As part of financial reports, ApnaComplex offers two reports in addition to others –

(a) Income & Expenditure Statement (also referred as Profit & Loss Statement)

(b) Receipts & Payments Statement (also referred as Cash Flow Statement)

It is possible that treasurers with no accounting background might find this quite confusing as most of us have this in-built notion that whatever we “receive” in our bank is our “income”.

However, it is important to note that in accrual based accounting, “Income” is NOT same as “Receipts” (and “Expenditure” is not same as “Payments”). Income is the earnings of the Society (usually the total value of invoices raised) and Receipts is the amount received by the society in its Bank/Cash accounts. Similarly, Expenditure is the value of Bills given by Vendors to the society and Payments is the amount paid by Society from its Bank/Cash accounts. In simple terms, Income & Expenditure statement helps you understand if the society is meeting its expenses from the invoices being raised. Receipts & Payments shall help understand the real cash position in Bank/cash of the society. When you combine these two with Balance Sheet report, you can get accurate financial health of the society.

To explain the differences easily – let’s use some examples.

Let us say, a Society is having 10 units (flats/villas/shops). Society has raised invoices towards Maintenance Charges on all 10 units of Rs. 1000/- each on 1st April with a due date of April 30th.

As soon as the invoices are raised (and assuming no one has paid anything), the “Income” of the society is Rs. 10,000/-. The “Receipts” of the society is Rs. 0/-.

Now, assume 4 members have made full payment – the “Income” of the society is Rs. 10,000/-. The “Receipts” of the society is Rs. 4,000/-.

Now, assume 5th member has made excess payment – instead of Rs. 1000/- he has paid total of Rs. 2,500/-  the “Income” of the society is Rs. 10,000/-. The “Receipts” of the society is Rs. 6,500/-.

Now, in May, let us say the invoices towards Maintenance Charges of Rs. 1,000/- each are raised again on all 10 flats, the “Income” of the society for both April and May together is Rs. 20,000/-. The “Receipts” of the society for both April and May together is Rs. 6,500/-;  the “Income” of the society for May only is Rs. 10,000/-. The “Receipts” of the society for May only is Rs. 0/-.

Now, assume a 6th member who did not pay in first month has paid full dues of Rs. 2,000/- for both months together, the “Income” of the society for both April and May together is Rs. 20,000/-. The “Receipts” of the society for both April and May together is Rs. 8,500/-;  the “Income” of the society for May only is Rs. 10,000/-. The “Receipts” of the society for May only is Rs. 2,000/-.

On Expenditure vs Payments, assume a security agency has given bill on April 20th for Rs. 5,000/- and Society paid that bill on May 10th – the “Expenditure” of the society for April is Rs. 5,000/- and “Payments” of the Society for April is Rs. 0/-;  the “Expenditure” of the society for May is Rs. 0/- and “Payments” of the Society for May is Rs. 5,000/-;  the “Expenditure” of the society for both April & May is Rs. 5,000/- and “Payments” of the Society for both April & May is Rs. 5,000/-

A consolidated example:  Let us say, a Society is having 10 units (flats/villas/shops). Society has raised invoices towards Maintenance Charges on all 10 units of Rs. 1000/- each on 1st April with a due date of April 30th. No one has paid during the month of April. Also, a security agency has given bill to the Society on April 20th for Rs. 5,000/- for their services and society has not paid it in April.

At the end of April – the society’s Income is Rs. 10,000/- and Expenditure is Rs. 5,000/- and Profit (Income-Expenditure) is Rs. 5,000/-!! The Bank Balance however is zero (as no one has paid and there are no transactions to/from Bank/Cash accounts).

Now let us say in May, all 10 members have paid the April invoices and the security agency bill also is paid (and no further invoices are raised on Members) – the society’s Income for both April and May together is Rs. 10,000/- and Expenditure is Rs. 5,000/- and Profit (Income-Expenditure) is Rs. 5,000/-. Receipts for both April and May together is Rs. 10,000/- and Payments is Rs. 5,000/- and the Bank Balance is Rs. 5,000/-.