Income accounts: what should be included?

The same applies to costs and expenses, income accounts are classified within the income statement group. They represent the money received by the business in consideration for the delivery of goods or services. In the balance sheet, they are usually on the credit side.

On this basis, here is what you need to know about these accounts to keep your business accounts in order.

How to differentiate income accounts

The classification of revenue accounts can be made on the basis of many different criteria. Depending on the chosen ones, you will acquire a perspective on the state of the accounts and the financial health of the business.

Among the factors to be taken into account in classifying them accounts are (for more information, we explain what passive income is in this article).

1. Origin of the payment obligation.
2. Operating incomeThe money received as payment in exchange for the enjoyable results of the company's own activities.
3. Inonoperating incomein this case, the amounts recorded in the income account are received for reasons that are not directly related to the activity of the business.
4. Effectiveness of payment.
5. Actual incomeare amounts received by bank transfer, bank cheque or cash payment.
6. Presumptive income: en a common concept and refers to the presumed interest arising from money lent by a company to its members or shareholders.
7. Method of payment.
8. Money.
9. Species.
10. Nature of the income.
11. IOrdinary incomeare those perceived as profit, resulting from the activity of the business.
12. Revenue Extraordinarywhen these annotations, generally sporadic, appear in the income accounts indicates that dividends are being collected.
13. Source of income.
14. Income from domestic sourcesThe income from the provision of services, the exploitation of tangible or intangible goods or the alienation of tangible and intangible goods carried out within the borders of our country.
15. Non-domestic income: those which include credits obtained abroad are considered as such., export credits, export credits or any other type of credit obtained from abroad.

How to keep orderly business accounts

To carry a balance sheet In orderly business operations, it is important to record all income in the appropriate entry.

The analysis of the income accounts, when they are well ordered, properly documented and contain complete and quality information, allows us to know the real situation of the company. as regards:

• The amount of money available and the cash flow.
• Expected profits.
• The profitability of operations.
• The best and worst performing periods.

If the other profit and loss accounts are also kept up to date, and with the same diligence, decision making will minimise risk The economic circumstances of the business are known and it is possible to anticipate the situation in the coming months.

In order for income, expense and cost accounts to be more accurate, it is important to implement technological solutions that automate the collection of information and allow those responsible for business accounting to acquire a global vision. of what is happening in real time, reducing the probability of error to a minimum.