What is income
Income is the financial return earned through various means, encompassing sales, wages, profits, and interest. It serves as the lifeblood for both businesses and individuals, playing a critical role in sustaining financial stability.
We divide it into income for businesses and income for individuals.
Income for businesses
Income for businesses is derived from the sale of goods and services, as well as profits from stocks or interest earned from bank deposits.
The calculation of income is intricately tied to invoicing, where the invoice date becomes the reference point. Notably, the date of income and the date of payment may not always align, leading to a need for income allocation.
Income for individuals
For individuals, income predominantly comprises wages, interest, and gains resulting in monetary deposits. Wages, for instance, are recognised upon receipt, with the actual payment occurring on a predetermined date. This individual-centric perspective emphasises the personal aspect of income and its role in financial well-being.