what they mean. From the “net profit” we see that we lost money in the first month (-5%; this is normal for a start-up company), but we are on the right track because we saw a big increase in the next two months won. our “net profit” (43% and 50%). What should we do? Well, the income statement can give you an idea

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