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Did You Know?

A product’s Profit and Loss is also called a “Profitability Statement” or a “Profitability Summary.” A template created for a P&L chart will include the same categories as a more detailed P&L statement.

A P&L statement typically has different categories of sales and expenses:

  • Net sales
  • Cost of goods sold
  • Gross margin
  • Selling and administrative expenses/operating expenses
  • Net profit

The Profit and Loss template enables you to understand your finances more clearly.

If you’re a business owner or manager, a Profit and Loss statement template is a valuable tool for monitoring operations. It helps you evaluate your regular expenses, your return on investment from advertising and marketing, and other credits and debits.

If you have a monthly P&L statement, you can see whether or not your expenses are going up or going down. If they’re rising, do you still need the goods you’re purchasing? You may find yourself ordering certain supplies from companies on a weekly basis. Would it serve you better to buy these supplies in bulk on a monthly basis, instead? Where will your company get the best discount?

This profit and loss report template will give you a good view of your operational expenses and facilitate evaluation of the company’s ability to manage and use resources.

If you are in the US, prepare a Profit and Loss statement. It’s needed when you pay your business taxes. Other countries will still need the most important numbers from your statement, including net sales, profit and loss.

Profit and Loss Statement Forms

Before You Fill Out Your Profit and Loss Template, Some Questions to Consider:

  • How do you currently track profit? Are your profit measurement methods accurate?
  • How many goods or services did you sell during the time period you’re using?
  • Do you have records of expenses that don’t directly relate to your business, such as rent and utility bills?
  • Have you tracked and categorized your office expenses?
  • Do you know which expenses are selling-related and which ones aren’t?
  • Do you include items that have been damaged and/or stolen? If you’re an online merchant, what kinds of chargeback fees are you paying? These are all a part of doing business, so don’t leave them out.

Conversely, don’t let large expenses happen without careful planning. You never know when you’ll be visit the auto shop or the dentist.

What Kinds of Profit and Loss Statement Templates Are There?

Single Step income statements are simpler to prepare, but Multi Step statements offer more information, so you’ll need to decide which one to use based on your particular business. The best way to do this is by using a Single Step P&L Statement for beginners and small businesses.

Understanding Basic Terms On Your Profit and Loss Statement

Whether you’re filling out a monthly or quarterly statement, the first thing you’ll do is write your business name in the header. If you’re running huge marketing campaigns, look at this information on a weekly basis. The Profit and Loss information is a very important tool – you can use it to figure out what changes you should make, particularly during peak season.

When you are preparing for your first P&L statement, you may need to complete your first tax return. An accountant can help you gather the data you need. If you have out-of-pocket expenses, be sure to allocate them.

Profit and Loss Statement Samples

Profit and Loss 25

What Information Will Be Needed to Fill Out the Template? 

  • Net Sales: If you sell tangible items, this is usually a small percentage of your sales. If you have high amounts of chargebacks, this is something you’ll need to work to reduce.
  • Cost of Sales/Good Sold: If you sell products, this is the amount that you paid to acquire these products during this time period. It does not include selling, marketing or administrative overhead. (Those expenses will be dealt with later.) The price of the goods as they are sold to customers. In a service-based business, this section will usually have a “zero” value. If you have licensing or commissions then the value will be whatever your contract dictates.

Please do not ask me how to write a P&L statement. I am not a CPA and will not be able to assist you in this area of finance. It’s much easier to track inventory by counting what you have on hand at the beginning and end of each accounting period. After doing this, and adding in any expenses for reordering, you can easily calculate your net profit/loss.

Once this is done, it’s time to fill in selling, general and administrative overhead expenses for your business on the worksheet. This is the net operating expense, which includes day-to-day operating costs.


What Do “Other Income and Other Expenses” Mean?

If you have profits that are derived from unconventional sources, such as rents, royalties or investments, capital gains, or interest, include these in the Other Income section of the template. If you get a check from your stockbroker when you buy shares, that’s an income in the finance section. If an insurance company sends you money for damages, put it here in the profit-and-loss section.

A positive “Profit and Loses” column shows that you are making money every month. If the number is negative, it means your costs are exceeding your income.

Final Steps: Before You Calculate Your Profit and Loss

An inaccurate P&L statement can cause some horrible decisions to be made and can also be a complete waste of time for you. Make sure the data you put into the template is accurate and complete.

Assuming you have receipts, bills and other documents at hand, being able to access them is going to be a good source of information.

When doing your income and expense statements, be sure to distinguish between “cost of goods sold” and “office expenses.” Accuracy is crucial when it comes to business practices. Compare figures in your book with the paperwork you used to make them, and make any necessary adjustments to the figures.


TrainRocket.com helps you document every process and policy in your business so you can onboard, train, and scale faster.

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