How do I add a new income head and what are the actions related to it?

In financial accounting, income heads refer to the main categories or headings under which various types of income are classified. These income heads are used to organise and present the different sources of income that an individual or a business receives. Subheadings are then created under each income head to further categorise and classify the specific types of income within that category.

The purpose of using income heads and subheadings is to provide a systematic and structured approach to recording and reporting income. It allows for easier analysis and understanding of the various sources of income, as well as better financial management.

For example, let's consider an institute that has multiple sources of income. The income heads for this institute include:

• Sales Revenue: This income head represents the revenue generated from the sale of goods or services offered by the business. Subheadings under this category could include different product lines or service categories
• Rental Income: This income head includes any income received from renting out properties or assets owned by the business. Subheadings under this category might include residential rentals, commercial rentals, or equipment rentals
• Interest Income: This income head comprises any interest earned on investments or loans. Subheadings under this category could include interest earned from savings accounts, fixed deposits, or bonds
• Miscellaneous Income: This income head is a catch-all category for any other types of income that don't fit into the above heads. Subheadings under this category might include income from commissions, royalties, or one-time gains

By organising income into different heads and subheadings, individuals and institutes can track and monitor the performance of each income category separately. It also helps in preparing financial statements, such as income statements or profit and loss statements, where income from each head is reported separately, providing a comprehensive view of the overall financial performance.

To create a new income head on your instance, navigate to Finance > Income Manager > Income Heads > Add New Income Head > Enter Details > Save.